Because Grinding The Faces Of The Poor Is FUN

In a discussion of how much our jeans would cost if South Asian textile workers could afford to wear them, an economically literate friend informed me that manufacturing is these days so automated that the Bengalis could easily be paid ten times as much without having much of an impact on the Western store price. The implication is that the sweatshop continues to underpay them for the same reason as a dog licks its balls, namely because it can; specifically, because the country is overpopulated. When, however, he tells me of how uninterested such garment firms are in radical innovation and climbing the value-added ladder to produce the nanotech smart clothes of science fiction, I wonder whether there is something else going on as well.

Indeed, I wonder whether there is something important that generations of academic economists have missed, namely a conflict between purely rational considerations of business management and purely emotional considerations of animal utility. Abraham Maslow reckoned that a company got the best out of its workers when it looked after them well, even becoming a second family to them. His name may now be largely forgotten, but Apple and Google and many others seem to thrive on the insight that more flies are caught (and retained) with honey than with vinegar. On the other hand, other companies seem to think that the production line shown in Modern Times is not a satire but an ideal – viz. the call-centres where no one is allowed to go to the lavatory.

I have a suspicion that the screw-the-workers approach proliferates, not because it is actually more profitable, au contraire, but because it provides such a rush of immediate emotional satisfaction to animal or even reptile brains. It fulfils needs in these brains that really have nothing whatever to do with the economics of the firm as such.

The brains of whom? All experience tells us that the worst slave-drivers are not necessarily the people at the very top, but rather bottom management, people with a social need to mark their rise from among their fellows and an economic need to curry favour. Thus it was in the galleys, thus it was in the death-camps, and thus it will always be. Perhaps the move to greater value-added in the South Asian factories is being blocked by lack of capital, by political meddling, by patent trolls, by multinational skulduggery; or perhaps it is not happening because too many people have such an emotional stake in tormenting their inferiors that the last thing they want to see is a middle-class workforce.

It should be possible to test this empirically; there must be crossroads at which firms must decide whether or not to crush workers’ wages at the price of long-term business failure. It all depends whether the thinking of managers is fundamentally zero-sum or not.

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