Whenever there's a World Trade Organization, Monetary Fund or
World Bank meeting, crowds of idealistic, useful idiots show up to riot and
protest against what they call globalization and capitalistic exploitation
of Third World poor people. They charge Western multinational corporations
with exploiting the poor through "slave" wages and child labor. Let's
examine this nonsense.
According to The Economist magazine, multinational corporations
typically pay wages that are double the local wages in Third World countries
but far below those paid in richer countries. That, to protesters, is
evidence of exploitation of the poor -- but is it?
For argument's sake, suppose without the presence of a
multinational corporation the best job a poor, uneducated Ugandan can land
pays $2 a day. A multinational corporation builds a factory and hires that
Ugandan for $4 a day, a wage well below what it pays workers in the United
States. Plain common sense says that the Ugandan has been made better off by
the presence of the multinational corporation and would be made worse off if
the multinational corporation were politically pressured to leave. How much
sense does it make to characterize an action that makes that Ugandan better
off as exploitation?
You say, "OK, Williams, we understand that, but why did you call
the demonstrators useful idiots?" Rich-country labor unions and some
companies would benefit if higher costs and legal restrictions can be
imposed on multinationals. It would mean that fewer jobs would go overseas,
thus enabling union workers to demand higher wages. Fewer cheaper goods
would permit some companies to charge higher prices for goods domestically
produced. The idealistic, uninformed demonstrators are useful tools to
achieve wage and profit objectives.
Speaking of jobs, President Bush is being criticized for the
weak economy; he's not creating enough jobs. Such a criticism stands at the
height of ludicrousness. Politicians cannot create jobs. Or, more accurately
put: They can only create one job by destroying another.
Think about it. Suppose Congress and the president spend a
million dollars for a "stimulus package." Will it be the Tooth Fairy, Santa
Claus or the Easter Bunny who gives them the money? Obviously, the money
must come from somewhere in the economy.
Since that's true, we must ask what was that money going to be
used for if Congress hadn't taxed it away for a "stimulus package"? People
would have spent the money purchasing goods that would have created or
sustained employment. If Congress borrowed to finance the stimulus package,
what activities had to be curtailed because of higher interest rates
resulting from government borrowing?
By the way, if you disagree with me and insist that Congress and
the president do have job-creation powers, then Williams has identical job
creation powers. I can create lots of jobs simply by purchasing several
hundred crowbars, distributing them to my George Mason University students
and instructing them to go smash automobile windshields.
Think of all the jobs that would be created at auto repair
shops. But those jobs would come at the expense of other jobs, because
people having to spend a couple hundred dollars getting their windshields
replaced wouldn't have the same dollars to take their children to
Disneyland, thereby reducing Disneyland jobs.
In general, presidents and congressmen have very limited power
to do good for the economy and awesome power to do bad. The best good thing
that politicians can do for the economy is to stop doing bad. In part, this
can be achieved through reducing taxes and economic regulation, and staying
out of our lives.