Exploitation and freedom

Russell Roberts argues that Wal-Mart can’t exploit workers because so many people apply for jobs there. Is this valid, or is it the sort of error that Norm deplores?
To see the problem, imagine a sort of Gulag Archipelago, in which some prison labour camps are more oppressive than others. Prisoners are free to apply to enter particular camps, but not free to leave the archipelago. There will then be thousands of applicants to enter the less onerous camp, and successful applicants will be happy to get there.
But it doesn’t follow that these are not exploited. And their freedom is horribly limited. It‘s a choice amongst oppressive exploiters; the option of leaving the system altogether doesn’t exist, at least for the individual*.
To Marxists, capitalism is like this archipelago. It offers choices of degrees of oppression and therefore some freedom. But the choice that matters most doesn’t exist. In capitalism, workers lack an outside option. 
The question is, are Marxists right? Defenders of capitalism would reject my analogy in two ways:
1. They would define coercion (and hence unfreedom) as only the conscious actions of state agents. Men in the archipelago are coerced. But men in capitalism are not.
2. Under capitalism, the outside option is a natural state of rural idiocy - subsistence farming and poverty.
Marxists reply that point 2 is wrong; outside options should be richer than a state of nature, with various forms of socialism among them.
And, they say, point  1 is a narrow etiolated conception of freedom that drains the notion of value. What’s more, people have often been deprived of an outside choice because state-sanctioned primitive accumulation has robbed them of their land**. As the man said:

Nowhere and at no time has the large scale ownership of land come into being through the workings of economic forces in the market. It is the result of military and political effort. Founded by violence, it has been upheld by violence and that alone.

(That’s not Marx, its von Mises.)
As you know, I side with the Marxists on these points. But that’s not my main point. The point is merely that long queues for jobs at Wal-Mart, or at any factory in the third world, is no proof at all that workers are free and unexploited.
* It’s possible that the prisoners could collectively revolt and overthrow the Gulag system. Does the fact that they don’t do so show tacit consent? This raises issues for another day.
** If you think it relevant that the primitive accumulation described in these links happened under a "Communist" government, you misunderstand Marxism as badly as the Chinese government does.

Comments

[Mark Harrison]

> 2. Under capitalism, the outside option is
> a natural state of rural idiocy -
> subsistence farming and poverty.

> Marxists reply that point 2 is wrong;
> outside options should be richer than
> a state of nature, with various forms
> of socialism among them.

Devil's advocate mode on :-)

If the Gulag is so oppressive, can you explain why so many people are trying to break into it from outside?

Devil's advocate mode off :-)

Counter-argument, I guess, is the number of people trying to move from, say, the US or the UK to Canada - or from an extreme market forces economy to a relatively more statist one.

Personally, I'm broadly in favour of MUCH higher global mobility... but I realise I'm in a minority here. The protectionists seem to have the upper hand.

[ortega]

'Defenders of capitalism...'

As opposed to what ?

[Gerard O'Neill]

What if it's the other way round Chris? That the workers are exploiting Walmart? It's like this: Walmart (and other low paying employers with high staff turnover) is merely a launchpad for every young, first time jobber waiting for something 'better' once they complete their education; for every immigrant waiting for something better once their English improves; and for every welfare recipient wanting something for the CV that'll get them the better job as the economy expands.

In other words, the implicit contract between the 'Walmarts' and the 'workers' is that the former pays relatively less because the latter's productivity is relatively low; but once the latter's productivity improves then they terminate the contract.

I don't have the statistics, but I suspect that many times more workers terminate their employment with Walmart than have it terminated by Walmart. So whose 'exploiting' whom - and who has the greater freedom? In a free labour market (in a free, democratic society) the balance of contractual power is effectively with the workers. Assuming the economy and the labour force is expanding, of course.

And unfortunately (for those less than enamoured with it), capitalism is the best means for delivering economic and labour force expansion ...

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"The point is merely that long queues for jobs at Wal-Mart, or at any factory in the third world, is no proof at all that workers are free and unexploited."

It strikes me as being pretty good evidence that people are better off with the opportunity to work at Wal-Mart or third world factories than without. Anyone trying to get rid of those factories is campaigning to reduce the options open to their workers. That is a strange way to free anyone.

