White Stone Journal

MATTHEW YGLESIAS writes that he hasn't gotten too exercised about the New York Times' article on the plight of the Chinese workers who make Apple products because he's seen what it's like to work on a Chinese farm. Fair enough. Mike Daisey, the tech enthusiast/performance artist whose piece "The Agony and the Ecstasy of Steve Jobs" has partly touched off the current anti-Apple/anti-Foxconn backlash, talks about standing outside the gates at a Foxconn plant talking to workers who slave terrible hours under mind-destroying conditions, doing things that cripple their bodies. My reaction was to recall the time I spent standing outside the gates talking to workers at the world's biggest laser-printer factory, Canon's plant in Hanoi, back when I lived there; and while they had their complaints, they almost uniformly considered themselves lucky to be among those who had gotten out of their villages and passed the entrance exams to win a coveted regular-salaried factory job. On the other hand, that very eagerness meant that many village applicants were preyed upon by "employment placement firms" who made them empty promises of a guaranteed factory job in exchange for upfront payments (ie, bribes) equivalent to many months' salary, which would leave their families desperately in debt when they didn't actually get a spot. Tran Phuong Thao made a pretty great film on this a few years back, "Dreaming of Becoming a Worker", but unfortunately it doesn't seem to be available online.

Anyway, that's one angle: sweatshops are awful, but working a tiny rice farm is clearly worse, judging by the workers' own preferences. However, the stance one takes on this depends on the question one is asking. An article on hardships in the garment industry in New York in 1909 might have elicited the response that things couldn't be too bad since people were still immigrating from eastern Europe by the millions to take these jobs. Clearly they were better off working in a sweatshop in Manhattan than leading a miserable existence of poverty and repression in a shtetl in Poland. But at the same time, these workers were angry enough at the conditions they were subjected to that they staged the massive shirtwaist strike that year. Needless to say, that kind of politically free labour organisation is much harder to conduct in China because the state bans the formation of independent unions not controlled by the Communist Party. There's a sequence in Mr Daisey's piece where he describes seeing Foxconn's perfectly open blacklist of employees who are to be immediately fired and not accepted at other factories because they are "troublemakers"; Mr Daisey notes that in a fascist dictatorship, you don't have to resort to euphemisms the way management does in democracies. And that, too, rings true from my talks with underground Vietnamese labour activists. It's hard to say how big the discount is on the manufacturing price of an iPhone due to the Chinese state's ability to repress the formation of labour unions, but it's not zero.

So I think the issue here is really what question we're asking. If we're saying people should launch a campaign to force Apple to put more pressure on Foxconn to improve working conditions and obey their own nominal corporate codes of conduct, including an unprecedented transparency campaign where obnoxious busybodies from civil-society groups can drop in at factories unannounced all the time and bring production to a halt if violations are uncovered—I honestly don't see how this can hurt. Forcing the Chinese state to allow independent labour unions would be great too, but this may be impossible because for a Communist dictatorship that's a direct mortal threat to the ascendancy and legitimacy of the state. You could make an intellectual case for a Pigovian tariff on Chinese goods that tries to compensate for the absence of political rights, but beyond trying to calculate how much labour repression cuts the price of a Chinese transistor as compared to a Thai one (which might not be much), I'm not sure how one would (to put it bombastically) put a price on freedom.

But here's one part of the New York Times' series on Apple that I found incredibly interesting, though it doesn't seem to have gotten much press. In the first article of the two-part series, they repeatedly talk about the point at which Apple began shifting its focus away from its famous automated plant in California, where iMacs were assembled by zillions of whirring robotic arms, to Foxconn's factories in China. At Foxconn, iPhones and iPads are assembled largely by hand, with assembly lines of thousands or tens of thousands of workers giving themselves crazy repetitive motion stress disorders. The transition of manufacturing from America to China is generally viewed as an inexorable one, due to the low cost of Chinese labour and the virtuous circle of development of the Chinese electronic-manufacturing complex. But in this case, we seem to be seeing a reversal of the other, far more dominant inexorable trend: that of the industrial revolution towards ever-increasing automation. John Henry appears to be beating the steam drill. This is pretty weird, and it's hard to believe it isn't a temporary deviation from the norm. At some point iPhones are going to be assembled by robots, not people trying to imitate robots. But with east Asia by now utterly dominating the global network of electronics manufacturing, it may be that the shift to robotic iPhone factories will happen in China (as it already is), not in America. Does this matter for American workers? For America's trade balance? Is there anything to be done about it, even if it does?

(Photo credit: AFP)

AN UPDATE to the previous post about the rift between Susan G Komen for the Cure and Planned Parenthood: Komen has announced that it will continue to work with Planned Parenthood. The reversal follows several developments, including, crucially, Jeffrey Goldberg's reporting at the Atlantic that the policy that Komen had initially cited in cutting off the funding—the policy of not giving any funds to organisations that are under investigation—was actually a new policy created in order to cover its desire to cut off the funds in question.

