Poverty, the Third World, and Hollywood

Hollywood often cranks out films which are far from friendly toward the free market. The 1987 Wall Street (with the memorable Michael Douglas line, “Greed is good”) is a classic case in point. Filmmakers with a conscience are of course to be applauded. Compared to filmmakers who have no moral sentiments, but only a desire to make money, these Hollywoodians are at least trying to inject some ethics into entertainment.

Of course it can rightly be asked if they are always fully on target. Attacking capitalism and corporate America is easy to do, but are these always the right targets? Are these always only villains, or can multinational corporations (MNCs) sometimes actually do some good in the world?

I was chatting to a friend recently who had just seen a documentary on working conditions in the third world (China, I think). It highlighted the long hours, the low pay and the poor working conditions. Her Christian conscience was impacted by this film, and she was quite concerned about the situation. The documentary had obviously made an emotional impact on her as well.

Now I did not see the film in question, but I can certainly agree with her that working conditions in developing countries can often seem quite horrific, certainly compared to Western standards. But that may help explain things somewhat as well: by our standards, it seems only like exploitation. But what about looking at things by their standards? Is it possible that these people are in fact grateful to have work? Are they perhaps glad to have an income (no matter how meagre)? Would they rather be unemployed? Are working conditions better elsewhere in those countries?

I ask such questions not to minimise the often lousy conditions that Third World workers face, nor to reject the Christian concerns that my friend expressed. But it seems perspective and a fuller picture can often help to put these issues into a more balanced framework.

Undoubtedly Western MNCs are happy to get by with paying overseas workers as little as possible. Many are being exploitative. But is there no case for the jobs being offered to Third World workers by foreign MNCs? Are MNCs only a force for evil in the world, or might they also perform some good?

Black American economist Thomas Sowell takes up some of these questions in a December 5, 2006 Townhall.com article. Entitled “Hollywood Economics,” he too asks if we are perhaps getting a skewed perspective from Western filmmakers on these sorts of issues.

Sowell begins by noting the irony that many of these Hollywood stars and producers actually earn more than many in Corporate America. But leaving that issue aside, he examines the various documentary films that are “critical of corporate power,” and asks, “what does this vague word ‘power’ mean when it comes to businesses?”

In answering this question, he uses the American chain Wal-Mart as an example: “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’?”

What about wages for overseas Wal-Mart workers? “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.”

He considers another big American MNC, Starbucks: “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.”

He continues, “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?”

Again, comparing Western wages to third world wages is comparing apples with oranges. “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.”

Sowell concludes, “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.”

As I mentioned, injustices and exploitation of course take place in many third world countries. But so too do jobs, economic growth and training skills. Pulling all MNCs out of the third world may seem like the right solution in the eyes of many Hollywood filmmakers. But it is certainly possible that the people losing those jobs would disagree.

Such considerations are not meant to offer a blanket excuse and/or justification for all MNCs and their practices. Nor are they meant to detract from legitimate concerns about workers’ rights, whether coming from a Christian or non-Christian perspective. But they are important in bringing some perspective and balance into the overall debate.

http://www.townhall.com/columnists/ThomasSowell/2006/12/05/hollywood_economics

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