- Cafe Hayek - https://cafehayek.com -

The True Cost

Tweet [1]

Here’s a letter to the Los Angeles Times:

Fashion critic Booth Moore is clearly moved by Andrew Morgan’s new documentary, “The True Cost [2],” which highlights the terrible work conditions and pay in third-world factories that manufacture the inexpensive clothing now enjoyed by denizens of rich countries (“’The True Cost’ documentary tallies global effect of cheap clothes [3],” May 28).  Yet not once in her review of “The True Cost” does Ms. Moore ask the key question that is asked by those scholars who, above all others, think most deeply and consistently about true costs: economists.  That question is “As compared to what?”

Compared to work conditions and pay today in rich countries such as the U.S. and Sweden, work conditions and pay today in developing countries are indeed awful.  But despite being the one comparison that apparently is central to the film, this comparison is inappropriate and misleading.  Instead, the relevant comparison is of third-world workers’ current pay and work conditions with these workers’ realistic alternatives.  The fact that so many third-world workers willingly endure the harsh conditions and low pay that now prevail in third-world garment factories is powerful evidence that these workers’ alternatives are even worse.  Therefore, if Mr. Morgan and other activists succeed in their efforts to reduce the rich-world’s demand for clothing produced in the third world, many third-world factory workers will personally suffer the true cost of rich-world-activists’ economically ignorant concern for them – namely, being obliged to toil at jobs that pay even less and in conditions that are even dirtier and more dangerous.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

Comments