David R. Henderson  

Representative Clay Attacks "Sweatshop" Defender

The Great Pacification... Housing Finance Reform...

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.

The economist also wrote, in an article titled "How 'Sweatshops' Help the Poor," the following:

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.

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COMMENTS (9 to date)
Larry Willmore writes:

The title of Krugman's article is "In Praise of Cheap Labor", not "In Praise of Great Labor". I agree that it is a great article. I don't understand, though, why this subject came up in a hearing on monetary policy.

Alex writes:

Clay also attacked DiLorenzo for his ill researched revisionist history and membership in dubious Neo-Confederate groups. Regardless of the merit of DiLorenzo's speech, which made several good points (I'm not an Austrian), he should not have been invited. Politics is a stupid game and appearances matter a great deal, there are several people more qualified to speak on this matter than DiLorenzo and I think it hurt our cause that he was there.

Daniel Kuehn writes:

I think it's misleading to frame Clay's criticism in terms of the sweatshop paper. His criticism was not dependent on that, nor was it a feature of the critique.

This was a very disappointing hearing.

Daniel Kuehn writes:

"Disappointing" isn't strong enough. It was a political charade. I find it incredible that people actually think Ron Paul transcends politics.

fundamentalist writes:

Daniel, why would you think a politician could transcend politics? Can a reptile transcend being cold blooded?

David R. Henderson writes:

@Larry Willmore,
Thanks. Correction made.
@Daniel Kuehn,
Actually, Clay's attack on DiLorenzo did highlight his sweatshop article, among others.

Bob Murphy writes:

Good catch David. And I've found on my blog that when Daniel Kuehn says, of someone you criticize, "That's not what he was saying," what DK really means is, "I could have reached the same conclusion as that guy with an entirely different argument that was immune to your criticism, and hence you are being unfair."

(Loves and kisses Daniel... :))

Daniel Kuehn writes:

fundamentalist -
I don't expect politicians to transcend politics. A lot of people act like Ron Paul does.

David -
We are refering to his first five minutes, right? I didn't get to listen through the whole round of second five minutes. He mentioned the sweatshop article once and it did not form the bulk of his criticism, that's all I'm saying. Lot's of laymen get upset with economists' non-chalance towards low cost labor. They are reading DiLorenzo wrong on this, of course - but it simply wasn't the main point of his critique, that's all I'm saying. Clay spent even more time talking about methodological issues - I'd like to see a DiLorenzo fan challenge Clay on those points!

Kathryn writes:

DK said:

Clay spent even more time talking about methodological issues - I'd like to see a DiLorenzo fan challenge Clay on those points!

Bob Wenzel did address the methodological issue here: http://www.economicpolicyjournal.com/2011/02/congressman-takes-cheap-shots-at-thomas.html

There's really just so much so wrong about what Clay said, that it seems legitimate for different commenters to take on different points.

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