The debate over this will continue; unsurprisingly, both Komen and Planned Parenthood have raised a lot of money from their respective supporters over the last few days, and the whole fracas has pushed the abortion debate back into the political spotlight, where it will remain, despite the reversal. Komen's reversal may be bad tactics—as various wags have pointed out, the organisation has now irritated pro-life people in addition to pro-choice people—but on the substance, it was a solid call. Planned Parenthood is fundamentally a women's-health organisation, not a political combatant, despite what you hear from some segments of the right; and Komen is a charity with an interest in women's health.

One aspect of this that I think is worth flagging is that it is the second time in two weeks that vocally upset people have had a demonstrable effect on an issue. The first, of course, was over the Stop Online Piracy Act and the Protect IP Act. After a semi-centralised backlash around the internet—the Wikipedia blackout, the statements from big industry players like Google, and the clamour on Twitter, Facebook, and other social media—both bills have been postponed indefinitely. You can also, arguably, see this phenomenon at work in, for example, the end of ethanol subsidies. This suggests that public opinion can actually make a difference in politics, at least when the most compelling arguments are on its side. That's a cheering prospect for a small-d democrat, particularly in the age of SuperPACs and so on.

IMAGINE you head a municipal utility company. Your coal-fired power plant is aging. Your plant is among the 47% of American plants that have not yet installed the scrubbers needed to bring it into compliance with new EPA regulations. You therefore face a choice. Do you a) install the scrubbers, b) build a new coal-fired power plant, c) build a natural-gas-fired power plant or d) invest in solar or wind power? All four options are expensive, and none is perfect, but the latter two, in most circumstances, are clearly the better options.

A week ago I wrote an article arguing that we are in or nearing the end of the American coal era. The country's coal-fired power plants are aging; natural gas abounds; the installation costs of renewables are falling; and environmental regulations are growing stricter and being properly enforced. Coal may well continue to provide more energy than any other single source for some decades to come, but it will probably never again generate the majority of America's energy, as it did for much of the 19th and all of the 20th centuries. Still, coal will not vanish overnight. Neither will mountaintop-removal mining, which now accounts for much of the coal Appalachia produces. But, as this video shows, some ingenious Kentuckians are figuring out how to restore removed mountaintops.

ROSS DOUTHAT, making a communitarian argument that government expansion comes at the expense of voluntaristic association, writes:

Every tax dollar the government takes is a dollar that can’t go to charities and churches.

A good rule of blogging discourse is that you should respond to the main thrust of a post, rather than tangential nitpicky issues. But I'm going to break that rule for reasons I'll explain later, and point out that this claim here is just transparently not true.

Let's say I'm a reasonably generous person, and I give 5% of my disposable income to charity. Say I have $10,000 in disposable income, so I give $500 a year to charity. Now the government raises my taxes by one dollar, so I have $9,999 in disposable income. How much will I give to charity? I would have to be extremely weird or vindictive, or have a strange emotional relationship to the recipients of my benevolence, to take the entirety of that $1 out of my charitable giving. In all likelihood I'll continue to give 5% of my disposable income to charity, meaning I'll give $499.95 to charity. So for someone who gives 5% of disposable income, every dollar the government takes is perhaps 5 cents that won't go to charity.

This is pretty obvious when you consider that every dollar the government takes is a dollar that "can't" go to charities and churches only in the same sense that it can't go to buying an iPhone or shoes for your daughter. But if you had the dollar, you couldn't have given it to charity and used it to buy an iPhone and shoes for your daughter. The dollar is doing too much work here. The proper way to express this is that every dollar the government takes from someone in taxes will reduce their giving to charities and churches by a fraction proportional to that person's propensity for charitable giving.

Now, Mr Douthat is arguing that the type of collective social action we engage in through the vehicle of government often drives out other kinds of collective action. But this is a pretty weak way to make that argument. Government spending is 100% collective social action, so when the government takes that dollar you get a dollar's worth of collective social action. Private spending ends up being devoted to collective social action at a much lower rate, probably in the single digits. So if you're trying to get collective social action, you'll get vastly more bang for your buck through taxes.

In any case, charitable giving is tax-deductible. So when the government increases the tax rate, it actually makes charitable giving more attractive relative to spending or investment. If I'm a hedge-fund executive and my tax rate is 15%, then if I decide to spend a dollar rather than give it to charity I'll only get 85 cents' worth of stuff. If the government eliminates the carried interest rule and starts charging me a marginal rate of 35%, then if I decide to spend that dollar rather than give it to charity I'll only get 65 cents' worth of stuff. This will further mitigate the effect of my reduced disposable income on my charitable giving.

