Sunday, December 09, 2007

Suppose, for a moment, that you are a white farmer of solid means in the antebellum south. You have a neighbor who treats all of his slaves mercilessly, requiring them to work 16 hour days, and feeding them only one meal a day. You feel the need to do something that will, if not fix, then at least alleviate the cruelty you are witnessing.

Your solution: you take a loan and buy the slaves from your neighbor. You figure that if you force them to work 14 hours a day, and feed them breakfast in addition to their one meal, you will earn enough money to repay the loan - indeed you might even make a small profit. So this is what you end up doing.

A happy ending? Everybody is better off, after all; you are making a small profit, whereas the slaves are in a marginally better position. An economist would call that a Pareto-improvement.

Most people would not agree. We have a strong moral intuition that tells us that engaging in exploitation and slavery are wrong, regardless of the circumstances. I'm going to take it as a given that there are certain moral absolutes, and that slavery is one of them.

There is one area of public discourse where the argument of the slaveholder gets offered again and again in slight disguise. This is free trade; one hears that we are only improving the situation by agreeing to purchase products from nations where sweatshops and child labor are prevalent. After all, people are choosing to work in the sweatshops, so they must be better off working in a sweatshop than the other options available to them.

Paul Krugman wrote a decade ago
Why does the image of an Indonesian sewing sneakers for 60 cents an hour evoke so much more feeling than the image of another Indonesian earning the equivalent of 30 cents an hour trying to feed his family on a tiny plot of land...?
and here is Clive Crook writing in the Atlantic Monthly
It is very hard to maintain that (a) trade is good for us in the aggregate and (b) it makes sense to go slow on trade liberalization. If you are going to argue (b), before long you will find yourself failing to mention (a).

Crook - who is a columnist for the Financial Times - was prompted to write the above by Hillary Clinton's recent statement
...what I have called for is a time-out which is really a review of existing trade agreements and where they are benefiting our workers and our economy and where the provision should be strengthened to benefit the rising standards of living across the world...I’m trying to take the trade agreements that [Bush] has negotiated each one on its merits - and I will support the Peru agreements because it has the kind of strong labor and environmental provisions that I’ve long called for...
for which she has been criticized by various free trade supporters. On the other hand, to me Clinton's statements have been like a breath of fresh air. Most American politicians fall either into the free trade radical or the protectionist camp. Its nice to have a candidate who has a level-headed approach to trade issues.