Justice Overseas?

Tom_4b
I am thankful for a recent article by Thomas Sowell, printed below, which caused me to pause and consider some different views on "economic justice" in the 3rd world. Sowell is a Senior Fellow at the Hoover Institute and an economics professor at Stanford. He is pictured here to the left.

Please read and offer your thoughts.

Hollywood economics
By Thomas Sowell
Tuesday, December 5, 2006

It is not really news that Hollywood is still producing anti-business movies, but there is a certain irony in it nevertheless.

Although
these movies tap a certain envy and resentment of corporate wealth,
that large corporate wealth comes from far more modest individual
amounts of money from about half the population of the United States,
which owns stocks and bonds — either directly or because money paid
into pension funds or other financial intermediaries are used to buy
stocks and bonds.

The irony is that the average Hollywood star who is making
anti-business movies is far wealthier than the average owners of those
businesses, who are half the population of the country.

The Los Angeles Times refers to documentary "films" that are
"critical of corporate power." But just what does this vague word
"power" mean when it comes to businesses?

Wal-Mart is the big bugaboo these days but what "power" does
Wal-Mart have? I lived three-quarters of a century without ever setting
foot in a Wal-Mart store and there is not a thing they can do about it.

It so happened that this past summer in Page, Arizona, I
needed to buy some toiletries, which caused me to go into a nearby
Wal-Mart for the first time. Inside, it looked more like a small city
than a large store. But the prices were noticeably lower than in most
other places. Is that the much-dreaded "power"?

Apparently Wal-Mart does not pay its employees as much as
third-party observers would like to see them paid. But obviously it is
not paying them less than their work is worth to other employers or
they probably would not be working at Wal-Mart. Moreover, third parties
who wax indignant are paying them nothing.

One of the morally indignant "films" (more high-toned than
"movies") coming out of Hollywood makes the same complaint against
Starbucks, depicting poverty-stricken Ethiopian coffee growers
providing beans for the big-bucks coffee store chain.

Are the Ethiopian coffee growers worse off now that Starbucks
is buying their beans? Supply and demand would suggest otherwise. But
moral crusaders seldom have time for economics.

If those who claim to be concerned about the Ethiopians’
poverty really are, why is not relieving that poverty just as much
something for them to do with their own money as for Starbucks to do
using money invested by other people — including nurses, mechanics,
teachers, and others who are paying into pension funds to provide for
their own old age?

The tragic fact is that productivity is far lower in poor
countries. That is the fundamental reason why they are poor in the
first place. You cannot pay American wages to workers whose average
productivity is a fraction of that of American workers, without driving
up the cost of production to the point where businesses will take their
jobs to some other country.

The real comparison is not between what people are paid in
Third World countries compared to what people are paid in the United
States. The comparison that affects outcomes is what Third World people
are paid by multinational corporations compared to what they can earn
otherwise. By and large, multinational corporations pay about double
the local pay in Third World countries.

Third World workers line up for these jobs and even bribe
insiders to get them such jobs. If economically illiterate Hollywood
busybodies and other mindless crusaders succeed in establishing more
costly pay scales without regard to productivity, that will undoubtedly
lead to fewer jobs, just as similar policies do in other countries.
There is no free lunch in the Third World, any more than there is
elsewhere.

The net result will be people feeling good about themselves in
Hollywood, in academia and in the media, while leaving havoc in their
wake among the Third World people they claim to care about.

What the Third World needs are more multinational corporations, not less.

As more multinational corporations move into a poorer country,
the people there not only get additional economic opportunities, they
acquire skills and job experience that raise their productivity and
earnings potential, even if that outrages the economically illiterate
in Hollywood."

Dr. Tim Spivey is Lead Planter of New Vintage Church in San Diego, California. He is the author of numerous articles and one book, "Jesus: The Powerful Servant." A sought after speaker for events, Tim also serves as Adjunct Professor of Religion at Pepperdine University. Tim serves as a church consultant, and his writings are featured on ChurchLeaders.com, Church Executive magazine, Faith Village, Sermon Central, and Giving Rocket.

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