You can take this one step further if you like: what is the tax money being spent on? Does it increase the salary of a government worker by $1? What if that government worker also has a 5% propensity to give her disposable income to charity? In that case the charity gets their 5 cents right back again and there is no loss at all. What if the dollar goes to reducing the federal deficit? In that case, if you believe in Ricardian equivalence, it will make no difference at all: consumers have already factored in expectations of future taxes to pay off government debt, so their spending decisions will not change. If on the other hand you don't believe in Ricardian equivalence then what happens when an extra dollar is taxed depends on many other conditions in the economy. Lots of things could happen.

None of this addresses the issue of voluntarism: people have control over who they give charity to, and the kind of collective social action in which you exercise that kind of choice is important and different from the government kind. Then again, the government kind is important too: it's important to have to contribute to collective social action even when you don't like everyone who's involved and don't have the final say over what gets done.

But that's not really why I'm writing this post on what may at first seem like an annoying and nitpicky issue. The reason I'm writing this post is that the formulation "every dollar of taxes is a dollar that can't be spent on (my particular area of concern)" is a pervasive rhetorical figure that is simply not true. It's a bad intellectual habit that confuses people into thinking that taxes have something to do with issues they actually have nothing to do with. We should make our arguments about what government should or shouldn't do without confusing things this way.

IN THE latest edition of the New Republic, Robert Kagan, a senior fellow at Brookings and noted Kagan, serves up a ponderous rebuttal to the proposition that America is in decline. I don't disagree with Mr Kagan that America remains, for the foreseeable future, securely hegemonic, which is the thesis he is most anxious to establish. But I am sceptical of Mr Kagan's assumptions about why American unipolarity must be so jealously protected, which he announces at the outset of his essay:

The present world order—characterized by an unprecedented number of democratic nations; a greater global prosperity, even with the current crisis, than the world has ever known; and a long peace among great powers—reflects American principles and preferences, and was built and preserved by American power in all its political, economic, and military dimensions. If American power declines, this world order will decline with it. It will be replaced by some other kind of order, reflecting the desires and the qualities of other world powers. Or perhaps it will simply collapse, as the European world order collapsed in the first half of the twentieth century. The belief, held by many, that even with diminished American power “the underlying foundations of the liberal international order will survive and thrive,” as the political scientist G. John Ikenberry has argued, is a pleasant illusion.

There is much to quibble with here. It may be that the current global dispensation to some extent "reflects American principles and preferences". If it does, however, it's not because it "was built and preserved by American power", except in a rather trivial sense. The American model of political economy has proved in many ways to be the world's most successful. As the 20th century's main rivals to capitalist liberal democracy failed, polities worldwide looked to the example of Western Europe and North America, and this led to a glad flowering of democracy and prosperity. But America didn't cause the world's numerous socialist and/or authoritarian experiments to fail. Those regimes faltered first and foremost because socialism and authoritarianism tend not to work out in the long run. And America didn't compel aspiring first-worlders to try market economies and democratic governance. The nations of the world could see for themselves what was working and, in their own ways, have mostly followed suit.

If American power does wither, it will be due to America's failure to maintain really first-rate institutions. The ensuing world order would indeed become, as Mr Kagan has it, one "reflecting the desires and the qualities of other world powers". But that's simply because the capitals of the world aren't full of blithering dopes who wouldn't know what to do if Brookings senior fellows didn't tell them. Smart countries will want to emulate those that remain or have become first-rate. And, as far as I can tell, people who become accustomed to wealth and freedom don't have to be bullied and cajoled into wanting to keep it. Because they have grown rich, they'll have the means to keep it. Which is why it's absurd to think that if America loses its lustre, the peoples of the world will inevitably suffer under the dark reign of Russian or Chinese bad guys. Other wealthy, liberal democracies can have huge navies, too, if we'd let them. Mr Ikenberry's alleged "pleasant illusion" looks pleasantly solid to me. 

Mr Kagan gives it his all arguing that the "rise of the rest" does not mean America's not still undisputed king of the hill. But Rosa Brooks, a Georgetown law professor, is right that the skyward trajectory of the BRICs does mean America's relative influence has waned, and that that's a happy development:

[A]s Reagan recognized, a decline in relative American power is a good thing, not a bad thing — if we can turn rising states into solid allies. Remember "Gulliver's Travels"? True, it wasn't much fun for Gulliver to be the little guy in the land of Brobdingnagian giants, but it was even less fun to be a giant among the Lilliputians. Like Gulliver, America will prosper most if we can surround ourselves with friendly peer and near-peer states. They give us larger markets and improve burden-sharing; none of the global problems that bedevil us can be solved by the United States alone.

The global public goods Mr Kagan rightly prizes—peace, stability, unimpeded trade routes—will be more, not less secure if the burden of their provision is more broadly distributed. And America is more likely to remain worth emulating were it to redirect some significant portion of the trillions spent maintaining its hegemony into more productive uses. 

(Photo credit: AFP)