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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Saturday, April 22, 2006

A Free Market Attack on Sweatshops

From "Establishing Government Accountability in the Anti-Sweatshop Campaign," by Ellennita Muetze Hellmer, in the Summer 2005 issue of Journal of Libertarian Studies:

...many observers—especially libertarians— tend to view [anti-sweatshop boycotts] as actions arising from an ignorance of basic economics.... However, it is not necessarily correct to entirely dismiss the sense of injustice felt by these groups. Although these organizations may be misguided in only attacking the wages paid by corporations, the claims of injustice are not always fictitious, not by a long shot. In some countries, such as Burma/Myanmar, workers are forced by the state to work in miserable manufacturing jobs for powerful multinational corporations.... In other countries, such as Indonesia and several of those in Central America, governments have followed models of economic development that forced people from their land in order to attract multinational firms to export goods to the global economy and give the politicians a cut of the profit.... These models of sweatshop development do not follow the free-market ideal of resource allocation.... There is a link between such utilitarian models of economic development and slavery, as the former is a government’s way of violently forcing people to follow a model of economic action that these people would not agree to otherwise—presumably because they do not see the model fitting their best interests. Indeed, in these cases protesting voices should be heard, as governments are clearly violating the personal and property rights of individuals.

As many of the goods produced under these conditions are exported to the global economy, libertarians and other humanitarians should educate themselves about the conditions under which they are produced in a way that extends beyond the basic use of free-market teleology to explain why some people work in miserable conditions. Indeed, acknowledging that governments are often responsible for the plights of “sweatshop laborers” is an important step in fighting for the economic and civil liberties of people throughout the world. This step goes beyond the band-aid propositions of “corporate social responsibility” put forward by many anti-sweatshop organizations by addressing the real cause of miserable working conditions in many parts of the world. Anti-sweatshop organizations would therefore be better advised to focus on the government actions that have led to the miserable labor conditions that they are so fond of describing, thereby protesting these as the real cause of much of the misery evident in the developing world. Indeed, a fight for private property and personal protection against coercive aggression would be a more sustainable, logical, and economically literate approach to improving the conditions of the working poor of the world.

....Often, the harsh facts of global political economy do not follow the rules of free-market theory as the prerequisite of voluntary choice is often absent; people are sometimes kidnapped and forced to labor by their governments, and property rights are not always respected. While the above activities do not prevent individuals from pursuing what they believe to be their own best-interest, it is not reasonable to defend their choices and ignore the previous injustices that have led to their current state if one is to make a humanitarian argument against interference in the market. In a world in which personal and property rights are always respected, the logic of the economic libertarian is impeccable; however, advocates of this philosophy should continuously remind ourselves that this is not always the context in which real suffering people (especially in underdeveloped nations) operate when we demand that corporations be allowed to benefit from the differing legal systems abroad....

There is a strong connection between land expropriation and forced labor. Even without the legislation that has been passed in many parts of the world that explicitly leads to slavery, land expropriation forces the original landholders to pursue economic courses of action they would not have pursued if left to their own devices. Indeed, as writer George Beckford (1972) pointed out in his classic work Persistent Poverty, few people he has encountered choose to work for others when they own their own land, a condition that makes the land expropriation necessary in the first place. This pattern is most clearly seen in the history of Central America.

16 Comments:

Anonymous Anonymous said...

Reading this post reminds me of the first time I read Johan Norberg's "In Defense of Global Capitalism", wherein he says that he evolved from an anarchist to a libertarian, and had a change of heart on sweatshops. I tell you what, I didn't get a perspective like Hellmer's from his little happy-happy-joy-joy book celebrating status quo "free markets". And perusing his blog, he seems to be a believer in American led democracy/free trade imperial hegemony (i.e. death and destruction).

It's guys like that who make PRO-globalization activists look like vulgar libertarian jerks.
Thank you for following libertarian principles to their logical conclusion.

-Dain/Mupetblast

April 22, 2006 12:01 PM  
Blogger Sheldon Richman said...

Somehow I overlooked this JLS article. Thanks, Kevin!

April 22, 2006 2:30 PM  
Blogger Bbo Wallace said...

I decided many years ago "libertarians" and what they think are "free-market economics" were going exactly nowhere when they defended some eight-year-girl working 12 hours a day in a sweatship by saying, "Well, if she didn't have this job the only thing she could do is be a prostitute."

That kind of either/or mentality will never sit well with the vast majority of people in the U.S.

April 23, 2006 5:05 AM  
Blogger Mike said...

I still think that this leaves the problem of what is to be done unanswered. A boycot of sweatshop goods, if successfull, could leave the people without job or land. Unless you have an idea for effecting the politics of third world nations, I'm not sure what to do.

