There’s a Paul Krugman line about Bangladesh

In a piece of his talking about how sweatshops ain’t great but they’re better than what poor places have to offer as an alternative Krugman says something like “even Bangladesh”. On the basis that 120 million people on the flood plains of the Himalayan rivers, with little other than the people and the flood plains, has always been one of those places where the development specialists and planners go “Well, what the fuck do we do here?”

Which rather speaks to this comment on the blog here:

I’ve become more optimistic since taking the time to read Tim’s Register and Forbes articles. I like that the world is getting richer. I didn’t realise how much and how quickly.

They’re having an industrial revolution, something that’s not pretty nor nice up close but it is happening. And like most other places that have had one they’re starting in textiles. Here it’s making up the garments, not the weaving or spinning. But that industry employs 4 million and produces 82% of exports.

It’s the old thing. The options are staring at the south end of a north moving water buffalo or the factory. And the water buffalo option produces an income (including domestic production of rice etc) of perhaps 2,000, maybe 3,000 takka a month. 20 to 30 quid. Rickshaw drivers get about the same. One thing I noted was that they’re direct drive, no gears on them. Asked around and gears are considered too expensive…..that’s a certain level of poverty, no? A short rickshaw ride is 10 takka. Got to do a lot of 10 p rides to make a living….

Minimum wage in the factories is 5,000 takka. Time and a half for overtime etc (not included in that number and min wage goes to the new entrants, no training etc). As ever in these sorts of industries the “names” pay better, offer free school for the kiddies, health care etc. The penumbra of subcontractors don’t. A typical career path is off the paddy into the subcontractor factory, a year or two later, with some experience and training under the belt, into one of the main contractors.

Yes, these are shitty wages and neither you nor I would want to try to live like that (note they’re at market exchange rates, not PPP, they understate the standard of living quite a bit, at UK prices think more like £150 a month). But the change wanted, the change desired, is happening.

I was talking to one of the industrialists, and at another time to an Oxford Prof who studies these things (household surveys on stress and mental health of those in and out of the industry for example, being in it raises stress for the worker, lowers it for the extended family…economic security is valuable it seems), and both said much the same thing. The biggest problem for the factories is access to labour. They’ve pretty much swept up that reserve army and are now, to their consternation, competing with each other for access to the desired labour.

As even Marx pointed out, that’s when wages start to rise, seriously and substantially.

The people who invited me out there are the mill owners. Not even Victorian yet, this is still a Georgian economy and some are taking the high road, some the low. Some are training and developing their staff, some are squeezing them. It ain’t, as at the top, pretty nor nice up close.

But the big question in development economics has been, over these past 5 or 6 decades, well, we think we know quite a lot about various places. But what the fuck do we do about Bangladesh? No, really, that’s been the general conclusion all along. And the answer seems to be, as it always has been everywhere, to have a free market driven industrial revolution.

And it is free market too. The creation myth of the industry is that back in 197x, a bloke (I was told his name, cannot recall it) corralled a few dozen sewing machines into a couple of apartments and started. Exports in year one were $20,000. He shipped a dozen likely lads off to Korea for 6 months training, the understanding being that they would then work for him for 5 years, a non-compete clause. None of them kept to that for even 12 months, having seen that this was a bit of alright this business. Absolutely no planning, no legislation, no government help, nowt. Just the lust for profits and market experimentation.

Exports will be $28 billion this year, there’s those 4 million in employment making that double the normal wage (a teacher in a government school might make 8,000 takka a month, with free accommodation, a high school teacher in the private sector would be thoroughly middle class on 15,000 takka. 5,000 takka plus overtime straight out of the fields doesn’t look so bad).

The great economic question in all of history is how do we move on from us all standing around in muddy fields. “So, Rasel, you know how this rice stuff works?” “Fucked if I know Faruqe.” “Mohan, Mohammad, know how we stop the buffalo eating the stuff? “Not a scoobie, sorry.” The answer being that all go off and work in factories.

