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One problem with using ASP and margin as the criteria for making decisions on manufacturing is that such a viewpoint gives an advantage to places with fewer wor
by totalZero 6y ago
One problem with using ASP and margin as the criteria for making decisions on manufacturing is that such a viewpoint gives an advantage to places with fewer worker protections.
A friend of mine made the point to me the other day, correctly I think, that it's very difficult to compete on price when your competitor is using slave labor. If I own a company that makes 5 products, and 1 of those 5 involves slave labor, I'm getting free work that I can amortize across all 5 products. So, even if a particular product does not involve slave labor, I can still sell it for cheaper if slave labor expands my margins somewhere else.
In a world where ASP and margins are the only criteria, forced labor camps like those found in Xinjiang make business sense. This suggests to me that maybe the "it's just business" mentality is neither ethical nor long-term sustainable, and can incentivize unlawful behavior.