In a hearing before a House Subcommittee headed by Congressman Ron Paul on February 9, Democratic Congressman William Lacy Clay attacked an economist who testified on monetary policy because the economist had written, among other things, the following:
And as long as you have no realistic alternative to industrialization based on low wages, to oppose it means that you are willing to deny desperately poor people the best chance they have of progress for the sake of what amounts to an aesthetic standard--that is, the fact that you don't like the idea of workers being paid a pittance to supply rich Westerners with fashion items.
In short, my correspondents are not entitled to their self-righteousness. They have not thought the matter through. And when the hopes of hundreds of millions are at stake, thinking things through is not just good intellectual practice. It is a moral duty.
In other words, this economist, as do many economists who study the issue, defended the right of poor people who live in poor countries to work in so-called sweatshops and thought that people who don't think the issue through are not doing their moral duty.
It is never the workers in countries like Honduras who protest the existence of a new factory there built by a Nike or a General Motors. The people there benefit as consumers as well as workers, since there are more (and cheaper) consumer goods manufactured and sold in their country (as well as in other parts of the world). Capital investment of this sort is infinitely superior to the alternative -- foreign aid -- which always empowers the governmental recipients of the "aid," making things even worse for the private economies of "aid" recipients.
Who was the economist? Actually, I misstated things on purpose. The first quote is from "In Praise of Cheap Labor," a great article by Paul Krugman written in 1997. The second quote is from Thomas DiLorenzo. The person Clay attacked for writing the article was not Paul Krugman; it was DiLorenzo. The articles covered a lot of the same ground and reached the same conclusion.