Sweatshops And The Status Quo

Matt Zwolinski's qualified defense of sweatshops:

Roderick Long opposes sweatshops:

I agree that if protests and boycotts take as their aim simply the closing of sweatshops (or, worse yet, regulations such as minimum-wage laws that force out sweatshops), then they’re a mistake. But what the people protesting sweatshops are demanding is not that the employers fire all their employees and close down the shops; rather, they’re demanding higher wages and better conditions. If a company responds to a boycott, not by improving its sweatshops but by closing them, and the boycotters respond by ending the boycott, then the boycott is being done in a counterproductive way; but that’s a reason for condemning stupid anti-sweatshop boycotts, not for condemning anti-sweatshop boycotts per se.

Zwolinski counters:

[N]o one really comes out and advocates that we just take those jobs away full stop. But they do advocate policies that have the effect of taking those jobs away. And as libertarians, this kind of unintended consequence should hardly be a surprise to us.

Look at what happened to Masango’s friend as a result of minimum wage laws in the video. Or look at some of the studies that Powell and I cite in our paper. Sweatshops, or the MNEs that contract with them, might be able to afford higher wages or better working conditions. (Though I have yet to see any critic of sweatshops produce hard data about the profit margins in sweatshop-employing companies compared with profit-margins elsewhere in the industry). But what they can afford to do is less important than what they will do. And very often, sweatshops and the MNEs that contract with them respond to consumer pressure by shutting down, automating production, or moving elsewhere. And that hurts people who can ill-afford to be hurt.