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Markets in everything, China edition

By Ezra Klein

One of the big stories in China has been a spate of suicides and suicide attempts at Foxconn, a major manufacturer that employs 800,000 workers and produces, among other things, Apple's iPad. As someone who's read a lot of Tyler Cowen in my day, this passage from China Daily's report caught my eye:

Zhang said the company has never talked with them about the suicides and did not disclose the compensation amount, rumored at about 100,000 yuan ($14,600).

Prodded by reporters, Gou said on Wednesday he was taking the injury contract back because its language was not appropriate.

But he noted the company will reduce the amount of compensation, since "high amount of compensation may encourage suicides".

Also interesting was this editorial arguing that the suicides among low-wage laborers "are but extreme examples of the problems caused by China's traditional development pattern" and they highlight the need for China to develop more businesses where they control the intellectual property and keep the profits rather than simply administer the worst, and least profitable, elements of the production process.

By Ezra Klein  |  May 28, 2010; 6:50 PM ET
 
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Comments

"...they highlight the need for China to develop more businesses where they control the intellectual property and keep the profits ..."


Rrrrrright. Any 'magic' how you can do this while undermining 'intellectual property rights' of non-Chinese businesses by rampant piracy and outright stealing of technology?

Posted by: umesh409 | May 29, 2010 1:12 AM | Report abuse

Ezra,

Yes, I am also interested to know what you may have heard about China's current atttitide about respect for international intellectual property...

Posted by: Patrick_M | May 29, 2010 2:16 AM | Report abuse

Meant to say first:

Strange, sad, and weird about the suicides and the policy response of reducing accident comp. (then my ? about IP)

Safe travels when you return, Ezra.

Posted by: Patrick_M | May 29, 2010 3:03 AM | Report abuse

"One of the big stories in China has been a spate of suicides and suicide attempts at Foxconn"

----------
"Main Entry: spate
Pronunciation: \ˈspāt\
Function: noun
Etymology: Middle English
Date: 15th century
1 : freshet, flood
2 a : a large number or amount b : a sudden or strong outburst : rush "
------------

One would think that a WaPo blogger would be able to put the statistics that have been used in the media into proper perspective. From the San Francisco Gate:

"... let's be clear about one thing: the suicide rate at Foxconn is not particularly high.

In fact, at 5.4 suicides per 100,000 people (400,000 people work at Foxconn), the Foxconn suicide rate is lower than it is in all 50 US states.

In Wyoming, where the population is 512,757, and there are no sweatshops, 22.6 people per 100,000 commit suicide, according to the American Foundation for Suicide Prevention.

In California, the rate is 9.2 – New York, 6.9." --http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/05/26/businessinsider-apple-and-dell-investigating-the-foxconn-working-conditions-2010-5.DTL

The reasons for the Foxconn story have little to do with the actual issue of suicides, and everything to do with the inability of journalists to put statistics into perspective and to understand them:

"The larger problem stems from the fact that most journalists have not been taught to critically examine statistics. They follow the herd which often means that they report numbers without providing readers a context for making sense of those numbers. In his 2008 book, "Real Education," Charles Murray, writes:

"Widespread statistical illiteracy... is cause for immediate concern because none of us, no matter how thorough our training, has the time to assess the data independently on every topic. We all have to rely on the quality of information we get from the media-and, as of today, that quality is terrible."

Reporters often write stories with statistics that are incomplete, misleading, or just plain wrong. Hopefully, the public will wake up to the fact that there is nothing wrong at Foxconn and demand that newspapers act more responsibly and begin supplying some context when they decide to instigate their next corporate suicide watch." --http://english.people.com.cn/90001/90780/91345/6994665.html

Posted by: jc263field | May 29, 2010 11:50 AM | Report abuse

Ezra,

Funny that when you wrote about eminent domain buy-outs in Cha'an in the subsequent post, wing-nut trolls portray you as a communist dupe, yet when you write here about reports of high suicide rates among workers in a Chinese factory, all we hear from the right is the sound of silence.

Why is that, do you suppose? Could it be that there is only a single one-dimensional rigid narrative allowed in the minds of certain people to explain even the most complicated things and places?

Posted by: Patrick_M | May 30, 2010 3:55 AM | Report abuse

They need to catch up on modern business practice and have insurance policies that pay the company for these people's death. WalMart (for one) was doing that year's ago. It's about time China caught up with us on these important issues

Posted by: williamcross1 | May 31, 2010 5:57 PM | Report abuse

Klein links to a Xinhua editorial. Xinhua is the Chinese version of the old, Orwellian named Pravda. There's no thought in this post that contradicts the official state line, so why should this be hailed as an example of his willingness to go beyond the Party's own explanations in discussions of suicides? THe "editorial" itself is quite opaque. Previous posters have questioned the significance of the statistics here. Nothing to see. Move on. The property confiscation suicides seem more clearly motivated.

Posted by: truck1 | May 31, 2010 8:24 PM | Report abuse

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