Dismiss Notice
Join Physics Forums Today!
The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

News Is disbelief in Capitalism a market force?

  1. Nov 28, 2005 #1
    I just encountered someone who said they thought it was justified to boycott Chinese goods because he didn't like the following things: Sweat shops, Communist Governments, and China's 1 child policy.

    Now, that really is a horrible reason to boycott Chinese goods. If you dislike Communism, then why wouldn't you do what you could to support Capitalism? Furthermore, an economy growing due to Capitalism could eventually support a population that didn't need to have the 1 child policy. And if people didn't buy Chinese goods because of sweat shop labor, then there'd be no money for businesses to expand, and no way for wages to be competed up, and sweat shop labor to eventually end.

    The guy really just didn't understand basic things about how economies work, and all sorts of stuff. Either that, or he simply didn't believe in how Capitalism works.

    I was going to try to explain some stuff to hi,

    Then I thought, holy crap, is this just a crazy kind of market force?

    Could some people's inherent ignorance of how markets work and affect people actually be a force that influences these markets?

    For instance, if people didn't buy Chinese products because of the "Communist" government there, that would increase demand for cheap goods from other non-Communist governments, and businesses would shift their operations to countries that didn't have this problematic "Communist" label to them.

    I dunno, it's late (or early, depending on your perspective), and I thought that was just kinda interesting.
    Last edited: Nov 28, 2005
  2. jcsd
  3. Nov 28, 2005 #2
    Are you sure you do?

    Because all of that is political rhetoric, not economics. I've never, ever, met an economist that said sweat shops were good or necessary.

    Sweat shops seems like a perfect reason to boycott goods to me.
    Last edited: Nov 28, 2005
  4. Nov 28, 2005 #3
    Can we really be sure about anything?
    I've never really met an Economist at all, unless anyone who has a degree in Economics counts as an Economist.

    I don't believe sweat shops are good when looked at on their own, nor have I really had my ideas about them verified. My ideas about sweatshop are no one's ideas but my own, but they make a good deal of sense to me, and I should think that most economists would draw simmilar conclusions. But then, how can one truly be sure of anything?

    Here's my logic, rather condensed.

    When you've got a country with large pools of unemployed laborers who want to work, Capitalists can exploit labor to a remarkable degree.

    Since there are millions (in China's case, over 100 million) of people who are unemployed, there is an almost limitless supply of individuals who would work under almost any circumstances. These circumstances largely include sweat shops.

    The fact that people are willing to work in sweat shop conditions is demonstrated all throughout history. Look at a historical account of any strike at a sweat-shop, or simmilarly bad operation (coal mine, etc.). One of the main concerns of the workers was that if they went on strike, other laborers would simply be brought in to fill their position, and they would be out of a job.

    So, you've got all these millions of people who want to work, and that are largely willing to do it for next to no money.

    That lets the Capitalists realize huge profits. This is especially true in the case of China, where the market the companies are selling to (the west) is far wealthier than the market you're paying wages to for the labour.

    With these hug profits, the Capitalists can then expand their businesses so that they might make even huger profits.

    This goes on for a while.

    Eventually, you get to a point where there are so many factories around that there aren't these huge pools of unemployed labourers around - they've been employed. Naturally not everyone is employed, but the pool of unemployed labor is drastically decreased.

    Because of this, there is no longer the situation that a factory owner can abuse his workers and expect to find a replacement at any moment. Since there aren't these huge pools of unemployed people looking for labor, Capitalists need to treat labor to better conditions, lest some other Capitalist do it first and steal all their employees from them. Also, laborers begin to gather more sway, as there are fewer and fewer people out there to replace them. This is when Unions can really become powerful, and begin to actually bargain with Capitalists to get good conditions for Labour. Even without Unions, conditions for Labour would certainly rise, but Unions inevitably help that happen much quicker.

    Without near full employment of the work force, there is no way for Unions to arise. Capitalists would simply reject all of the Union's terms and hire people who previously had no work at all.

    This is how Western society advanced, and this is how Eastern society now seems to be advancing. At least, that's how it appears to me.