And it’s happening. Even in that arse end of the development universe, Bangladesh. 5 and 6% GDP growth per year from a Stone Age starting point doesn’t sound like much but they’ve been doing that for two decades now. I spent 22 hours of yesterday traveling, I should be feeling like shit. I don’t think I’ve ever been quite this generally cheerful about the world. Sure, of course, I’ve been personally more excited (that realisation that the bird with the Big Tits is about to put out always generates a certain joy for example) but in that agape instead of eros sense I am indeed that cheerful.

We’d all like this to have happened 250 years ago, when it happened to our forefathers. But it’s true, the poor are getting rich. Life for great vast multitudes of people is getting better.

Time for the Happy Dance, no?

It’s only the dawn but there’s a certain bliss to being alive and knowing it is happening. Now what I’ve got to do is work out if there is some manner in which I can get involved, help prod it along. Probably not, for it has all happened without the intervention of the western upper middle classes in how it works. It’s been everyone else voting with their dollars, buying the stuff produced, which has made it work.

But bugger me, it is working. Ain’t that fucking grand?

34 comments on “There’s a Paul Krugman line about Bangladesh

  1. Amen to all of that Tim.

    And the bonus is that the more prosperous people become where they are the less leftists can claim they should be over here.

  2. Even in that arse end of the development universe, Bangladesh. 5 and 6% GDP growth per year from a Stone Age starting point doesn’t sound like much but they’ve been doing that for two decades now.

    In fairness Bangladesh wasn’t Stone Age. Bengal was always an incredibly rich place. That is why the British East Indies Company went there. It was just rich based on a lot of poor peasants working really hard in the hot sun.

    There has been a mild debate about the place recently about the difference between economists and historians when it comes to slavery. The economists point out how productive it was and how much the slaves ate. And that makes the historians cry. Likewise, economists seem to have long been in favour of this sort of sweat shop thing. For instance, even a Marxist like Joan Robinson could say (as far back as 1962):

    The misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all.

    The problem is convincing everyone else.

  3. One of your best pieces, I think. Kudos.

    Now I wonder how the Korean textile folk who trained those guys feel…

  4. Mmmm… There’s 17m people living on the flood plain of the Alpine rivers. Not much there but flood plain & people.

  5. I don’t know how much this trip cost, but I have to say we have got their money’s worth. Worth every penny of their money. If you go on to spread this gospel wider, they might have got value for money too.

    If you convince some Westerners, those poor Bangladeshis may have got something out of it too.

  6. Wages are increasing in India at a steady and compound 10% a year – there’s slight CPI deflation in India right now, so the real increases are over time massive

  7. Not to forget the large numbers of Bangladeshis cooking and serving curry in the UK. Some have even learnt enough food hygiene for it not to give the customers guaranteed shits. Is there a Bengali word for turd? I doubt it. After all, they get all the partly burned meat coming down the river from India. Unfortunately, the stuff that doesn’t give you the shits never tastes as good as the stuff that does!

  8. By March 2017 more than half of Bangladeshis will have access to the Internet.
    In March 2015 there were only a quarter, by March 2016 it was a third.

    They have increased life expectancy by over 10 years since 1990, child mortality rate has gone from 90 to 30 and fertility rate has gone from 4.5 to 2.1

    This is an Indian study but it applies to Bangladesh as well (Bangladesh is frontrunning India).

    http://www.ey.com/Publication/vwLUAssets/EY-study-on-indian-electronics-and-consumer-durables/$FILE/EY-study-on-indian-electronics-and-consumer-durables.pdf

  9. All very laudable and uplifting but are they prepared for the end of the T-shirt economy and move up the value chain? This is from 2013:

    But once the factories have absorbed all these desperate farmers, they need to find a new competitive advantage. That usually involves making better products. When the T-shirt phase ends, a “race to the top” usually begins. Factories often shift to finer clothes, like dress shirts, which require skilled workers. This phase often involves the growth of unions and rising wages. It’s typically followed by one in which factory owners, forced to pay more, seek out ever more profitable lines of business. That can mean the move to low-end electronics assembly, then auto plants and maybe even airplane manufacturing. At the high end of the spectrum, you begin to see what the U.S. manufacturing economy is going through now — expensive products, like medical devices, which are often made by machines that are operated by highly skilled workers.

