Exploitation

2018/07/15 writing

The idea that sweatshops and exploitative investment are ultimately a least-worst worthwhile development mechanism persist. They're vaguely premised as a corollary to Adam Smith's "Invisible Hand" metaphor.

The idea has been falsified time and time again. Crucially, historically onwards until today, the USA has had to deploy its military to protect its commercial interests (see: Banana republics).

Modern, more academicized explorations also undermine glib theory:

In the 1990s, Americans learned more about the appalling conditions at the factories where our sneakers and T-shirts were made, and opposition to sweatshops surged. But some economists pushed back. For them, the wages and conditions in sweatshops might be appalling, but they are an improvement on people’s less visible rural poverty. As the economist Joan Robinson said, “The misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all.”
 
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Expecting to prove the experts right, we went to Ethiopia and — working with the Innovations for Poverty Action and the Ethiopian Development Research Institute — performed the first randomized trial of industrial employment on workers. Little did we anticipate that everything we believed would turn out to be wrong.

Besides being incorrect, the "least-worst mechanism" framing necessitates a response to the question of why we settle for such a bad equilibrium anyway. Here the Panglossian economist would invoke "don't blame markets, blame consumers".

This is precisely why we criticize capitalism as a system rather than sating ourselves with targeting specific "bad apples" like some corrupt greaser here or there. Capitalists aren't the masters of capitalism, they're the agents of capitalism. Pursuing a "blame game" amongst these parties ("the salesman only sold what the person wanted! the person only wanted it because the salesman gave no choices!") is an intellectual dead-end.