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Saturday, March 02, 2013


Advocating Freedom: Sweatshops & Fair Trade

For a middle-class American, the thought of child-labor sweatshops is understandably despicable.  And I agree.   It is an unimaginable horror that we have a tough time relating too, and has become a hot-button political debate.  But that debate often times ignores other issues that are also a reality in our world and are even more despicable; issues like child starvation and child prostitution.  Children work long hours at garbage dumps for wages barely high enough for personal subsistence.  Children starve while begging in the streets.  Children prostitute themselves to be able to eat; or worse yet, vulnerable children are abducted and forced into prostitution as sex-slaves.   These evils are just as real as sweatshops. 
We must never forget that the modern evil of “sweatshops” is not slavery; the children choose to work there.  Why would they make such a choice?  There is only one answer: they are better off with a sweatshop job than without.  They make the choice to better their lives.  They have the economic freedom to choose to work instead of beg, prostitute themselves, or starve. 
The empirical data on sweatshop laws is quite clear.  When governments make laws to ban sweatshop, there is a quantifiable increase in child prostitution and starvation.   The bottom line is this: sweatshop laws are anti-freedom.  Government is taking the economic freedom from these children to make a better life for themselves and the results are that they are worse off.  They are forced back into lives that they freed themselves from with these job opportunities. 
Don’t get me wrong.  I’m anti-sweatshops and advocate Fair Trade.  I believe that people deserve better working conditions and better pay.  But I’m also pro-freedom.   I believe that government should not take away economic freedom from people who want to work to better their lives.
So what’s the solution to this apparent contradiction?  Economic freedom is solution on both ends.  I have the economic freedom to put my money where my mouth is.  I believe that workers in third-world countries deserve better pay, so I will shop fair trade.  Next time I buy a pair of tennis shoes, I’ll pay the extra $5 to know that they were made at a factory with good working condition a high pay.  That’s the economic freedom I have as a tennis shoe consumer. 
So if you are anti-sweatshop, you must realize that labor laws are not the solution: you’ll be taking away their freedom and forcing them back into starvation or prostitution. Instead, use your own economic freedom to shop fair trade.  Or better yet, sponsor a child.

You might take another look at "fair trade." The market process can be expected to bid output prices toward marginal costs of production, and also to allocate resources to the lowest cost producers. If this is the case, then you might wonder how "fair trade" accomplishes a higher price for commodities which otherwise seem to be traded under relatively competitive conditions. Is it possible that the force is at work in the "fair trade" countries?
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