Friday, October 10, 2014

Nobel Prize for bad economics

That would be an apt headline for this story;
On Friday, [Kailash] Satyarthi, 60, was awarded the Nobel Peace Prize along with Pakistan's Malala Yousafzai for having devoted three decades of his life to defending children's rights.
"I strongly feel that this is a big honor to hundreds of millions of the children who have been deprived of their childhood and freedom and education. So it's a big challenge and this will help in our fight against child labor and child slavery globally, and particularly in my own country," he said.
But isn't the crime against humanity being committed by Satyarthi, who has devoted his life to depriving the desperately poor children of India opportunities to improve their material conditions?
He founded Bachpan Bachao Andolan, or Save the Children Movement, because he believed that child labor "isn't just about poverty. It's more than that."
....Satyarthi and others from his organization conducted raids on poorly lit and cramped workshops where dozens of children were illegally forced to weave carpets or saris. He would ask reporters and photographers to accompany his volunteers on the raids.
Dozens of scared and confused children would pour out of factories and sweatshops that his group raided.
Scared and confused because they now had no money, probably. Just so Satyarthi and friends could morally posture and feel good about themselves. As Paul Krugman once put it--before he gave up economics to become a political hack--in In Praise of Cheap Labor;
... let me make a counter-accusation: The lofty moral tone of the opponents of globalization is possible only because they have chosen not to think their position through. While fat-cat capitalists might benefit from globalization, the biggest beneficiaries are, yes, Third World workers.
Just as the children who Satyarthi put out of employment were the beneficiaries of their employment (whether or not their carpets and saris were sold globally). Slate Krugman put it as well as it ever has been said;
You may say that the wretched of the earth should not be forced to serve as hewers of wood, drawers of water, and sewers of sneakers for the affluent. But what is the alternative? Should they be helped with foreign aid? Maybe--although the historical record of regions like southern Italy suggests that such aid has a tendency to promote perpetual dependence. Anyway, there isn't the slightest prospect of significant aid materializing. Should their own governments provide more social justice? Of course--but they won't, or at least not because we tell them to. And as long as you have no realistic alternative to industrialization based on low wages, to oppose it means that you are willing to deny desperately poor people the best chance they have of progress for the sake of what amounts to an aesthetic standard--that is, the fact that you don't like the idea of workers being paid a pittance to supply rich Westerners with fashion items.
In short, my correspondents are not entitled to their self-righteousness. They have not thought the matter through.
Our bold in the above quotation from Krugman, because we see no evidence that Satyarthi in fact offered the children any better alternatives. He's being praised, by the Nobel committee, for cheap sentiment.

We eagerly await the Paul Krugman blog post or NY Times column agreeing with our analysis.

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