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Those Foxconn workers would be worse off without their job (otherwise, why not quit?). Of course, when you have millions of employees, there will inevitably be some nut-jobs among them.[1]

Also, I think you misunderstand the meaning of externalities. From Wikipedia:[2]

In economics, an externality, or transaction spillover, is a cost or benefit not transmitted through prices that is incurred by a party who did not agree to the action causing the cost or benefit.

As far as I know, everyone part of the iPhone manufacturing process agreed so.

Disclosure: I live a few blocks away from the Foxconn's plant in Shenzhen.

[1] http://www.telegraph.co.uk/news/worldnews/asia/china/9006988...

[2] http://en.wikipedia.org/wiki/Externality

That must be the Longhua plant (Foxcon City) because no way I would want to live near the Guanlan one ;-). I spent a few weeks at the Guanlan iPhone factory at the end of 2010, debugging my device driver.

Yes, near the Longhua plant ;)

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