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Thursday, April 25, 2013

We can choose that workers not die in horrific mass accidents

by David Atkins

Matt Yglesias caused a lot of justified moral outrage yesterday when he suggested that weak Bangladeshi regulations leading to mass deaths were economically justifiable in the open labor marketplace. The argument goes that Bangladeshis make a calculated choice to take dangerous jobs, similar to those who drive trucks on ice or fish in stormy seas:

The reason is that while having a safe job is good, money is also good. Jobs that are unusually dangerous—in the contemporary United States that's primarily fishing, logging, and trucking—pay a premium over other working-class occupations precisely because people are reluctant to risk death or maiming at work. And in a free society it's good that different people are able to make different choices on the risk–reward spectrum...

Bangladesh is a lot poorer than the United States, and there are very good reasons for Bangladeshi people to make different choices in this regard than Americans. That's true whether you're talking about an individual calculus or a collective calculus. Safety rules that are appropriate for the United States would be unnecessarily immiserating in much poorer Bangladesh.
The gut instinct here is to deliver a rant full of righteous anger about the nature of global capitalism, the devaluation of life in developing countries, and the injustice of cheap Bangladeshi labor going to create cut denim that sells for $300 in developed countries while investors in garment companies drink champagne off the difference. But the problem with Yglesias' argument isn't so much that it's morally craven or drawn from a position of comfort and first-world privilege. The bigger problem is that it shows the horrific extent to which rational actor theory has corrupted economic thought.

In order for conservative economics to work, it must be assumed that everyone has an abundance of choices as well as the information needed to make the proper choice. In the conservative worldview, businesses will automatically move in to fill every need in the marketplace at the highest price they can extract; consumers will carefully choose from among the products on offer, buying the best products offered for the lowest price; employees will find the companies that deliver them the best payment package and quality of life according to their skills sets; and companies will hire the best workers they can at the lowest wages they can.

All of this is supposed to be a beautiful system of free choice in which every product, service, and employee achieves its perfect value on the market, and in which every employee, consumer and business is free to make the choice that best befits their lifestyle and comfort with risk. If government simply steps out of the way and ceases to create "distortions" in the market, everything will be perfect. There will be no inflation, and any misery or failure will be solely attributable to the poor choices of those who are suffering.

There are, of course, innumerable problems with this worldview: not everyone has access to the information needed to make good choices; the amount of time needed to acquire said information is a time and energy cost that makes it not worth attaining; many people can be compelled or deceived into making poor "choices"; prejudice and other social ills can create inequities that betray market meritocracy; the global supply chain makes it difficult for consumers to know whom to punish when things go wrong; the rational actor system is unable to solve long-term problems like climate change for which consumer punishment is wholly inadequate; systems of taxpayer-funded services such as firefighters, roads and street lights would either cease to function, or only function in wealthy areas; and so on.

But the biggest problem with this worldview is the failure to recognize that human life and dignity are drearily cheap on the open market. Absent laws to prevent such exploitation, the open market looks like Dickensian England: abundant child labor, eighty hour work weeks, mass immiseration, horrific discrimination, and a host of other evils. It turns out that consumers don't much care how a product was made so long as it works, and businesses are more than happy to institute revolting practices in order to create even more decadent wealth for owners and investors. Contrary to social conservative claims, there is no amount of religious fervor or charitable giving that even makes a dent in the horror of purely market-driven economics.

Which leads to the other great failure of rational actor theory in libertarian economics: the artificial separation of government and the governed in a democratic society. At least in representative democracies, the government exists as a mutual compact of citizens who choose to prevent the ills and excesses of the coldhearted markets by funding a protective system of checks and balances, social programs, guaranteed infrastructure, worker protections, product regulations, and a host of other goods and services that reduce the ability of the powerful to exploit the powerless on the open market. The choice to pay taxes to regulate meat companies so that consumers don't have to do the research and take on the purchase risk of which companies' hamburgers might be tainted, is just as equally valid a decision as the choice between going to Burger King or McDonalds.

What does all this have to do with Bangladesh? Everything. No Bangladeshi chooses to work in a dangerous factory at risk of implosion. They do so because they have little other choice, and because profit-driven companies are more than happy to exploit them while charging top dollar for the products they create so cheaply. Certainly, in theory that is a risk that Bangladesh and its citizens may take because if they instituted stronger wages and labor protections, the sociopathic corporations that hire desperate overseas labor would simply move on to the next country. That's the rational actor theory at work.

But in theory we as citizens of the world can also choose to not allow those corporations to engage in recklessly criminal behavior anywhere in the world. We can choose as human beings living on planet earth to create a networked system of global checks and balances that can tell Nike and Levi's that they will, in fact, not be taking as much excess profit on their preposterously overpriced products as they have been accustomed to do because we won't allow them by treaty to pay workers less than a living wage or work them in dangerous conditions. They won't be able to pass on the extra costs to consumers because there's only so much the developed world will pay for a pair of jeans or sneakers. If that causes shares of Nike or Levi's to fall on Wall Street, then so be it. It's not as if record profits and high stock values were redounding to the benefit of workers or consumers in either the developed or developing world, anyway.

Nor is there any reason to suggest that our choices as activists and world citizens to constrain corporations in this way are any less valid than the choice of corporations to force workers into dangerous conditions, or of workers to accept those conditions. In fact, there is every argument to be made that if any rational choice is to be respected, it should be that of the world's democratic citizens coming together to institute mutually agreed-upon policies that serve to benefit everyone except those who would profit off the misery and death of others. That, indeed, is the most beautiful rational choice of all.