Also, I think that usually, the standard anti-sweatshop arguments found here tend to miss some of the pro-sweatshop arguments. Sweathshops actually do bring money and increased capital into these nations. As poor nations increase in income they also become more democratic.

I am also curious about the connection betwen the land expropriation and the building of the factories. All the article seems to claim is a loose connection, and assumes that if the people had land they wouldn't work in factories. That seems like a rather large assumption.

April 23, 2006 7:37 AM  
Anonymous Anonymous said...

I think it'd be worthwhile to investigate certain claims of sweatshop exploitation case by case, and be wary of sweeping legislation, all the while agitating for indigenous land rights and other left libertarian causes - anti-patent, etc.
There are some things that I suppose more hysterical anti-sweatshop activists may not understand, like the abolition of child labor altogether being impractical in countries with low lifespans and an equally low level of development. But there is still much merit in their campaign.

-Dain/Mupetblast

April 23, 2006 10:50 AM  
Anonymous Nathan said...

As poor nations increase in income they also become more democratic.

I think the evidence is against you there, but it really depends what you mean by "more democratic". In most cases "more democracy" means less freedom. Democracy is just one tool, and it is usually misapplied.

April 24, 2006 4:03 AM  
Anonymous P.M.Lawrence said...

Mike, you've slipped into accepting some things without realising it. Let me go over them.

"Sweathshops [sic] actually do bring money and increased capital into these nations." Well, partly no, and partly so what. The increased capital isn't handed over, so the only benefits from that come from trickle down. As against that, there is a loss of local resources so people are forced into the cash economy without compensation (even if somebody gets paid off, it isn't the dispossessed).

As for the money - again, that only helps if they get it and it isn't merely fiat currency printed without matching inflows of goods and services. If it's the latter, what happens is that people get their benefits inflated away from them, and those last in the trickle down end up losers; without real inflows (including staples), there isn't any increase in production but only transfers, shifting food from mouth to mouth.

Unless declines in food production are more than offset by imports and distribution, people end up worse off. At least sweatshops aren't as bad in this respect as cash crops for export, but even so there is still no guarantee. It's just that the real losers aren't the new workers but the marginalised right at the bottom of the heap.

"As poor nations increase in income they also become more democratic." So what? Democracy isn't a good in itself, but it only helps if it can be used to secure what people want. But the price was already paid, and they already lost that freedom of action by allowing the outsiders to buy their way in.

And for what it's worth, that increase in formal democracy is a mere coincidence, driven by adhering to current international fashion and not to the increases in the cash nexus.

"I am also curious about the connection betwen the land expropriation and the building of the factories. All the article seems to claim is a loose connection, and assumes that if the people had land they wouldn't work in factories. That seems like a rather large assumption."

It's no assumption, but can be backed by observation. For instance the locals on Lewis had other alternatives when Lord Lever built a fish processing plant at Leverburgh to bring industry to the Hebrides; they stayed away in droves, despite his philanthropy.

April 25, 2006 12:38 AM  
Blogger Kevin Carson said...

Sheldon,

Well, I didn't notice the Van Eeghen article on the corporation until you linked to it, so I guess we're even.

Bob,

To get back to the Harry Browne thing, it's kind of like breaking somebody's legs and saying "if I didn't give him these crutches, he couldn't walk."

Mike,

PML anticipated most of my response. On the connection between exploitative wage labor and land expropriation, the ruling classes directly involved in such expropriations have certainly tended to see a linkage. For example, there is an abundance of commentary by the landowning classes during the enclosures arguing that they were necessary because it would be impossible to get people to work hard enough or for an acceptably low wage if they had independent access to the means of production.

Dain,

I'm not really interested in legislation, except in the negative sense of ending collusive ties between the U.S. national security states and foreign anti-labor regimes, and U.S. interventions overseas to protect the interests of Western capital. What I would like to see is a U.S. labor movement less concerned with protectionism and less prone to see foreign labor as an enemy, and MORE interested in making common cause with foreign labor. For example, an outreach effort to encourage Wob-style "direct action on the job" in Burma, Indonesia, China, etc., might be just the ticket.

On the democracy thing, the kind of "democracy" that is currently proliferating is the neocon version of spectator democracy: governance by professionalized elites, with a periodic ritual of selecting between competing slates of candidates who probably agree on 75% of the issues. A society organized around REAL democracy--the direct, decentralized, bottom-up kind--would probably be classified as a terror state by the U.S.

April 25, 2006 10:35 AM  
Blogger Sheldon Richman said...

This comment has been removed by a blog administrator.

