Peegee

[url]http://speaklibertynow.com/2013/03/20/defense-child-labour/[/url]

Nowadays, the idea of child labour is viewed as an abhorrent relic of a bygone era – one of an unregulated, free market, dangerous factory environment, where children suffered at the hands of slave drivers. We look at countries lacking the same amenities we enjoy, particularly those still employing child labour, with shock. Surely such lifestyles need not persist today! And so we pressure those countries into banning child labour. What can this act of kindness bring?

It is perhaps necessary to scrutinize the dawn of the industrial era more closely. Something is missing, and Murray Rothbard gives some insight. Along with further insight, these words will illustrate the predicament in which we find society.

Prior to the industrial revolution, the capital available to society was severely limited. Many necessities were produced locally, and trade was hampered by transportation options. What we take for granted nowadays is often forgotten when reviewing history: the industrial revolution allowed society to vastly increase its capital acquisition.

As historian Joel Mokyr puts it, “The years 1760-1815 witnessed more than just some lucky breaks in a handful of industries: it was also the period in which people defied gravity through hot-air balloons, began the conquest of smallpox, learned to can food, to use binary codes for manufacturing purposes, to infer geological strata from fossil evidence, and to burn gas for lighting” [1]

It should not be understated that child labour is largely a stressful economic system for society. During a person’s initial formative period, the ideal is to pursue educational or social experience in a carefree environment, not to spend it toiling in hard labour. However, that is precisely what such an expectation is: ideal. Our current practice of permitting children access to full time education from age four to twenty-one (and sometimes over) is a product of our current level of economic success. At the dawn of the industrial revolution, the vast majority of Western society was living in squalor – as capitalism requires a period of deferred consumption in order to save for investments before leisure can be enjoyed. Without savings, we must forage for necessities – food, shelter, warmth. A lack of technology limits our productivity. It is as Peter Schiff explains in the first chapter of How an Economy Grows and Why it Crashes

However, the industrial revolution brought with it prosperity, and society had actually heralded its coming. Murray Rothbard writes, “Capitalism took the outcasts of society: the beggars, the highwaymen, the rural over-populated, the Irish immigrants, and gave them the jobs and wages which moved them from destitution to a far higher standard of living and of work. It is easy enough to wring one’s hands at the child labor in the new British factories; it is, apparently, even easier to forget what the child population of rural England was doing before the Industrial Revolution—and during the Revolution, in those numerous areas of England where the I.R. and the new capitalism had not yet penetrated: these children were dying like flies, and living in infinitely more miserable conditions. This is why we read nowadays, when it seems inexplicable to us, British and American writings of the period which praise the new factories for giving work to women and children!” [2]

The disparity in investment and responsibility are often neglected when discussing waged labour. Entrepreneurs invest a great deal of capital in a particularly risky environment. The free market cares nothing for one’s preference or circumstance – it cares only for what it values, and it rewards those it values handsomely, and ruthlessly smites those that fail. A wage earner is paid in advance of sale for time and labour, and the entrepreneur is paid only if profit is gained at the time of sale. Wages are also a secure means of revenue – recurring wages permit long term planning and have the benefit of stability. An entrepreneur has no such guarantee of stability.

What happens when we enforce child labour laws in today’s less economically successful countries? Firstly, such individuals find themselves more-or-less in the same situation as those who bore witness to the dawn of the industrial revolution: their countries are only starting to catch up. Children need to be fed, and there are too many children for the adults to properly care for. A society that lacks child labour is a privileged one – one that has earned such a carefree childhood through years of profitable investment from the generations before. Without the ability to procure savings, each mouth to feed adds to the workload of the adults. The end result is an economic pressure to find employment by any means necessary. UNICEF found that even the threat of boycotting child-labour-produced goods caused factories in Bangladesh [3] to dismiss their children from work, leading to child employment in other, unsafe work conditions, including sometimes prostitution.

Often, the solutions suggested involve foreign aid, or simply subsidizing impoverished countries. This often has entirely ineffectual results. Ron Paul once said of foreign aid, “Foreign aid is taking money from poor people in rich countries and giving it to rich people in poor countries.” This is not to be understood to mean that the poor in rich countries like USA pay taxes that go to poorer countries – the majority of taxes in USA are paid by the top 10%. What Ron Paul means, rightly, is that federal taxes that pay for foreign aid end up inflating the money supply and devaluing the dollar. The poor in America suffer because of this. And truly, the foreign aid goes to the ruling elite in poorer countries. This effectively disenfranchises the poor in those countries, as they continue to be prevented from earning increasing wages, and the ruling elite are now motivated to curry the favour of the countries that provide foreign aid.

In order to allow citizens from poorer nations to be afforded a chance to save and to improve their position, what we should do is allow those countries to supply cheaply produced goods, and to divert the saved capital into other markets, thus allowing us freedom from producing the same goods locally for much higher production costs (our minimum wage is not helping). This advice seems counter-intuitive, but we have been bamboozled by years of economic mistruths told by industry leaders through mercantilist economic policies that help not the consumer or the country’s economic health, but their own pockets.

[1] [URL="http://www.deirdremccloskey.org/articles/floud.php"]Review of The Cambridge Economic History of Modern Britain[/URL]

[2] [URL="http://www.mises.org/daily/1607"]Down With Primitivism: A Thorough Critique of Polanyi[/URL]

[3] [URL="http://www.unicef.org/sowc97/download/sow1of2.pdf"]The State of the World’s Children 1997[/URL] pp 23