Bryan Caplan  

Reply to Yoram

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As promised, here's my reply to Yoram Bauman's guest post.  Yoram's in quotes, I'm not:

1) What did you think of the page on public choice (p82)? Buchanan got his own Nobel Prize joke, and I thought that was pretty good!

One page on public choice is definitely better than zero.  But you still seem to treat public choice as an afterthought.  Take a look at the last panel on p.82.  The text box reads: "[Buchanan's] work on public choice theory cautions that government action might increase inequality rather than reduce it."  The panel shows a politician (Saddam Hussein?) saying, "I want to help the poor people of my country... starting with all of my poor friends."  This makes poor-to-rich redistribution seem like an aberration, found primarily in the Third World.  But poor-to-rich redistribution is the essence of the immigration restrictions ruthlessly imposed by every First World democracy.

I'd add that public choice has grown a lot since Buchanan.  Now it's more focused on the many inefficient policies that win by popular demand, rather than the corrupting influence of special interests on the noble democratic process.  Imagine how different chapter 15 ("The End of Youth?") would have been if you'd emphasized the absurdity of giving all elderly citizens tons of free stuff.

2) Regarding Chapter 9 ("Complications"), you write that it "bends over backwards to consider objections to free trade, but ultimately grants them very little." Do you really see it as that simple? When you read articles about foreign countries and child labor or unsafe working conditions or human rights or environmental pollution, do you just shrug and say (as the character does on p112) "as long as we can buy bread from them cheap, who cares?!"

I don't shrug.  But I find the arguments you make on pp.116-123 about "exploitation by choice" extremely convincing.  Sweatshops and the like are the best available option for people in the Third World.  Their living and working conditions are bad because they're poor.  Refusing to trade with them just makes their poverty worse. 

I hasten to add that First World immigration restrictions are a major cause of Third World poverty - and a massive human rights violation.  If we feel sorry for the world's poor, we can make a huge difference with more free trade in labor rather than less free trade in goods.

3) #2 above also makes me curious about your take on the history of labor laws in the USA. When you read about, say, the 1911 Triangle Fire, do you really just get a hop in your step from thinking about the joys of an unregulated market? If you could go back in time and eliminate laws in the U.S. about child labor and workplace safety &etc, would you?

When I read about things like the 1911 Triangle Fire, I think, "How sad that people used to be so poor that high-risk jobs were their best option."  It's basic micro: If workers valued better working conditions at more than their cost, employers would be happy to reduce their pay and improve their working conditions.

Much the same goes for (harsh) child labor.  It's sad that some parents are so poor that they can't give their kids a decent childhood.  But banning child labor doesn't make those families any less poor. 

I'd add that people in the First World have an irrational horror of the very idea of child labor.  Yes, kids endure some horrible jobs.  But kids also endure some horrible schools.  We should focus on typical job and school experiences, not living nightmares.  There's no reason why kids, poor and rich alike, shouldn't be allowed - indeed encouraged - to enter the labor market part-time to earn their own money and gain valuable work experience.

Happy holidays, Yoram!


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COMMENTS (9 to date)
andy writes:

If workers valued better working conditions at more than their cost, employers would be happy to reduce their pay and improve their working conditions.

Or, alternatively, the employer is very unlikely to ban employees activities to improve working conditions.

Ian writes:

I agree with Bryan that there are a lot of jobs kids could and should be encouraged to have that would better prepare them for life in the labor market than school.

But even if you were to assume that it is inherently bad to have children working, that is a very strong argument for freer immigration.

It is commonly thought that people used to have a lot of kids in order to help them work on the farm, or even to potentially send them into the workforce to help supplement the family's income. The problem with this idea is that children are incredibly unproductive, even compared to uneducated adults, hence why they have always been paid so poorly. The only way a child would be adding a net gain to a family's finances would be if you could separate him from his family and he would be self-sufficient worker. This is never the case.

If workers in poorer countries were allowed to emigrate to richer countries where higher tech manufacturing produces the same amount of goods with fewer (but higher paid) workers, they would pay to keep their children at home and in school until they were more productive, like we do.

Alex J. writes:

andy,

By "ban" do you mean ban in the workplace or cause the government to make illegal? If the former, there's a market for employers as well as employees. If the later, well, you're with Bryan.

Mark writes:

Yoram says:
"If you could go back in time and eliminate laws in the U.S. about child labor and workplace safety &etc, would you?"

First, the answer is yes. It is not the poor who desire and demand restrictions on their children working; they need it. It is the wealthier families who limit the ability of poor families to create value and take care of themselves. As Bryan notes, it is sad that some people have very limited skills that they cannot create enough value for themselves and for others to maintain some standard of living for themselves and their children. This means that their children have to work. It's where the majority of families in this country were as recently as a hundred to one-hundred and fifty years ago. How would we have responded if the British imposed labor restrictions two-hundred and fifty years ago under the guise of "caring for our children"?

