Synopsis: The economics correspondent for the Financial Times writes a pop economics textbook illustrating economic principles in accessible and engaging examples.
My Take: Should be required reading for all high-school students. Clearly articulated, widely accessible and practically illustrated explanations of the fundamentals of economics.
Highlight: A great chapter highlighting the benefits of sweatshops as a transitional industry in countries like South Korea and India. They might be unappealing to Western minds, but in the short-term sweatshops are often the best of a bad set of choices in developing countries and in the long run a path out of poverty for those lucky enough to work in them:
Hours are long. Wages are pitiful. But sweatshops are the symptom, not the cause, of shocking global poverty. Workers go there voluntarily, which means—hard as it is to believe—that whatever their alternatives are, they are worse. They stay there, too; turnover rates of multinational-owned factories are low, because conditions and pay, while bad, are better than those in factories run by local firms. And even a local company is likely to pay better than trying to earn money without a job: running an illegal street stall, working as a prostitute, or combing reeking landfills in cities like Manila to find recyclable goods.
… [NYC’s resolution banning sweatshop-made products] can only harm sweatshop laborers: they’ll be out of a job and—literally, for those in Manila—back on the trash heap. Of course, it will be good news for textile workers in rich countries, who’ll get the business instead….
We need to understand that narrowly focused initiatives on “fair trade coffee” or “sweatshop-free clothes” will never make a substantial improvement to the lives of millions. Some, like the campaign to prevent New York City from buying uniforms from poor countries, will actively cause damage. Others, like the numerous brands of fair trade coffee, are likely to improve the income of a few coffee producers without causing a great deal of harm. But they cannot fix the basic problem: too much coffee is being produced. At the slightest hint that coffee farming will become an attractive profession, it will always be swamped with desperate people who have no alternative. The truth of the matter is that only broad-based development of poor countries will ever lift the living standards of the very poor, increase coffee prices, and improve wages and labor standards in shoe factories.