I discussed sweatshops and immigration in my Forbes column a few weeks ago. Since then, I’ve seen a couple of great posts on sweatshops and exploitation from Mark Pennington and Matt Zwolinski.
Pennington makes the curious point that the case for sweatshops is usually met with derision, scorn, and moral outrage even though it is based on intro-level economics and what is, in my opinion, very persuasive evidence comparing sweatshop wages and working conditions to the workers’ alternatives. Zwolinski asks why we cast so much aspersion on sweatshop employers who are actually paying wages and offering opportunities to their workers and do not criticize those of us who are sitting at home doing nothing or next-to-nothing for the poorest of the world’s poor.
I’m at a bit of a loss to understand why the cases for free trade and against minimum wages and rent control are not merely ignored but angrily resisted. Bryan Caplan proposes what I think is a useful mechanism: for the activist, results take a backseat to signaling the correct affiliation. If the social context is one in which showing that you care matters more than anything else, we might be able to understand the persistence of erroneous beliefs about economic issues. Dropping the anti-sweatshop petitions and picking up the banner of free trade isn’t likely to make a big difference in the grand scheme of things, but it might lose you a few friends.
Zwolinski ably takes up the left-libertarian critique of sweatshops, and it can easily be applied to left-libertarian criticisms of firms like Wal-Mart. As I mentioned a few days ago, I think the most important lesson Wal-Mart and Taco Bell teach has less to do with their virtues (or lack thereof) and more to do with what they illustrate about changes in the relative levels of coercion and cooperation over the last several centuries.
I’m the first to grant that there are solid reasons to criticize Wal-Mart/Taco Bell/sweatshops/corporations/etc; indeed, when I give lectures on the effects of Wal-Mart I generally include a section in which I discuss these reasons. Nonetheless, I don’t think libertarians should embrace the anti-sweatshop movement or the anti-Wal-Mart movement because they are generally founded on claims and arguments that are just spectacularly wrong. The anti-sweatshop movement is but one element of a much larger rebellion against basic economics. Most of the anti-sweatshop arguments I encounter are grounded in a fundamental failure to engage and understand the law of comparative advantage.
A few years ago, I wrote a Mises Daily–which I should probably update in light of the most recent research-in which I made the case that the debate about Wal-Mart is not a debate about the abuses of government power on some margins like eminent domain. The Wal-Mart debate is, for the most part, a debate about the nature and desirability of voluntary, commercial society writ large. Wal-Mart’s use of the state to steal from others via eminent domain is definitely worthy of criticism, but the typical anti-Wal-Mart case is grounded in a larger critique of commercial society. It’s use of the state to hobble its competitors via higher minimum wages and employer health care mandates also deserves criticism, but if anything, these positions have been praised rather than condemned by Wal-Mart’s more vocal critics. Similarly, the Taco Bell tomato controversy of a few years ago was based not on the kind of nuanced arguments about subtle and not-so-subtle forms of coercion that Roderick Long and others are making, but on the critics’ failure to understand or appreciate how productivity and opportunity cost determine wages in competitive markets.
Is there room in the intellectual division of labor for libertarian criticisms of firms large and small? Undoubtedly. However, I think Walter Block’s “Libertarian Nuremberg Trial” thought experiment is useful here, especially in a world where we’re trying to use our limited time and attention to make the biggest difference. When I think of those who are guilty of the greatest crimes against liberty and dignity, firms like Wal-Mart and Yum! Brands are pretty far down the list.
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34 Responses
Thank you for this post. You seem less puzzled by the scrupulosity of what you call the “left-libertarian” than I am. As I read their material, much of it strikes me as purely abstract and having little to do with the real world, almost like an extension of a parlor game that libertarians are allowed to play so long as they use their chips to come to “left-wing” anti-capitalistic conclusions. It also seems that a heavy-handed moral puritanism is being unleashed in order to distract from undeniable economic truths such as: the developing world is desperately in need of capital as a precondition for the improvement of the lives of the people; unionization would be a disaster in these countries for the same reason it has been a disaster in the UK, Detroit, France; the day that multinational corporations arrive in poor countries is a day of rejoicing for everyone but visiting intellectuals from wealthy countries. Anyone who has travel to poor lands knows the type: the patronizing socialists who are just sure that the workers and peasants would be much happier living on subsistence farms. This type has been around a very, very long time, and libertarians, of all people, should know better than to join them.
I’m a full on anarchist, not a left libertarian, and the problem with tacos, as I’ve previously mentioned is that Taco Bell was falsely advertising its taco meat as being beef when it is mostly not beef. False advertisement is fraud. Anarchists believe in handling fraud and other matters (such as property damage) through the courts.
If only we’d all micro-loan them $50, they’d be subsisting their way to prosperity.
