kohenari: Over at the Bleeding Heart Libertarians blog, Matt Zwolinski makes the following argument about sweatshops: I support sweatshops because I believe that they are good for the poor, not because I believe that interfering with them violates the non-aggression principle, or a natural right to freedom of contract, or whatever. If you could convince me otherwise – if you could convince me that the policies I advocate set back the autonomy and welfare of the poor rather than advance them – then I would change my mind. My sense is that most people, especially on the Left, will recoil at this argument. The way that the anti-sweatshop movement took off about ten years ago suggests that a substantial number of people find conditions and wages in sweatshops to be problematic at best and monstrous at worst. Indeed, the idea that even so-called bleeding heart libertarians celebrate sweatshop labor as an example of the free market doing good for people seems to cast aspersion on libertarianism in general and on the specific idea that there can be bleeding heart libertarians at all. Of course, Zwolinski does have a point. In so many countries, a job — even a sweatshop job with conditions that I would find monstrous — is a great boon to those who would otherwise be without work and, consequently, without some (or all) of the goods necessary for life. In other words, this might be one more of those instances where the Left makes the perfect the enemy of the good: To help the people who are suffering in the sweatshops, those of us who live comfortable lives elsewhere insist on an end to sweatshop labor and thereby deprive people of the jobs they need to avoid either far worse labor options or crushing poverty and perhaps even death. But I can’t get away from the feeling that making this argument also lets us off the hook far too easily. It’s certainly true that someone who consumes very, very little is better off with a little bit more. But I don’t think that’s sufficient. Certainly, it’s better that the job exists and that someone is elevated by it from absolutely crushing poverty to simple poverty. But here’s where the rubber meets the road and I separate myself from someone who thinks that the market is the only necessary arbiter of whether or not something is allowable or legitimate. For me, there’s no reason that a corporation must (let alone ought to) take advantage of people in such a state. Corporations and their shareholders benefit from doing so and the market allows it … but this is precisely why I’m always going to find myself favoring some sort of regulation rather than simply accepting whatever happens as a result of a free market. I would take a smaller profit as a shareholder or pay more for a product as a consumer if it meant that those products weren’t being made on the backs of labor that couldn’t complain of their poor pay and poor conditions for fear of losing the only job that keeps them (and their families) from even worse conditions and/or death. And, even more obviously, if I was someone who lived in crushing poverty, I think it’s clearly right that I’d be happy for the opportunity to work and improve my lot in life … but I’d also hope that wealthy people wouldn’t take advantage of me just so that they could make a little bit more money than they already make. In the end, I keep coming back to the need for some regulation so that people don’t get stepped on because I know, from looking at things from any of these perspectives, that the people who want to run a sweatshop are motivated by profit and not by the idea that they’re helping out impoverished people around the world. What they ought to do is to provide jobs that pay a living wage for people in the foreign countries in which they want to operate; this would still cost markedly less than wages in, say, the U.S. But this either doesn’t occur to them or simply doesn’t make the best financial sense (so long as they can get away with paying less and thereby make more for themselves). So they opt not to offer jobs in countries that regulate labor conditions and instead find places that allow them to open sweatshops. It would be fantastic if we could convince people to steer their corporate ships by our moral lights, but since we don’t seem able to do that, I favor regulations that would make every country inhospitable to corporations that want to exploit impoverished people. At that time, faced with the choice of paying workers a living wage in, say, Indonesia or paying workers a living wage in the U.S., corporations could freely choose to open factories in Indonesia that would make life better for workers there while also avoiding terrible sweatshop conditions … and they could still make a tidy profit. Clearly, this is what makes me a bleeding heart and not a libertarian. And it’s arguments like the one that Zwolinski puts forward about sweatshops that make me scratch my head about the idea of combining the bleeding heart ideas with the libertarian ideas. As I see it, the bleeding heart libertarians seem to be mostly libertarians and not very bleeding heart on the issue of sweatshop labor. Multinational corporations (MNCs), which are the main employers of sweatshop labour, are often accused of being extortionate, low-paying, and generally evil entities. I disagree and I think there are extremely strong arguments for ‘sweatshops’ (the apparel industry is really the only one that I can understand a sizable amount of disagreement from the left) from all parts of the political spectrum—not just classical liberals. When surveyed, the overwhelming majority of people in abject poverty said that the best thing that could happen to their community would be a MNC. Why? Well, the most significant reason is because MNCs pay better than local businesses in poor countries—a lot better. They also employ more people, decrease prices for the products they produce when they open a plant nearby (the proximity of market to manufacturer drives costs and prices down, empirically), attract other investors, i.e. FDI or ‘foreign direct investment’ (the advantage that Latin America has had over Africa can at least partially be attributed to Latin America’s heavy FDI compared with the extremely sparse FDI of most of Africa, especially subsaharan Africa), and perhaps most importantly (from a human rights perspective, which I think should be the biggest concern of those on the left) provides opportunities for women—in poor areas with severe misogyny (see: ‘Endangered Daughters’ and just about any literature on women in Southeast Asia), these are likely to be very rare and, as a result of financial dependency, women are much more likely to be thrust into child marriages, stuck in abusive marriages, and socially stigmatized, disowned, and destitute upon the death of a husband. In some areas in Southeast Asia, women are able to be completely financially independent because of their MNC employment and are actually able to choose to postpone marriage. Some may still be disowned by their families for these choices, but the point is that they now have a choice in what they do with their lives. This gives women otherwise doomed to poverty and domestic abuse opportunities. Not-so-fun, but illustrative anecdote on the effect of workforce discrimination’s effects on culture: the discriminatory employment of Africans by colonists transformed matriarchal (as well as egalitarian, gender-progressive, and otherwise very ‘modern’) societies into societies which closely resembled traditional European ones, insofar as they took on many patriarchal, sexist, and generally discriminatory policies, because women no longer provided any ‘worth’, nor were they independently socially mobile, because they became reliant on those who the colonists would hire: men. What’s interesting (and extremely promising for the validity of a more free market model) is that the increasing transparency (information) of these companies has led to significant improvements in the working conditions of these factories, increased pay, improved benefits, and community works projects. In other words, if the demand changes (for example, increased ethical standards for companies from whom they buy), the supply will change to meet that demand (as long as the flow of information is of a high enough quality that the market can maintain a reasonable level of responsiveness). Ultimately, I would like to see better conditions in factories (and even moreso, more organic, domestic economic growth in the form of local entrepreneurship), but the reality is that no one can just will those things to happen. Those who want this to happen need to stop telling other people to fix these issues (i.e. governments) and take the initiative. If you invest in an area you’d like to see this growth, congratulations: you just contributed to the FDI which many of these areas are really lacking and if you invest wisely, the investment may contribute to significant overall economic improvement. Regulations? Those destroy competition because if you enforce regulations, especially a minimum wage, you will drive out all of the local vendors, leaving only the MNCs, who are a. already paying higher wages and b. can afford to dance with the regulations—local businesses which are already struggling to get by don’t stand a chance. This would decrease overall employment and increase the number of people living in abject poverty, which brings me to my issue with top-down economics: better outcomes, not good intentions, drive good policies. Economic manipulation, especially by the paternalistic West, subject the developing world to our preferences—not theirs—which are developed from a perspective largely ignorant of their struggles, needs, and goals. Playing with the economy at home probably won’t kill anyone, but playing with the economy of communities just struggling to survive just might. Choose your battles, not those of others.

Sweatshops for Progress