April 25, 2006 2:45 PM  
Blogger colorless green ideas said...

the question "could an entity corporation exist voluntarily in a free market?" is an interesting theoretical question, but i think the more interesting question is, has such an arrangement ever occured or been attempted in history, if so, was it effective, and if not, why not?

i hasn't always been simple to obtain a government issued corporate charter; originally they were only issued temporarily for building "public goods" such as bridges, and roads. the key point is that corporations were seen as a highly useful tool for collectivizing capital, and encouraging "efficient" economic growth. in that environment, where it was hard, or even impossible to get a corporate charter, why weren't people voluntarily creating that "nexus of contracts" for their business activities? (were they? i'd love to know)

i personally don't believe it would be possible. perhaps a similar entity could be created through a mass of contracts, but even if it could, business operations would be so bogged down by additional contracts with each new customers/client as to be rendered economically ineffective. that's not my main point, though, i'm really more interested in the former question i asked above.

April 25, 2006 3:06 PM  
Blogger Sheldon Richman said...

I planned to write an article based on Hellmer's JLS paper. But when checking her sources (The Economist and Amnesty International) I find no substantiation of her claim that "the military regime of Burma abducts its own citizens and forces them to work in factories owned by multinational corporations." I find many references to people being forced to work on road and military construction and on military farms (which is a horrible but different story) and oppression of political opposition, but not forced labor for multinationals in factories. Hellmer's references do not mention this. If it actually happens, I'd expect Amnesty to cover it and I'd expect to find material via Google. I find none. I have written the Free Burma Coalition to see what they know.

If someone has better information on this, please let me know.

April 25, 2006 3:19 PM  
Blogger Sheldon Richman said...

This comment has been removed by a blog administrator.

April 27, 2006 12:09 PM  
Blogger Sheldon Richman said...

The founder of the Free Burma Coalition tells me there has been no allegation and no known instances of forced labor in a multinational corporation factory. I plan a detailed post at Free Association (www.sheldonrichman.com).

April 27, 2006 12:11 PM  
Blogger Kevin Carson said...

Thanks for checking, Sheldon. I'll post a disclaimer on the main page of my blog.

April 27, 2006 8:49 PM  
Blogger Sheldon Richman said...

The promised post is now up at Free Association (www.sheldonrichman.com).

April 28, 2006 7:52 AM  
Anonymous P.M.Lawrence said...

I'm posting here partly to tell people that I have followed up with a reply at Sheldon Richman's further work on his blog, and partly to enlarge on what KC and I already wrote here.

Mike, there is no necessary and inherent connection between building sweatshops and land losses, the way there is when land gets diverted to cash crop production. However, if there are land losses - which there are - it raises the question of whether they were in part driven by wanting to force people into the factories.

This is often the case, but KC has misread what happened in the Industrial Revolution in, say, Britain. There, the comments expressed in Parliament and so on about making the workers work harder were made by people wearing their class interest hats. However at the individual land owner level this didn't often happen (though it sometimes did).

What happened in Britain was that there were two wealthy groups, the land owners and the merchants/factory owners, with only some overlap. They had different interests. At first the landowners drove peasants off to get more profitable land use for sheep, around the 16th century, getting money by exporting wool.

A mercantile group grew up in England, processing it and adding value within the country, favoured by the state as it increased the local tax base at foreigners' expense. Later phases of enclosure were to reduce costs rather than to increase gross profits, with the displaced going into slum conditions.

If that next-best option had not been there, cheaper production would have been faced with declining demand since the poor would not have been able to buy food even by working in factories.

But, any one land owner gained little by creating a new town dweller since the dispossessed might go to any work and not just his own factories (or might even emigrate in a coffin ship). The gain spilled over onto others, members of the commercial group, and was spread thin in the spill over. Factory owners, like workers, wanted the Repeal of the Corn Laws to make life easier for them - a conflict between the two wealthy groups.

When that came, the newly exporting countries suffered as Les Miserables as their own workers found staple prices increasing. That led to a new wave of passing the buck as those industrialised further and imported from yet other countries, until Russia and the USA at the end of the line had surplus land; they could export food without causing local suffering, until Malthusian limits loomed (as they did a century ago, only to be pushed back by fertiliser and more farm mechanisation allowing poorer land to be worked cost effectively).

In the same way, confining natives to limited land in colonies wasn't in the first instance in order to make them work; that came in later, increasing the dispossession along with other measures to produce that effect. The first reasons were partly to make it easier to control them - the concentration camp or reconcentrado reason - and to provide not labour but land for newcomers.

Only once they had underworked land did they need more labour. In fact, new world crops like cassava and maize meant that the natives did not in fact need as much land anyway - at first (which doesn't mean that they didn't lose, just that their loss wasn't as harmful - at first).

May 05, 2006 5:59 AM  

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