I’ve run into a few of them myself (Ron Paul seems to have attracted a rather large crowd the last time I checked out his Campaign for Liberty site – though it has been about 2 years). Many of them take it to such an extreme that there’s even this movement going on that proposes if every family was just given a single acre of land and subsistence farm, we’d all be well off and the entirey of humanity could live in a place the size of Arizona. Of course, what kind of land it would be, what would grow, when, the extreme physical labor required, going back to boiling our food for hours before its edible to kill the e-coli from the human/animal fertilizer used, irrigation methods and who is going to maintain it (can’t rely on rain all the time), who gets the more desirable land in warmer climates next to fresh water sources, who is going to fix the tools, where on this single acre of land will all the iron and wood come from to make said tools, where electricity comes from, where the clothing comes from, and all kind of other considerations are never taken into account.
It’s bizarre that someone can take the concept of libertarianism and somehow distil out an agrarian, subsistence-only culture.
Have evidence to back that claim up? I’ve heard this one floating around for such a long time it’s best put into the urban legend category.
Nonsense. you can look up what their beef contains. No one is hiding anything. Truth: consumers love this stuff, and they love the low price. Using 100% beef (not mixing with oats and soy) would raise the price dramatically and guess what? You can get 100 anywhere. Taco Bell figured out how to make great food and make it available to the common man. This is a great company with a great product that people love.
you don’t like it, don’t eat it.
I only like it until the salt content makes my body crave 15 glasses of water because of how it dehydrates me.
But hey, we’ve become so addicted to salt in this country, who can blame them? Anything else in comparison tastes gross.
What definition are you using for addiction? Why and how are we addicted to salt? What is the level of salt consumption that does not qualify as an addiction and how do you calculate this number?
Not to mention 100% beef would be a tasteless powder since meats naturally have a large water content. One of the major complaints I’ve seen on the Taco Bell meat is that it has a lot of water in it, which is one of those “duh” moments considering we get most of our fluids not by drinking, but by eating.
If Yum brands is guilty of anything, it’s their crimes against pizza!
But Taco Bell was sued recently over the meat content in their beef, which launched that brilliant campaign where they explained the exact ingredients in their beef and sold some kind of taco for 88 cents to illustrate that their beef is 88% beef, 12% seasonings (And society destroying toxins, I’m sure)
The lawsuit was dropped.
I wasn’t being literal. I just meant that in general Americans prefer more salt over less.
Lol, the whole thing about the beef reminds me of Dr. Strangelove and the flouride.
Those in Arizona, California and New Mexico who want really good Mexican fast food ought to give Filiberto’s a try – http://www.filibertos.com/ This small chain so far has not lost its roots and I’ve been enjoying their food for close to 15 years.
Their tortillas – both flour and corn, the basis of burritos, tacos and tostados – are far superior to what I remember Taco Bell’s tasting like several years ago, when I never finished the chicken burrito I’d ordered. And Filiberto’s modest prices on all items just adds to the eating pleasure since the serving sizes are very generous. I and husband Paul often simply share a fish burro – great tasting because their is little breading on the large pieces of white fish.
I’m getting hungry for Filiberto’s food just writing about, but we are only into month #2 of our 6 months in Ontario, Paul’s legal residence. We make the Bell Rd & 19th Ave location an eat-in stop on our drive back to AZ at the end of October. On our drive northward at the end of April, we stop there for 2 burros to-go that will do us for 12 hours (a warm-up of a “breakfast” variety along the way), our last taste of good tasting economical Mexican food for 6 months.
So the “common man” who hasn’t yet enjoyed a Filiberto’s feast is in for a *real* treat!
And yet Bastiat had little good to say about contemporaries who tried to counter his arguments with appeals about how “That might be fine & dandy in an abstract, theoretical kind of way — but this is the real world we’re talking about here.”
It’s in my previous posts on previous articles. Google news Taco Bell + beef. Only takes a few microseconds.
“you can look up what their beef contains.”Yes, you can AFTER the lawsuit against Taco Bell. Please show me a list of ingredients published BEFORE the lawsuit. Certainly, claiming something as beef and calling it beef when it is not just beef is false advertisement. (Your red herrings about prices aside.)
I agree that should a person not like a product, they shouldn’t eat it. However, if the producer sells that product as beef when it is in fact not all beef, that’s fraud.
It’s like my apartment owner advertising my apartment at 890 square feet when it is in reality 750 square feet. That’s false advertisement and fraud.
I’m surprised to see fellow anarcho-capitalists condoning fraud and distracting away from it using red herrings.
That’s too true. Pizza Hut is an offense to New York style pizza. I’d rather get on a plane and fly all the way across the country for a slice before eating Pizza Hut. Nas-T!
The lawsuit, even though it was dropped (it achieved its intended effect), show how the courts are the best way to deal with instances of false advertisement and/or fraud. Isn’t that an essential pillar of libertarianism?
And to answer the primary question, some criticize corporatism.
Not so sure how other anarcho-capitalists can embrace corporations since a corporation is a government construct:
“A corporation is a legal entity that is created under the laws of a state designed to establish the entity as a separate legal entity having its own privileges and liabilities distinct from those of its member.”
