Now is not the time to defend sweatshops

Abstract arguments about the benefits of outsourcing have no place in defending criminal negligence, here or overseas.

Yesterday Rana Plaza, a Bangladeshi clothing factory and shopping mall, collapsed, killing hundreds and injuring thousands. According to BBC News, "the factory owners had ignored warnings not to allow their workers into the building after cracks were noticed on Tuesday." As a result, the Bangladeshi High Court has summoned the owner of the building, as well as senior staff at the factories, to appear before the court next week. The factory owners themselves are reported to have gone into hiding.

The Telegraph's David Blair is unequivocal: we take the blame.

One of Rana Plaza’s factories – New Wave – supplied Primark, the bargain clothing chain with 161 branches in Britain, and Bonmarché, another budget retailer with its head office in Wakefield and 360 stores across the country. They may not have known it, but these two companies were buying products made by people working in a death trap.

But the rush to the counterintuitive take is quicker every day. In fact, write Alex Massie and Matt Yglesias, we shouldn't be so quick to jump to conclusions. Yglesias writes:

Bangladesh may or may not need tougher workplace safety rules, but it's entirely appropriate for Bangladesh to have different—and, indeed, lower—workplace safety standards than the United States.

The reason is that while having a safe job is good, money is also good… Bangladesh is a lot poorer than the United States, and there are very good reasons for Bangladeshi people to make different choices in this regard than Americans. That's true whether you're talking about an individual calculus or a collective calculus.

While Massie adds:

It would be better if more buildings in Bangladesh met existing, local, safety regulations. It may well be that western companies could and should do more to monitor the conditions in which their contractors work. Be that as it may, sweatshops in the developing world have, on balance, been a good thing. And it is not even close.

The question of the morality of sweatshops is an old one. So old, in fact, that many consider it settled, giving arguments like Paul Krugman's 1997 piece "In Praise of Cheap Labour" the final word.

And indeed, those arguments – and the bulk of Massie's piece is also comprised of defending sweatshops in general – are convincing. Workers in sweatshops frequently earn more than the agricultural labourers that they are recruited from, and usually enjoy better conditions to boot, so in a way, they aren't treated badly at all. And the labourers are paid from money overseas, rendering sweatshops a sort of decentralised international aid: you buy clothes from Primark, and Primark gives some money to a poor Bangladeshi labourer! It's almost like charity.

But not only is the value of sweatshops to developing nations not actually a settled argument, it bears very little relationship to the issue at hand here.

Rana Plaza's building standards were illegal under Bangladesh's own laws. This is not a case of hardy foreign workers taking jobs that westerners wouldn't; nor is it a case of the cost of living being lower overseas, enabling cheaper goods with less money spent on wages. It is a case of criminal exploitation of labour: criminal by our standards, and criminal by Bangladesh's

The argument in defence of sweatshops relies on the point that free and equal exchange is mutually beneficial. That's claimed on a national level, that Britain exchanging money for Bangladeshi labour makes Britain and Bangladesh better off, and on a personal one, that employers exchanging money for employee's labour makes them both better off. But the deal here was not free and equal: employees were not warned that the danger of their job had increased vastly after the first cracks were noticed four days ago. There was no choice, there was no mutually beneficial exchange. There was just exploitation, and death.

There is a time for the defence of sweatshops. That time is not now. Now is the time for asking why it is that our international companies can't even buy from suppliers which follow the meagre labour protections which are afforded to workers in the developing nations they operate in.

Primark, for its part, says that "the company is shocked and deeply saddened by this appalling incident at Savar, near Dhaka, and expresses its condolences to all of those involved." But sadness is not the point. When Primark, and Bonmarché, and all the other contractors who squeeze margins down to the last penny, start using suppliers who actually live up to the minimum standards already in place, then we can have the argument about whether those standards ought to be raised. That's the time Krugman's argument might be needed. But today, the wrongdoing is clear, and the last thing needed is a defence of it.

Bangladeshi volunteers and rescue workers assist in rescue operations 48 hours after an eight-storey building collapsed in Savar, on the outskirts of Dhaka. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Leader: Theresa May and the resurgence of the state

More than any of her recent predecessors, the Prime Minister seems willing to challenge the economic and political orthodoxies of the past 35 years.

Theresa May entered office in more tumultuous circumstances than any other prime minister since 1945. The UK’s vote to leave the European Union was a remarkable rebuke to the political and business establishment and an outcome for which few had prepared. Mrs May recognised that the result was more than a revolt against Brussels. It reflected a deeper alienation and discontent. Britain’s inequalities of wealth and opportunity, its regional imbalances and its distrusted political class all contributed to the Remain campaign’s ­defeat. As she said in her speech in Birmingham on 11 July: “Make no mistake, the referendum was a vote to leave the European Union, but it was also a vote for serious change.”

When the financial crisis struck in 2007-2008, David Cameron, then leader of the opposition, was caught out. His optimistic, liberal Conservative vision, predicated on permanent economic growth, was ill-suited to recession and his embrace of austerity tainted his “modernising” project. From that moment, the purpose of his premiership was never clear. At times, austerity was presented as an act of pragmatic bookkeeping; at others, as a quest to shrink the state permanently.

By contrast, although Mrs May cautiously supported Remain, the Leave vote reinforced, rather than contradicted, her world-view. As long ago as March 2013, in the speech that signalled her leadership ambitions, she spoke of the need to confront “vested interests in the private sector” and embrace “a more strategic role” for the state. Mrs May has long insisted on the need to limit free movement of people within the ­European Union, and anticipated the causes of the Leave vote. The referendum result made the national reckoning that she had desired inevitable.

More than any of her recent predecessors, the Prime Minister seems willing to challenge the economic and political orthodoxies of the past 35 years. She has promised worker representation on company boards, binding shareholder votes on executive pay, improved corporate governance and stricter controls on foreign takeovers.

The shadow chancellor, John McDonnell, has set the ­Labour Party on a similar course, stating in his conference speech that the “winds of globalisation” are “blowing against the belief in the free market and in favour of intervention”. He pointedly criticised governments which did not try to save their domestic steel industries as China dumped cheap steel on to global markets.

We welcome this new mood in politics. As John Gray wrote in our “New Times” special issue last week, by reasserting the role of the state as the final guarantor of social ­cohesion, Mrs May “has broken with the neoliberal model that has ruled British politics since the 1980s”.

The Prime Minister has avoided the hyperactive style of many new leaders, but she has deviated from David Cameron’s agenda in several crucial respects. The target of a national Budget surplus by 2020 was rightly jettisoned (although Mrs May has emphasised her commitment to “living within our means”). Chancellor Philip Hammond’s Autumn Statement on 23 November will be the first test of the government’s ­fiscal boldness. Historically low borrowing costs have strengthened the pre-existing case for infrastructure investment to support growth and spread prosperity.

The greatest political ­challenge facing Mrs May is to manage the divisions within her party. She and her government must maintain adequate access to the European single market, while also gaining meaningful control of immigration. Her statist economic leanings are already being resisted by the free-market fundamentalists on her benches. Like all prime ministers, Mrs May must balance the desire for clarity with the need for unity.

“Brexit means Brexit,” she has repeatedly stated, underlining her commitment to end the UK’s 43-year European
affair. If Mrs May is to be a successful and even transformative prime minister, she must also prove that “serious change” means serious change and a determination to create a society that does not only benefit the fortunate few. 

This article first appeared in the 29 September 2016 issue of the New Statesman, May’s new Tories