Lochner in China

In the book Will the Boat Sink the Water? The Life of China’s Peasants, Chen Guidi and Wu Chuntao conclude that “the edifice of China’s industry is built from the flesh and blood of toiling peasants, and urban development was achieved through their pain and sacrifice.” It looks like the wonders of freedom of contract will spare some managers the hassle of dealing with the collateral damage:

In the wake of a huge wave of suicides at Foxconn plants, the company began reforming its practices related to the suicides. Among these changes included installing anti-suicide nets to catch workers who attempted to leap out of company windows. Yet workers are also being forced to sign a non-suicide pact as a condition of employment. As part of the pact, the employees families have to promise “not sue the company, bring excessive demands, take drastic actions that would damage the company’s reputation or cause trouble that would hurt normal operations” in the case of a suicide.

I highly recommend the entire report from Students & Scholars Against Corporate Misbehaviour (SACOM), a Hong Kong-based advocacy and research group that has studied the production process in some detail. Even more mundane aspects of some workers’ lives are hard to explore, given another contract they are free to sign. Some workers “did not dare to tell their basic salary, position, product that they produce, fearing that will constitute a breach of ‘confidential[ity] agreement[s].'” With a bit more vigorous contract enforcement, laissez-faire’s apologists may never have to hear again about squalid dormitories, 100-hour weeks, and shifts of standing for 14 hours in a row. Who knew the market could so efficiently reduce the negative externality of guilt-inducing news?

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