The Real Problem in Bangladesh

The always perceptive Sheldon Richman weighs in on the Bangladesh tragedies. He starts by summarizing the status of the resulting debate over whether or not international standards on building safety should be enforced against Bangladeshi manufacturers:

“Proponents of standards argue that the costs would be small and the benefits great,” and “Opponents of government regulation argue that artificially raising the costs of manufacturing in poor countries would harm intended beneficiaries by destroying jobs.”

Then he identifies the real problem:

Unfortunately, the debate is unnecessarily narrow. What needs discussing — and radical changing — is the country’s political-economic system, which benefits elites while keeping the mass of people down. The economists are correct that under the status quo, imposing safety standards would raise costs, cause unemployment, and aggravate poverty. But we can’t leave the matter there. We must go on to examine how the political-economic system constricts people’s employment opportunities, including self-employment, and otherwise stifles their efforts to improve their lives. Thus, a debate over whether garment factories should be subject to safety regulations, while the status quo goes largely undisturbed, misses the point.

What Bangladesh needs is much more economic freedom. A system now controlled by landed elites stifles opportunity for the masses. Fix the problem of successful predation by privileged elites and Bangladesh would prosper quickly, including making voluntary improvements in building safety.

For evidence of how successful privilege-seeking reduces prosperity along New Mexico’s border look here.