Naked Economics by Wheelan, Charles (spanish books to read .txt) 📕

sweatshops,” they recalled fourteen years later. “In time, though, we came to accept the view supported by most Asians: that the campaign against sweatshops risks harming the very people it is intended to help. For beneath their grime, sweatshops are a clear sign of the industrial revolution that is beginning to reshape Asia.” After describing the horrific conditions—workers denied bathroom breaks, exposed to dangerous chemicals, forced to work seven days a week—they conclude, “Asian workers would be aghast at the idea of American consumers boycotting certain toys or clothing in protest. The simplest way to help the poorest Asians would be to buy more from sweatshops, not less.”19

You’re not convinced? Paul Krugman offers a sad example of good intentions gone awry:

In 1993, child workers in Bangladesh were found to be producing clothing for Wal-Mart and Senator Tom Harkin proposed legislation banning imports from countries employing underage workers. The direct result was that Bangladeshi textile factories stopped employing children. But did the children go back to school? Did they return to happy homes? Not according to Oxfam, which found that the displaced child workers ended up in even worse jobs, or on the streets—and that a significant number were forced into prostitution.20

Oops.

Preferences change with income, particularly with regard to the environment. Poor people care about different things than rich people do. By global standards, poor does not mean settling for a Ford Fiesta when you really wanted the BMW. Poor is watching your children die of malaria because you could not afford a $5 mosquito net. In parts of the world, $5 is five days of income. By those same standards, anyone reading this book is rich. The fastest way to end any meaningful discussion of globalization is to wave the environment card. But let’s do a simple exercise to illustrate why it may be terribly wrong to impose our environmental preferences on the rest of the world. Here is the task: Ask four friends to name the world’s most pressing environmental problem.

It’s a fair bet that at least two of them will say global warming and none will mention clean water. Yet inadequate access to safe drinking water—a problem easily cured by rising living standards—kills two million people a year and makes another half billion seriously ill. Is global warming a serious problem? Yes. Would it be your primary concern if children in your town routinely died from diarrhea? No. The first fallacy related to trade and the environment is that poor countries should be held to the same environmental standards as the developed world. (The debate over workplace safety is nearly identical.) Producing things causes waste. I remember the first day of an environmental economics course when visiting professor Paul Portney, former head of Resources for the Future, pointed out that the very act of staying alive requires that we produce waste. The challenge is to weigh the benefits of what we produce against the costs of producing it, including pollution. Someone living comfortably in Manhattan may view those costs and benefits differently from someone living on the brink of starvation in rural Nepal. Thus, trade decisions that affect the environment in Nepal ought to be made in Nepal, recognizing that environmental problems that cross political boundaries will be settled the same way they always are, which is through multilateral agreements and organizations.

The notion that economic development is inherently bad for the environment may be wrong anyway. In the short run, just about any economic activity generates waste. If we produce more, we will pollute more. Yet it is also true that as we get richer, we pay more attention to the environment. Here is another quiz. In what year did air quality in London (the city for which we have the best long-term pollution data) reach its worst level ever? To make it easier, let’s narrow the choices: 1890; 1920; 1975; 2001. The answer is 1890. Indeed, the city’s current air quality is better than at any time since 1585. (There is nothing particularly “clean” about cooking over an open fire.) Environmental quality is a luxury good in the technical sense of the word, which means that we place more value on it as we get richer. Therein lies one of the powerful benefits of globalization: Trade makes countries richer; richer countries care more about environmental quality and have more resources at their disposal to deal with pollution. Economists reckon that many kinds of pollution rise as a country gets richer (when every family buys a motorcycle) and then fall in the later stages of development (when we ban leaded gasoline and require more efficient engines).

Critics of trade have alleged that allowing individual countries to make their own environmental decisions will lead to a “race to the bottom” in which poor countries compete for business by despoiling their environments. It hasn’t happened. The World Bank recently concluded after six years of study, “Pollution havens—developing countries that provide a permanent home to dirty industries—have failed to materialize. Instead, poorer nations and communities are acting to reduce pollution because they have decided that the benefits of abatement outweigh the costs.”21

Climate change is a trickier case, in that carbon emissions are a zero-sum situation, at least in developing countries in the near term. Big, rapidly growing countries like China and India have a voracious appetite for energy; to meet that need, they turn mostly to carbon-based fuels. China is heavily dependent on coal, which is a particularly bad CO2 offender. Trade makes these countries richer. As they get richer, they will use more energy. As they use more energy, their CO2 emissions will rise. That’s a problem. So what is the best remedy?

If you think it is to curtail trade, let me present a slightly different version of the same basic challenge. China and India are sending more and more of their citizens to university (while extending basic education more widely, too). Education is making China and India richer. As they get richer, they use more energy…Do you