Actually, if you paid attention to the news. The lawsuit was dropped against Taco Bell because they had no case.
http://abcnews.go.com/m/story?id=13404907&sid=74
http://news.google.com/archivesearch?q=taco+bell+beef&hl=en&bav=on.2,or.r_gc.r_pw.&biw=1440&bih=780&um=1&ie=UTF-8&ncl=dP7hJqA__Sb8wUM&ei=amXtTdTpMqPY0QGGo9ikAQ&sa=X&oi=news_result&ct=more-results&resnum=3&ved=0CEEQqgIwAg
I don’t understand the essence of your post. There was suspicion that Taco Bell was committing fraud. The suspicion turned into an investigation. Taco Bell acknowledged the advertisement wasn’t clear and changed it. Information is now available about Taco Bell’s beef content. Case closed. What else do you want?
Grant,
I have to disagree with your statement that “calling it beef when it is not just beef is false advertisement”. If they said “100% beef” or made some other claim that it is 100 beef then fine, but if they just advertised a taco with ground beef then I don’t necessarily see the problem. They obviously add sauce to the meat, along with salt, spice, etc. Do those things violate the claim that it is a beef taco? If not, then why does filler in the beef violate the claim?
A citizen is also a government construct. Is it OK to embrace any citizens?
Humans in general prefer more salt over less because sodium is a vital nutrient for human function. There’s a reason we have an entire area of taste buds devoted to “saltiness.”
I did Google it and all I see are a bunch of activists with egg on their face for going forward with a lawsuit without bothering to check the facts. Which is why I asked *YOU* for the evidence since you seem to continue on this tirade despite everyone else sulking back to their UFO conventions to cook up new conspiracies.
Business corporations large and small are legal fictions operating under the aegis of State laws that protect the corporation owners (viz., the stockholders) from full responsibility (viz., personal liability beyond their stock investment) for the business activities of legal-fiction corporations. Interventions by the State into the operation of the free market include this legal-fiction shielding. This corporatism masquerading as capitalism is ubiquitous and largely responsible for the heavy burden of regulation imposed by the State on the free market. And it sullies the reputation of capitalism. The requirement of taking full responsibility for one’s actions is so basic to the concept of individual liberty that I do not think it behooves libertarians, and certainly not anarchists, to defend businesses whose owners use the State’s police powers to shirk the fullness of their responsibilities.
Ned: If a corporation’s employee commits some harm to someone, why should shareholders who had nothing to do with it be held responsible for it anyway?
Free trade is the reason for minimum wage. US workers are competing with Chinese and Indian workers, not other US workers. Without a minimum wage we are in a race to the bottom.
I made pasta for dinner. If my wife sued me because I told her I was making pasta, but I also made salad and added sauce to the noodles, at what point was I guilty of fraud?
billwald-False; irrational, too. FDR is the reason for the minimum wage-1935.
And even if your point wasn’t historically inaccurate, explain how a minimum wage aid us in the glorious struggle against the evil yellow peril?
Minimum Income = Minimum wage/per hr x hours worked.
However, hours worked can be zero, particularly if the minimum wage eliminates the job, or outsources the job.
So, regardless of where the minimum wage is set, the minimum income is zero.
In sweat shops, workers are not necessarily working there five to seven days a week, it so happens that members of a family rotate the work at the sweat shop so that one day it’s the father, the next day it’s the mother, the other day it’s the older brother while they also rotate the chores at the farm, taking care of cattle, the kids, day care for the village etc.
Or if it’s not a day, they rotate for a week or two.
Some work at sweat shops is supplemental while they keep a low expense life style at their land etc.
In that case, they don’t increase their expenses by having to rent at the city, they just pay their transport and rotate with family members to not need to have a permanent dwelling there.
This helps to pay for better equipment to make crops. A mixed economy.
Those that depend solely on the sweatshop and must have an apartment in the city are those who are having it really rough.
And I complain about my local grocery store, last day I bought a water melon and almost 50% of the weight of the watermelon is water, they are basically advertising a fruit and selling me water, that’s false advertisement.
What if he commits that harm by using the company’s resources ?
And what if, that harm was not the main motive but profit was the main motive, that is the harm is a by product of the employee’s work ?
And what if, because of the activities of the harmful employee, the company is making a lot of money ?
Who’s responsible ?
Wrong logic, you are in a race to unemployment because the Chinese don’t have such minimum wages, therefore they will outcompete those US with minimum wages.
But generally, the minimum wage sector is the service sector. I’m not sure that a McDonald’s employee serving your double cheeseburger order at Fort Knox is competing with a Chinese employee serving the same food at Peking ?
Such work generates very little return on investment and therefore the minimum wage create situations where it’s no longer profitable to hire such a worker because the wealth generated by the worker is not enough to cover his wage.
Minimum wage creates unemployment and higher goods prices.
Bob: An employee is an agent of the stockholders who are deemed to be the principals in their relationship. For time immemorial it has been an axiomatic that a principal is responsible for the actions of his or her agents taken during the ordinary course of the agent’s duties. (http://www.knowledgesutra.com/forums/topic/59228-agent-principal-relationships.)