Market Forces

This cartoon suggests that the market participants aren't free to choose. The cartoon was intended to show that what Americans see as free choice guided by an invisible hand is really the result of resources held captive in some foreign country.

I would like to see higher wages for workers chained to a sewing machine for 12 hours a day.  Many economic authors such as Paul Krugman have written that the workers who work on the sewing machines get paid a higher relative wage than those workers who work in other industries in third worlds.  So even though these workers have to work long hours, they are paid more than their alternative employment opportunities.  Opponents of this viewpoint argue that workers who are often children are paid a wage below that which will allow them to save and move above the sweatshop conditions.  These opponents argue that the workers are exploited and this exploitation is part of the invisible hand of the the market.  From an economic viewpoint, the costs and benefits should be weighed to determine if sweatshops add or subtract from total utility of society.  From a moral viewpoint, sweatshops violate human rights and should be abolished.

I think this cartoon is brilliant.  The cartoon suggests that there are forces at work that are unseen.  Isn't this the premise of I, Pencil, by Milton Friedman?  When producers and consumers are allowed to pursue their own self-interests, they both gain.  Producers will find the cheapest way to produce a good because competition will force them to produce at the lowest average total cost.  Consumers benefit because they get more goods at a cheaper price.

(Economist Yasheng Huang compares China to India, and asks how China's authoritarian rule contributed to its astonishing economic growth -- leading to a big question: Is democracy actually holding India back? Huang's answer may surprise you.

Yasheng Huang asks us to rethink our ideas about China and other large emerging economies. Lately he’s been asking, Does democracy hinder or promote economic growth?)

The market system isn't perfect.  Often the invention of a new good results in waste and products that become obsolete quickly and deplete nonrenewable resources.  The market system isn't perfect, but, in my opinion, the market system results in the greatest good for the greatest number of people.