VENITISM: BUSINESS ETHICS

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Bangladeshi Garment Workers and the Perversion of?Ethics

by Mario Rizzo

For the last few days the newspapers have been filled with stories about how western garment manufacturers will now insist on greater safety for the workers who make their clothes in Bangladesh. They will pay for renovations and reconstructions of the physical plants. What is more, the government in Bangladesh will raise the minimum wage and make unionization easier.
So now Pope Francis and the relatively rich in the developed world (many of whom were among the 900,000 names on a petition to improve things that has been circulated) will be pleased and the demands of their social conscience will be satisfied.

This is another instance of the simplistic pseudo-morality of those who can only see what is right in front of them at the present moment. This attitude is closer to a sympathetic reflex than a reasoned moral judgment.

Consider the following. The cost of garment labor in Bangladesh will rise. When public attention moves elsewhere, western manufacturers will either hire fewer workers or reduce the rate at which they hire workers in Bangladesh. Some many even leave the country. (Remember Bangladesh also has bad infrastructure and political instability making it a marginal place to do business.)

Costs will rise not only because of the costs of improved working conditions but also because a rise in the minimum wage will prevent the compensating-downward adjustment of wages. And the increase of unionization will also raise costs and wages. What Bangladesh has going for it at this particular stage in its development is relatively low wages and globalization. We do not do the Bangladeshis a favor by insisting on even early twentieth-century labor standards in an incredibly backward economy.

The nineteenth-century economist Frederic Bastiat asked us to pay attention to the ?unseen? as well as the seen in economic life.? Where will Bangladeshis who do not get to work in the garment factories (or perhaps other factories if the new minimum wage and labor standards set in more widely) go? Where will they get an income? Will people in Western Europe and the United States send them compensatory payments?

Too often, as this case demonstrates, people moralize high standards of living and hence of worker safety. Worker safety is a normal good, that is, as income rises we can afford more of it. To say that people have a right to a certain level of worker safety and a ?living wage? is an example of the harm the notion of positive rights can do in poor countries ? especially when the standards are imported from developed countries.

I am not saying that the death of more than a thousand garment workers isn?t a horrible event. I am not saying that we should not have compassion for these people. What I am saying is that the whole of morality is not about feeling good. It is about doing good. And doing good is a complex affair. It requires attention to the unseen.
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Source: http://venitism.blogspot.com/2013/05/business-ethics.html

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