    I read somewhere but can’t find it that one of the problems is that foreigners aren’t allowed to own factories and so don’t invest in new plant and trining to move up the value chain and the locals that do own them don’t have much of an incentive or access to capital.

    ” I don’t think I’ve ever been quite this generally cheerful about the world.”

    I’ve mentioned it before, but reading Progress made me feel the same way. I’m just about to buy it for a good friend who likes to read all the miserable anti capitalism stuff about how we’re all going to hell in a handcart.

  10. I assure you that all those capitalists are thinking about exactly that thing. How do we move up the value chain?

    And there’s a bit of me thinking that generally literate and often English speaking (not the farmers of course, but the educated) people at £200 a month should be a useful resource somewhere and somehow. With decent management should be able to give the Indian script kiddies a run for their money for example. In fact, have a project which would fit in nicely, be ready in about 60 days. Needs thought.

  11. Yes, I thought of that too. I met the Minister for Jute in fact. But he’s also the Minister for textiles, and jute really isn’t something he thinks about now.

  12. Wonderful, a marvellous endorsement of cheap foreign labour .Fuck off Lancashire cotton industry; British clothing industry .We have seen rebirth of laissez faire and it works. And Fuck off Trump trying to get production in the same country as goods are sold in.
    Stand by for big crocodile tears from well-known philanthropist Tim Worstall about how we cannot deny poor Indians an increase in prosperity (and massive blood money profits for international shysters.)

  13. “With decent management should be able to give the Indian script kiddies a run for their money for example. ”

    If you want to prosper in your new venture Tim, take your English “speakers” and put them through a 60 day or so course in how to speak up, slow down and properly pronounce the language. You would then have a helpline or whatever where you can understand what the Hell they are saying.

    I spoke to 4 computer helplines recently. They consisted of a Chinese sounding woman who spoke so softly (embarrassed?) that she was near inaudible as well as having a thick accent, 2 subcontinental males who spoke at warp speed with thick accents and an African woman who didn’t listen and seemed to be reading a script verbatim –with a thick accent.

  14. No –you fuck off Reedy. The coton mills had their day–and leftist scum like you did nothing but piss and moan about them then.

    You support Trump Reedy? Who knew?

    Int’l shysters are profiting by Bangladeshi life improving Reedy? And you hate that? You hate that poor 3rd worlders are having their lives improved by int’l trade?

    That says it all about leftscum like you Reedy.

    Also we should be having ever more high-tech, high end jobs appear in this country while the former 3rd world gets rich doing the low tech stuff. That this is not happening here is almost entirely due to the curse of statism in general and socialism in particular. If you gave a shit about this country you leftist degenerate you would be agitating for a hell of a lot more economic freedom instead of your 1950s crap.

  15. ‘The problem with the poor getting rich is what? And be precise please.’

    They are going to be better off than me (because they work harder) and I won’t be able to look down on them anymore ?

  16. A-f*****g-men, Mr Ecks @ 11:29
    My ex had a Barclays account. She was also French with a strong Provence accent & had problems with anything not either RP English or London. The interface between her & Barclays’ helpline was…shall we say problematic.

  17. Reedy confirming yet again that for the left its far better the poor remain poor than a few capitalists get very rich at the expense of the poor getting richer.

  18. Oi, Ecks! I once suggested, in the University of Cambridge, that the greatest service we could provide for many of our Chinese research students would be elocution lessons.

    This was greeted by that staunch, reactionary stupidity with which great organisations generally welcome good ideas.

    One of my Colleges, though, does it on the principle that it needn’t share the stupidity of the research labs. Unfortunately its income doesn’t run to paying for professional lessons but kind-hearted academics do what they can.

    Mind you, the Chinese could improve their English just by chatting in English over lunch, rather than eating together and nattering in Chinese. I am told, however, that they mostly eat together so that they can suck up to the children of people more important than their own parents. Also, it makes it easier for the agents of the state to keep an eye on them all. One wouldn’t want to fall foul of agents of the state, would one?

  19. Come to think of it, I’ve never seen a case of the Guardian complaining that our universities are chocka with agents of the Chinese state. Why might that be?