"But the choice that matters most doesn’t exist. In capitalism, workers lack an outside option."

But it is perfectly possible to set up communes etc that are as internally socialistic as you could wish. It has been done. The reason that there are so few of them is that hardly anyone wants to live in them. Look at the kibbutzim, for an example.

[James D. Miller]

By your logic you have to admit that the existence of Wal-Mart reduces the exploitation of workers. So exploitation-wise Wal-Mart is a force for good.

[Blissex]

«What if it's the other way round Chris? That the workers are
exploiting Walmart?»

Well, if you follow a certain logic, it is pretty clear that
lazy and parasitic minimum wage workers are exploiting Wal*Mart,
while hard working, productive executives are being exploited.

The evidence is damning:if there are hundreds of thousands of
immigrants to the USA greedily eyeing those fabulous Wal*Mart
jobs, and wages are constant or sliding down, that means that
the market has not cleared yet in either quantity or price.

That means that existing workers in the USA are extracting a
parasitic rent from their employers, as their wages and work
conditions are obviously above the free market clearing point.

Minimum wage workers also often keep working even if ill and
old, a clear sign that their working conditions and pay are so
good that many seniors are enticed to come out of retirement and
exploit Wal*Mart by working there as greeters.

Conversely, it is always difficult and increasingly expensive to
hire executives, and that means that there the market for
executives is off the market clearing price to their disadvantage.

The result is that executives are working much harder and are
paid a lot less than what they are entitled to by their enormous
productivity (which as Economics teaches has been mathematically
proven to be the sole factor in setting incomes), which is
demonstrated by the numbers of executives that retire early on
their unfairly small savings, as they clearly cannot bear
another day of being brutally taken advantage of in their corner
offices.

Or perhaps it is the case that Russell Roberts is nothing more
than a shystering sophist, implying a meaning of "exploited"
which has been been artfully corrupted.

Because exploitation is not either/or, and there are degrees of
exploitation (or brutality as in the Gulag example above), and
some desperation and exploitation at Wal*mart is preferable to
an even worse situation in Mexico.

[Blissex]

«By your logic you have to admit that the existence of Wal-Mart reduces the exploitation of workers.»

Another splendid example of shystering sophistry: "reduces the exploitation of workers" is not the same, even if looks the same, as "reduces the exploitation of *all*/*most* workers".

Because while Wal*Mart reduces the exploitation of the minority of Wal*Mart workers that come from an even more desperate background, the resulting downward pressure on wages increases the exploitation (if any...) of those workers that are not immigrants (for example executives).

The result is that overall workers lose and Wal*Mart gains.

«So exploitation-wise Wal-Mart is a force for good.»

Another example of shystering sophism: the confusion of "good" with ''lesser evil for a minority''.

This considering Wal*Mart employees only.

The overall effect of immigration from a poor country to a rich one is however beneficial, assuming that welfare is sublinear in income, so that the losses in income for the target country workers matter less than the much bigger gains to the immigrants, even if overall the biggest gains are for employers in the target country.

But the argument was about exploitation _at Wal*mart_.

[Nick Cohen]

Actually, Chris, you don't have to imagine it. Before he wrote the Gulag, Solzhenitsyn wrote The First Circle about a prison camp for scientists whose research Stalin needed. They were given good food and comfortable cells, but were still, of course, in prison.
The title comes from Dante's first circle of hell where the philosophers of Greece lived in a walled green garden. They were great men, but because they were also pagans they couldn't be allowed into heaven.

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"Because while Wal*Mart reduces the exploitation of the minority of Wal*Mart workers that come from an even more desperate background..."

Blissex, all Wal-Mart workers must have come from a more desperate background. Otherwise they would not have taken jobs at Wal-Mart.

[Joe Otten]

OK so what we're getting here is that Walmart workers are not exploited by Walmart, but they might still be exploited by capitalism, or by primitive accumulation.

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But not by any actual capitalist, because the same argument about Wal-Mart applies to any other employer.

Which leads to the obvious question: How can the capitalists be exploiting the workers, if no capitalist can exploit any worker?

[MDM]

Chris,
Thought you might be interested in an attempt to show, on libertarian grounds, how our current market system can still be pervasively exploitative to workers (and consumers, etc.)

http://upaya.blogspot.com/
Cheers