Sunday, May 26, 2013

Bangladesh workers need more, not less free markets

In the aftermath of the collapse at Rana Plaza in Bangladesh, where the death toll has now risen to 1129 (Business Standard), there have been many to scapegoat "unchecked capitalism" (Hopeforthesold). The reality is somewhat different (Reason) - in fact, the opposite:

Much as in Britain after the Enclosures, urban migration swells the ranks of workers, allowing employers to take advantage of them. Since Bangladesh does not have a free-market economy, starting a business is mired in regulatory red tape — and worse, such as “intellectual property” law — that benefit the elite while stifling the chance for poor individuals to find alternatives to factory work. (The owner of the Savar factory, Mohammed Sohel Rana, got rich in a system where, the Guardian writes, “politics and business are closely connected, corruption is rife, and the gap between rich and poor continues to grow.”) Moreover, until the factory collapse, garment workers could not organize without employer permission.

Crony capitalism deprives Bangladeshis of property rights, freedom of exchange, and therefore work options. The people need neither the corporatist status quo nor Western condescension. They need radical land reform and freed markets.
What is even worse is that those like Hopeforthesold are seemingly advocating that Westerners turn their backs on Bangladesh substituting trade for unsustainable aid.

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