China Versus the United States: Economic and Fair Play
by Robert Coutinho
Recently, I tried to comment on an article concerning the capacity of the U. S. worker to compete with foreign counterparts. The comment was too long. When I mentioned this to Joe Gandelman he suggested I write a Guest Voice column.
I will post what I had been trying to say:
You are under the delusion that the playing field is even. We have environmental controls, workplace safety rules, limited work days and minimum wage requirements.
China doesn’t.
Way back when (specifically when we were colonies [note I say we because I live in Massachusetts, if you live in Indiana, you were Native Americans–sorry for all the blankets]) the British crown prohibited manufacturing here. My hometown (Middleboro) actually has an historical landmark, the Oliver Mill. It is really just a site, the mill was never remade. It is historic because Oliver was a judge so he got an exemption to the rule.
The reason I bring up this particular tidbit of history is because it happens to be the driving factor behind the founding of this country. Namely: we were being used in the mercantile war between the home country and all the others. France, Spain, Portugal and Netherlands were also very active participants.
When the Bank of England discovered that we were printing our own money, they went nuts! [Note: we actually printed up work declarations that entitled the bearer to goods and/or services. This led to more printing to allow a thriving economy] The Parliament declared all such script illegal–insisting that only money printed by the crown could be used.
We went into a depression.
So, to sum things up: we were only allowed to ship raw materials out. We were not allowed to make stuff–you know, like chairs, tables, guns, cannons, clothes, all the fun stuff.
In return, we did not have to pay taxes to the British crown. Then…Tea Party!!! Yeah! Oh, I mean they decided that they would also tax us. So now, we had the disadvantage of not being allowed to spin our own thread from the cotton WE were growing, to make guns from the iron WE were mining, to make tables from the wood WE were chopping; AND we were also going to be taxed–without the right to send a member to parliament at that!
Why all this? Because, China is using mercantilism against us. Japan was doing it for quite some time (and may still be doing so). We used to (and may still, as I said) ship redwood trees to Japan where they would turn them into finished products. Meanwhile, we were prohibited from shipping products to Japan that were made from redwood! Yes, you read that correctly. Yes it was in the 80’s and 90’s.
China imports lots of stuff…almost all of it raw materials. They do not import many finished goods. The ones that they do import are for the obscenely wealthy (by their standards).
Meanwhile, their workers work up to 35-hour days, in cramped factories, doing the same thing over and over again, living in dormitories owned and operated by the corporation they work for. If any worker even mentions starting up a group to get better conditions (you know, the dreaded, “Union” term) he will be placed in prison for 12 years.
Due to the material costs for many of the items China manufactures, we could make them here for a paltry 25-35% increase in cost (labor costs are not the driving factor for the items, in other words). This suggests that we could insist that Chinese goods be manufactured by workers who are treated not as slaves but as valued members of society.
We do not do this. Free trade! Ooh! Gee, we have to compete or get trampled!!
No…we need to refuse products made/grown in countries where the workers are treated poorly!
If Italy can make cars cheaper than us, so be it. If Germany can make computers cheaper than us–let’s buy from Germany–until U.S. manufacturers (Canadian can be substituted for U.S.) learn from their German counterparts. When China plays unfair through currency manipulation, profligate pollution of the environment, and virtual enslavement of its population…sorry, but we should not be competing with THAT.
Robert Coutinho is a disabled pharmaceutical chemist living in Massachusetts. He has been learning about life, the universe, and everything since he was born in 1963. He has had little else to do since his disability began in 1997.