Blackadder’s Lair

The home of many a cunning plan

Schindler’s Sweatshops

Oskar Schindler was a German businessman and Nazi party member. During World War II, Schindler opened a factory in Poland making enamel kitchenware using Jewish slave labor. Life for the Jewish workers in Schindler’s factory was far superior to life in the Nazi concentration and extermination camps to which they would otherwise have been subjected. Still, working conditions in Schindler’s factory were such that, were they to occur in a factory in the developing world today, they would no doubt be roundly condemned. Nevertheless, Schindler is today known as a hero precisely because of the kind comparatively kind treatment he bestowed on the Jewish workers in his factories during WWII.

No doubt much of the heroism associated with Schindler’s actions has to do with his motivations. While he started his factory merely with an eye towards making money, as the war progressed he became motivated by concern for his workers in their own right, to the extent that by the end of the war he was willing to lose all of the fortune he had earlier amassed protecting his workers form the Nazis. Had he acted purely out of self-interest (first out of a desire for money, then out of a desire to save his own skin by ingratiating himself with his soon to be liberated Jewish employees) then he would likely be regarded not with awe but with disdain. But if the only difference between Schindler the hero and Schindler the villain is his motivation (not any of his actions, or the results thereof), then we must admit that it cannot be per se immoral for employers to employ workers in horrible conditions and with little or no pay. Continue reading

January 7, 2009 Posted by | Capitalism, Economics, Poverty, Trade | Leave a comment

The Miracle of the Cheese and Cigarettes

This week’s EconTalk podcast featured Mike Munger talking about the role of middlemen in the economy. In the podcast, Prof. Munger makes reference to R.A. Radford’s famous article, The Economic Organization of a P.O.W. Camp, best known for its description of how cigarettes came to be used as a substitute for money in German P.O.W. camps during WWII (cigarettes are often used as a cash substitute in modern day prisons; in prisons where smoking is prohibited, it seems they use mackerel). Solders in these camps received care packages from the Red Cross containing cigarettes, tins of beef, cheese, chocolate, and other similar items. Since not everyone valued each of the individual items equally, trade soon developed. And so, apparently, did middlemen. According to Radford, “Stories circulated of a padre who started off round the camp with a tin of cheese and five cigarettes and returned to his bed with a complete parcel in addition to his original cheese and cigarettes.”

The mystery is how he was able to do this. Was he a saint, and the increase in his basket a miraculous event akin to the multiplication of the loaves and fishes? Was he was a very wicked man, who was able to increase his own bounty by defrauding his fellow prisoners? I would think not. More likely, the priest was simply being rewarded for performing a role common to all sorts of middlemen: namely that of matchmaker. Continue reading

October 27, 2008 Posted by | Capitalism, Economics, Trade | Leave a comment

What Caused the Peace of Europe?

After century upon century of periodic warfare, the continent of Europe has, for the last 60 years or so, enjoyed a period of unprecedented peace. Why is that? To hear many Europeans tell it, the recent spate of peace in Europe is due to the advanced moral sentiments of its peoples. After enduring centuries of bloodshed, in the 1940s Europeans finally grew up, and learned to settle their disagreements peacefully (unlike the warmongering Americans).

This explanation is only plausible to the extent one ignores just how fragile and limited the peace of Europe since WWII has actually been. One can say that Europe has known 60 years of uninterrupted peace only if one ignores the Cold War that left half the continent under Soviet domination with the other half under constant threat of total annihilation, as well as repeated wars in the Balkans, the IRA in the United Kingdom, ETA in Spain, Greece’s civil war and conflict with Turkey, French wars in Algeria and Indochina, the Suez crisis, British military engagements ranging from Malaysia to the Falklands, not to mention participation by numerous European countries in the Korean war, Afghanistan, and one or both of the Iraq conflicts, to give but a partial list. If what European peace does exist is the result of some moral advancement and conflict resolution skills developed by the Europeans, then it is unclear why the above mentioned conflicts occurred. Continue reading

July 20, 2008 Posted by | Democracy, History, Trade, War and Peace | 1 Comment

How to Feed the Poor

As I’ve noted previously, food prices are increasingly rapidly throughout the world, leading to civil unrest, and threatening to significantly increase malnourishment, if not outright starvation, in the developing world. Paul Collier, author of The Bottom Billion: Why The Poorest Countries are Failing and What Can Be Done About It, has some thoughts on how to help solve the problem, and why doing so might not be very popular:

The remedy to high food prices is to increase food supply, something that is entirely feasible. The most realistic way to raise global supply is to replicate the Brazilian model of large, technologically sophisticated agro-companies supplying for the world market. To give one remarkable example, the time between harvesting one crop and planting the next, in effect the downtime for land, has been reduced an astounding thirty minutes. There are still many areas of the world that have good land which could be used far more productively if it was properly managed by large companies. For example, almost 90% of Mozambique’s land, an enormous area, is idle.

Unfortunately, large-scale commercial agriculture is unromantic. We laud the production style of the peasant: environmentally sustainable and human in scale. In respect of manufacturing and services we grew out of this fantasy years ago, but in agriculture it continues to contaminate our policies. In Europe and Japan huge public resources have been devoted to propping up small farms. The best that can be said for these policies is that we can afford them. In Africa, which cannot afford them, development agencies have oriented their entire efforts on agricultural development to peasant style production. As a result, Africa has less large-scale commercial agriculture than it had fifty years ago. Unfortunately, peasant farming is generally not well-suited to innovation and investment: the result has been that African agriculture has fallen further and further behind the advancing productivity frontier of the globalized commercial model.

Continue reading

May 3, 2008 Posted by | Economics, Food, Trade | Leave a comment