Leaving Poverty in China

Michael strong has a great article in TCS Daily about Chinese citizens pulling themselves out of poverty:

Between 1990 and 2002 more than 174 million people escaped poverty in China,
about 1.2 million per month.

In part he credits America's newest great Satan, Wal-mart:

With an estimated $23 billion in Chinese exports in 2005 (out of a total of $713
billion in manufacturing exports),[2] Wal-Mart might well be single-handedly responsible for
bringing about 38,000 people out of poverty in China each month, about 460,000
per year.

There are estimates that 70 percent of Wal-Mart's products are made in
China.[3] One writer vividly
suggests that "One way to think of Wal-Mart is as a vast pipeline that gives
non-U.S. companies direct access to the American market." [4] Even without considering the $263 billion in
consumer savings that Wal-Mart provides for low-income Americans, or the
millions lifted out of poverty by Wal-Mart in other developing nations, it is
unlikely that there is any single organization on the planet that alleviates
poverty so effectively for so many people.[5] Moreover, insofar as China's rapid manufacturing growth
has been associated with a decline in its status as a global arms dealer,
Wal-Mart has also done more than its share in contributing to global peace.[6]

It is almost certain that abusive practices exist in some of Wal-mart's Chinese suppliers -- in particular, slavery and compelled work must end and be opposed by all of us.  But wages that are "too low" is not one of these abuses.  In fact, wages at these suppliers, that comfortable middle class Americans decry as too low from the safety of their Pottery Barn couch, are actually a victory for Chinese workers.  Strong provides the context that is always missing from attacks on Chinese wages:

If we care about alleviating global poverty we need to take this fact
seriously. Without Wal-Mart, about half a million of these people each year
would be stuck in rural poverty that is, for most of them, far worse than
sweatshop labor.

And he provides some context as well for the futility of charitable aid:

Other than economic growth, there is no way to double the salaries of a 100
million people (and growing). After the 2004 Asian Tsunami, more than one-third
of Americans gave more than $400 million in charitable aid, an extraordinary
outburst of giving by any standard. And yet there are more than 630 million
rural Chinese remaining, many of whom are living on less than a dollar per day.
While each would welcome a charitable dollar if we could get it to them, that
charitable dollar, representing one good day's worth of income, would not do
them nearly as much good as would a job in the city paying twice as much day in,
day out. Charity cannot take place on an adequate scale to solve global

I made similar points in my post several years ago on why progressives hate capitalism:

Progressives do not like American factories appearing in third world
countries, paying locals wages progressives feel are too low, and
disrupting agrarian economies with which progressives were more
comfortable.  But these changes are all the sum of actions by
individuals, so it is illustrative to think about what is going on in
these countries at the individual level. 

One morning, a rice farmer in southeast Asia might faces a choice.
He can continue a life of brutal, back-breaking labor from dawn to dusk
for what is essentially subsistence earnings.  He can continue to see a
large number of his children die young from malnutrition and disease.
He can continue a lifestyle so static, so devoid of opportunity for
advancement, that it is nearly identical to the life led by his
ancestors in the same spot a thousand years ago.

Or, he can go to the local Nike factory, work long hours (but
certainly no longer than he worked in the field) for low pay (but
certainly more than he was making subsistence farming) and take a shot
at changing his life.  And you know what, many men (and women) in his
position choose the Nike factory.  And progressives hate this.  They
distrust this choice.  They distrust the change.  And, at its heart,
that is what the opposition to globalization is all about - a deep seated conservatism
that distrusts the decision-making of individuals and fears change,
change that ironically might finally pull people out of untold
generations of utter poverty.


  1. JoshK:

    The real joke is that people who are so anti-progress call themselves "progressives".

  2. RJ:

    Your liberal standpoint to such a passionately debated subject is very convincing. I believe that the general population must first realize that, despite the amount of advocacy groups that denounce these factories as a social injustice, sweatshop laborers like those in China are not only willing to be employed by, but furthermore favor the existence of American factories offering low wage labor. This is obvious from the fact that laborers choose to relocate themselves in areas where work in factories is available. Yet still, sweatshops are so easily condemned, because Americans do not comprehend the lifestyles or reasons as to why laborers would demand such work. I understand this to be the fundamental issue for Americans: they simply lose grasp of the world’s economic status relative to their own. They are indeed fooled by the perception that other nations also share the same social welfare and living standards of the U.S. As a result, they fail to remember that rural villages that experience trouble with running water and other forms of limited technology still exist. In places like these, an hourly wage of two dollars is actually substantial for foreign laborers who would not earn such an amount by any other means. It is then no surprise to see that the demand for employment in sweatshop factories has actually increased. We must simply quit focusing on American corporations’ concentration on increased production and large profits, and instead focus on the positive long run effects that sweatshops are responsible for. By not doing so, that which Americans perceive as a global threat is actually presenting a positive sign for economic growth in developing countries, as well as proving an answer to ending world poverty.