Sweat Shops and the Need for Libertarian Moral Outrage

I haven’t been able to post for the last week or so owing to my lecturing on the Institute for Humane Studies Liberty and Society Summer Seminars (i’m currently between seminars). Last week’s seminar included a great presentation by Scott Beaulier. Using data on wage rates published by anti-sweatshop campaigners (i.e not from ‘right wing’ think tanks), he showed unequivocally that sweatshops operated by US and European companies significantly improve the available opportunities to workers in developing countries, often providing wage premiums more than 50% higher than the rates offered by local employers. In view of the overwhelming weight of this evidence it was depressing to hear Scott report on the often hostile response to these research findings from the so called ‘anti-poverty’ campaigners he often has to deal with. Distinguished economists such as Jagdish Bhagwati have been booed off stage for having dared to make the economic case defending a liberal trade regime in terms of the benefits it can bring to the poor.

This raises an important question for libertarians and others who wish to promote open markets. If providing rigorous economic arguments backed up with good empirical data doesn’t convince the anti-market brigade then what options do we have left? Apart from continuing to make the economic/empirical case I would suggest that there is no substitute for some moral outrage. Those who make a living from giving the appearance of caring for the poor and destitute (or who wear the fair trade t-shirts) while simultaneously lobbying for the eradication of the best opportunities that the least advantage have, should be exposed for the weakness of their morals. It is a profound weakness to prefer having the ‘right’ social image to having the nerve to confront the best evidence and to support what really works.

Read the article on the Pileus website.

Mark Pennington is the author of Robust Political Economy: Classical Liberalism and the Future of Public Policy

IEA Fellow of Political Economy

Professor Mark Pennington is a fellow in Political Economy at the Institute of Economic Affairs and is also a lecturer in Political Economy at King's College, London. Mark holds a PhD from the London School of Economics, has been published in a number of publications and is co-editor of The Review of Austrian Economics.

2 thoughts on “Sweat Shops and the Need for Libertarian Moral Outrage”

  1. Posted 17/06/2011 at 05:45 | Permalink

    Having travelled in many parts of asia, I both agree and disagree witht his article. Some companies have sweatshops which require workrs to work 12 hours a day or more, 6 or 7 days a week and the workers live in cages. The workers are mostly women. Some do not allow workers to go the toilet, have breaks etc.

    Other companies have factories with somewhat better working conditions and wages which are fairly decent, subsidised cantines and they pay overtime. These are typically electronics companies or other light industry.

  2. Posted 20/06/2011 at 09:59 | Permalink

    Matthew – thanks for the comment. The key thing about the paper I quoted – the orginal is by Ben Powell in the Journal of Labour Research is that the data come from anti-sweatshop campaign groups – though the groups would, of course, be suprised by the overall findings.
    In all of this, the most important issue is that conditions supplied by indigenously owned companies or conditions that exist when people merely work for themselves in say subsistence farming are worse or considerably worse than those provided in foreign owned plants. As European and US firms move in to these markets they have to offer better conditions in order to attract people away from their existing employers or occupations. All of this is elementary economic theory – something which seems to completely escape the anti-sweatshop campaigners.
    The one exception to the above analysis is in situations where people are literally forced to worked for others – .i.e. slave labour. By forced – I don’t mean ‘forced by the lack of alternative opportunties’ , but rather forced as in ‘at the point of a gun’ or threat of violence.
    Thanks again
    Mark P.

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