When I think that the world’s situation is pretty nearly hopeless, it’s always a tonic to read a column by the great Thomas Sowell. His popular writing is informed, of course, by his expertise as a top-notch economist. But it draws far more on the common sense that Sowell possesses to a truly extraordinary degree, and his willingness to engage issues on a level that is accessible to pretty much anyone. Witness this weeks’s column, in which Sowell takes on anti-business Hollywood films. Needless to say, it’s a mismatch:
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”?
“Power” in this case is shorthand for “knocking themselves out to serve people, especially people of limited means.” Sowell continues:
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.
The aphorism that “talk is cheap” expresses a tangible economic fact. More:
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?
Once again we encounter the basic distinction between talk and money. Still more:
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.
What the Third World needs are more multinational corporations, not less.
Yes. And what the world needs is more Thomas Sowells.