    Though you can't really be sure of anything, I suppose.
  5. Nov 28, 2005 #4


    User Avatar
    Staff Emeritus
    Science Advisor
    Gold Member

    Post #3 is too long to read... but, of course people's feelings are a market force, irrespective of whether they are based on solid evidence or unfounded emotional reaction.
  6. Nov 28, 2005 #5
    Bassically, I like sweatshops.
  7. Nov 28, 2005 #6
    Then by all means, you're free to go work in one.
    Last edited by a moderator: Nov 28, 2005
  8. Nov 28, 2005 #7
    Perhaps because I have read something that said during the industrial revolution in England, people started out as child labour at 8-9 working over 18 hours a day, got married and had kids at 14-15, and died at about thirtyish because of exhaustion, malnutrition and poor hygiene, I tend to see sweat shops as a necessary evil for the transition to something more respectable.

    Sweatshops also provide a chance to learn a trade, an exposure to western production system and is a stablizing force in general. Imagine how tens of millions of unemployed men and women could impact the society.

    And I read a while ago that the 1-child policy has changed from mandatory to strongly encouraged. Basically if you are able to pay tens of thousands of "compensation" to the government, you can have as many children as you want. I think the policy has already been implemented in rich provinces like Guangdong a few years ago.
  9. Nov 28, 2005 #8


    User Avatar

    Staff: Mentor

    Absolutely, yes. The stock markets show most directly how big of an impact mental/psychological phenomena have. The most important force is confidence (which is why "consumer confidence" is measured monthly), but certainly distrust, ignorance, apathy, and fear play a big role too.
    Well, your logic isn't bad in your explanation, but it is possible, through government intervention, to skip or minimize the sweatshop stage of development. Child labor, for example, shouldn't be allowed anywhere, IMO.

    Your point about working in a sweatshop being better than the alternative for Chinese (starvation) is certainly valid, and one people need to accept as a reality. It may not be pretty, but it is real.

    Further, because of the west's level of economic development, what constitutes a "sweatshop" here might seem like winning the lottery for an impoverished Chinese. Perspective is important here.
  10. Nov 28, 2005 #9
    I wouldn't go that far. Sweatshops are a part of economic development, but it doesn't mean that people like working 12+ hour days every day for years.

    I realize it's biased, but in my English class we're watching Wal-Mart: The High Cost of Low Price, and they interview a few people who work in a Wal-Mart plant in China. It's the usual thing, working every day for illegal amounts of time, no ventilation in their work-stations, the factory forcing them to pay rent to live in dormatories, even if they choose not to live in the dormatories.

    Though two of the people (a couple) they interviewed did have their own appartment. So even while it's crappy conditions, they've got some excess money. Still, they made it very clear that they didn't feel they had won the lottery at all.
  11. Nov 28, 2005 #10
    Because that's not what capitalism is. You don't buy things simply to "support Capitalism," you buy things because it benefits you to do so. Likewise, if I decide that I don't like sweatshops, and get some satisfaction out of not shopping at a store which uses them, then I have the right to do so. That's what capitalism is all about.
  12. Nov 28, 2005 #11
    You buy things for whatever reason you like in a free market economy.

    And it would just seem that if someone disliked Communism, that maybe they would buy goods whose profits might help topple it.

    But that's hoping for people to be too logical.

    I'm still stuck in this mind-frame of people's actions needing to make sense for any tangible end to come of them, but that's just not how Capitalism works.

    Bad brains...
  13. Nov 28, 2005 #12
    How is that in any way logical? I hate to break it to you, but the profits that Wal-Mart makes due to its Chinese sweatshops do not go to the Chinese people. They go into Wal-Mart's shareholders' pockets. If you were to get every person in America to shop at Wal-Mart for a year, it would have no tangible effect on the Chinese workers' well-being. If any of that money happens to go into toppling the communist government, it would be an infinitesmal amount. It is not logical to suggest that someone spend their money in such a way that it might have a slight effect.
  14. Nov 28, 2005 #13
    On top of that China already is mostly capitalist. Kind of hard to change a capitalist nation into a capitalist nation.
  15. Nov 28, 2005 #14
    Basically, Communism in China comes pre-toppled. Ironically, that sounds like it would be a good product to market in a Capitalistic country.

    Marx brand COMMUNISM! Now with pre-toppled, chocolately economic structure. 1 billion Chinese sold seperately.
  16. Nov 29, 2005 #15


    User Avatar
    Staff Emeritus
    Gold Member

    Their overhead costs - lease, wages, taxes, are paid to the Chinese government and people. Increasing their profits should allow them to expand their operations, leading to higher overhead costs and more money flooding into the China. The vast majority of the revenue any company pulls in is not profit.
Share this great discussion with others via Reddit, Google+, Twitter, or Facebook