  20. It’s been said before, but making progress makes people happy. Not just being rich, but perhaps more so the process of getting richer.

    That factory job there might seem shit to us, but the bloke doing it is probably thinking about what things outside of work he’ll soon be able to afford. Or that by doing that work, his kids won’t have to.

    My old man started off well below what would now be considered UK poverty. Spent nearly 50 years in factories. But over that time, the mortgage got paid off, the cars and holidays got better, and he knew his kids wouldn’t be doing overtime in a factory job. He’s chuffed about how things have panned out.

    Incidentally, it was growing up with that that led me to think the “Fatcher killed manufacturing” folks were talking crap, which led me to Tim’s El Reg article when I was checking that what I thought I saw was indeed true, and why I’ve kept reading Tim’s work since.

    (things were so bad during the Thatcher Terror that Dad’s idea of a manufacturing job interview was to wander round the industrial estate and ask the factory bosses if any of the machines lacked an operator. When he needed to find a job during the glorious Blair-Brown years, he got an application form from some lady in HR asking about his ambitions)

  21. Reed may come across as a selfish, stupid, luddite twat, but he’s absolutely right here.

    The Banglas are marching on towards rising house prices, as well as degenerate consumerism. Those with insufficient education and insufficiently refined tastes often make vulgar choices. Money that could have been spent on artisanal bread may well get wasted on replica football shirts.

    And who is to organise the workers and articulate their needs if the ungrateful feckers are doing it themselves?

  22. Also, it makes it easier for the agents of the state to keep an eye on them all. One wouldn’t want to fall foul of agents of the state, would one?

    Given that you were talking about Cambridge, agents of which states?

  23. DBC Reed can stand it that poor Bangladeshi people are working for a living and no longer can be classed as having got nowt. DBC on the other hand has always been and always will be driven by envy because he is a got nowt.

  24. dearieme – “And surely in every university in the West with flocks of Chinese students, I’d think.”

    Chinese students at the University of California San Diego have been demanding a Safe Space. They claim they have been offended and transgressed. Can you guess what from? Over to their Chinese Students’ Association (which I assume is just the CCP by another name):

    UCSD is a place for students to cultivate their minds and enrich their knowledge. Currently, the various actions undertaken by the university have contravened the spirit of respect, tolerance, equality, and earnestness—the ethos upon which the university is built. These actions have also dampened the academic enthusiasm of Chinese students and scholars. If the university insists on acting unilaterally and inviting the Dalai Lama to give a speech at the graduation ceremony, our association vows to take further measures to firmly resist the university’s unreasonable behavior. Specific details of these measures will be outlined in our future statements.

    Yep. They will be traumatised by listening to the Dalai Lama.

  25. @TW Rather than coming over all Post Indian Mutiny enlightened imperialist in sharing the benefits of laissez faire worker exploitation, you might consider things closer to home. Northampton lost two employers of semi-skilled and highly skilled labour Avon Cosmetics and British Timken when they scarpered to Poland solely to build new factories for the cheap labour.Explain exactly how this can be exonerated by lofty claims of the betterment of mankind : it is direct cheap labour substitution with the goods being sold in the wealthier country (ies).
    In my wide reading I came across this in the works of Sir Os (1948) ” A home market of 300 million people”(Europe) “will be large enough for all requirements of industry ,as well as being secure from dumping ,under-cutting, cheap, labour competition.” Please explain how this system ,which underlies the European project i.e to create a large self contained market from European countries of roughly equal wealth ,not dependent on import and export, is inferior to one which encourages dumping, ,under-cutting and cheap labour competition,
    (Not that I had any time for the Union Movement , becoming engaged, somewhat later, in a deliriously futile attempt to encourage a Common Market based on the Commonwealth in line with the Chamberlainite principles of this British Empire Economic Conference of 1932> see Wikipedia for an account of this workable foreshadowing of the common market.)
    I am surprised you have not dealt with the fact that the Adam Smith Inst, TaxPayers Alliance and the I FS all came out in favour of Land Value Tax on the same day (yesterday).

  26. Pingback: That Capitalist Oppression In The Garment Factories Is Making Bangladesh Rich | The Continental Telegraph

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