Second, I believe it deplorable that Yoram advocates child prostitution and engaging in other illicit behavior. Without legitimate opportunities to earn money for their families, children whose parents have very few skills would have to find some other means of making money. I've seen it first-hand.

Seth writes:

"But banning child labor doesn't make those families any less poor."

Good point. Nor does it actually ban child labor, at least in my case. I worked as a child, off the books. I learned a lot and I was proud to have a job and my own income.

I know others who did the same.

And while I appreciated those experiences, I was even more excited when I was old enough to get an on-the-books job.

Yoram Bauman writes:

Thanks for this thoughtful reply, Bryan. I don't always agree with you, but I do learn from you!

PS. You didn't directly answer the question in #3 ("If you could go back in time and eliminate laws in the U.S. about child labor and workplace safety &etc, would you?") but it looks like your answer is Yes... yes?

PPS. If you're looking for another post topic, you could try to mediate between me and Steve Landsburg. (I've given up on him for now :)

Mark writes:

Some kids know from an early age what they want to do. And other than fall into drug dealing and becoming a hit-man, who am I to impede their desired path.

One major problem with income inequality in this country is there is very little on-the-job training (i.e., apprenticeships, internships, etc.) available to younger people, mostly because either they cannot get the job or the restrictions are so great it's too costly for a prospective employer to work with them.

If, which I believe is true, we already spend too much on education in the US (both secondary and post-secondary education), creating other alternatives makes these kids and society better off, not worse off. Why impede their abilities to find gainful employment at age 12 to 14 and avoid the educational system that is to them total misery and waste of their time.

Here is one such story. And although the parents and restaurant were able to work around the system, it was only through sheer determination on the part of all parties and it cost the restauranteur thousands of dollars.

rpl writes:

Yoram writes:


PS. You didn't directly answer the question in #3 ("If you could go back in time and eliminate laws in the U.S. about child labor and workplace safety &etc, would you?") but it looks like your answer is Yes... yes?

I'm not sure why you think this is such an important question. Suppose Bryan did go back in time and eliminate those laws. Would it have a significant effect on the amount of child labor or level of workplace safety we have today or at any point in the intervening years? I really doubt it.

Child labor laws get the support they need to pass because societal attitudes shift against children working. But the people that make up that society already have the means to stop child labor. They can simply stop sending their children to work and stop hiring children in their businesses. They don't need a law to keep children out of the workplace, and invariably society is well on the way to fixing the problem on its own by the time the law actually passes.

The same goes for workplace safety, environmental regulation, you name it. Folk wisdom credits those laws with fixing the associated problems, but usually the supposed effect precedes the purported cause. The problems were on their way out by the time the law was passed.

So, I kind of fibbed above. In truth, I have a pretty good guess as to why you think question #3 is important. I expect that you see it as forcing Bryan to choose between repudiating his ideological position against regulation and supporting a parade of horrors like child labor, pollution, and so on. As you can see, that is a false dichotomy that arises only because you credit legislation with causing the decline of those horrible practices. In fact, the evidence for that causal relation is quite weak.

Ghost of Christmas Past writes:
I hasten to add that First World immigration restrictions are a major cause of Third World poverty...

That claim is unsupported by the proffered evidence and extremely implausible for other reasons. The link shows only that more-or-less similar workers[1] may earn different wages in different existing countries[2]. It does not show that "First World immigration restrictions" cause "Third World poverty." Think: before you can move a worker from a poor country to a rich one (to alleviate his poverty), you must have poor and rich countries. So today's poor-/rich-country differences must have arisen before rich-country immigration restrictions could make any difference.[3]

Indeed, even a casual tour through the history books will show that (formerly Third World) poor countries like South Korea may become (current First World) rich countries even though few people migrate in or out of them, and during eras (like the 1950's through 1980's) during which then-existing rich-countries discouraged immigration much more than they do now (1990's to present).

One might speculate that rich-country immigration restrictions make other countries poor now even though they never did in the past, but there's no obvious mechanism to produce such an effect. Rich-country immigration rules obviously don't interfere much with the internal economies of poor countries.

I don't think any disinterested analyst could conclude that "First World immigration restrictions" cause "Third World poverty."

[1] I won't quibble over this point.

[2] None of the studies referenced shows that large wage differentials would persist in the face of large migration flows. Indeed, a mainstream analysis would expect migration to diminish wage differentials. Unlimited migration would likely reduce wage differentials to hardly more than the cost of migrating, at which point the erstwhile "rich country" would be populated chiefly by "poor people," after which observers would no longer call that country "rich."

[3] Long ago all countries were "poor" by today's standards. It's a kind of folk-Marxist notion that today's rich countries "caused" other countries to become poor, or prevented them from becoming rich. On the evidence, the Industrial Revolution simply hasn't visited today's poor countries yet--probably because their inhabitants are not well suited to participate in an industrial economy.

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