Sweatshops, tacos, and Wal-Mart: Is there anything to criticize?
Anti-sweatshop and anti-Wal-Mart movements are usually based on arguments that are just plain wrong
This is the institutional blog of the Ludwig von Mises Institute and many of its affiliated writers and scholars commenting on economic affairs of the day.
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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.