The bulk of the argument so far consists of:

1. Original post on supply chain economics.
1. My Reply
2. An article defending sweatshops.
1. A follow up.

I will start by tying Mr. Wides first article to sweat shops and show why I created the link. Mr. Wides tried to justify the wage employees at sweatshops earn due to the costs incurred on the supply chain. He used Nike as a case study. I have been accused of missing the point, that the article was showing educating the "economically-illiterate, [in] the difference between the production cost of a shoe and the retail price of a shoe". This point I am willing to concede, some people don't understand all the costs a business can incur and draw false conclusions from retail prices. However I was attacking his arguments on different grounds, here's a summary:

1. I poked some holes in his actual supply chain maths, particularly relating to transport and import costs. These costs are only there because they are taking advantage of lax workers protections in other countries.
2. I disputed his point about Nike encouraging ethical production by putting conditions on contracts. It isn't true, it took the Nike vs Kasky case to get them to start doing that.

I will admit I did a rush job. However that isn't the meat of this article, the meat came when Mr. Caromba published his article. Let's deal with that.

Both Mr. Caromba's article and follow-up were heavily based on an article by NY Times rightist, Nicholas Kristof, entitled 'In Defense of Sweatshops'.

The first and most commonly leveled argument can be boiled down into the simple form: "there is no alternative, without sweatshops the workers would be unemployed and earning nothing". Mr. Caromba added a South African spin "How many of those 40% [unemployed people] would be willing to take a lower-paying job if the government would allow them to?" This argument is a classic false dichotomy. There are alternatives. These range from basic income grants (Desmond Tutu likes those) to micro lending programs to business education training. These all seek to create an entrepreneurial environment that creates local development instead of exploitation. There is also another important alternative, this one sets the tone for the debate: a normal factory with workers paid above the breadline, workers rights and union representation. Both Mr. Caromba and Kristof quite like that last idea as it is hard to justify human rights abuses. However, it seems sweatshops can't escape these. This is mostly because of the desperate situation and the inexhaustible supply of desperate workers allow managers to use whatever means they feel necessary to increase productivity. Lets move this to a local context, set up a factory in SA and remove our labour protections and union power. If a manager starts disallowing women breaks to change sanitary pads, they would normally have recourse to complain, however without protection a complaint will just result in the complaintant being removed and replaced with someone else. This is how factories start their slippery slide into a sweatshop. This is the glue that binds sweat shops to human rights abuses. You can't have one without the other. There is a better discussion on this here.

Now let's move onto the other two points: how sweatshops don't encourage the right kind of development and the downsides of sweatshops. These overlap a lot.

The first point is covered quite nicely here, here and here. Sweatshops benefit a rich elite, this is backed up by reports from both Oxfam and the UN. The long hours and low wage prevent workers from breaking a cycle of poverty. Children are working instead of being educated and parents don't have enough money to send them to school.

To be completed, one day.

UPDATE: Removed non utf-8 chars.