A few months ago, the New York Times ran this story about the exploitation of day laborers.  According to the study, day laborers are subjected to a variety of harms – their employers fail to pay them the promised amount, violate worker safety laws, and subject day laborers to dangerous conditions.  Those on the left point to this kind of exploitation as an issue of social justice – one that should be addressed by increased legislation to protect immigrants’ rights.  How should a classical liberal who takes social justice seriously respond?

The normal tendency of classical liberals is to recoil upon hearing the term “exploitation,” especially when its invocation is tied the demand for increased powers for the government.  At least since the time of Marx, talk of “exploitation” has mainly been the domain of the political left, especially in critique of the relationship between capital and labor.

But it would be a rhetorical and philosophical mistake for classical liberals to concede this concept to the left.  Marx was wrong to think that capitalism is inherently exploitative, a mistake grounded in both a theoretical error about the nature of value and various empirical errors about the nature of a market economy.  But this does not mean that there is no such thing as exploitation, nor that exploitation is not a serious moral wrong, nor even that capitalism as it exists today is not very often wrongfully exploitative.

Most philosophers agree that exploitation should be understood as taking advantage of another person in a way that is unfair or degrading, although there is ample disagreement about how precisely those last key terms ought to be characterized.  Typically, exploitation involves a person in a position of power interacting with a person in a position of vulnerability, and using that power differential to benefit himself at the expense of his victim.

The first point I want to make is that there is nothing in the idea of exploitation as such that isincompatible with a classical liberal understanding of political morality.  Indeed, the classical liberal tradition has a rich tradition of concern for reducing exploitation.  Employers who use their social, economic, and political power to deprive workers of promised wages are acting in a way that classical liberals should not hesitate to condemn as wrongfully exploitative.

Classical liberals can and should, however, take pain to distinguish between two forms of exploitation: exploitation that is mutually beneficial, and exploitation that is harmful.  Both involve someone taking unfair advantage of another.  But in one case, both parties come away from the transaction better off than they would have been without it.  In the other, the exploiting party comes away with more, the exploited with less.

An exchange can be mutually beneficial and yet unfair or degrading.  If you are drowning in a lake, and I row by on the only canoe in sight, it is morally wrong of me to make my rescue of you contingent upon your signing over the deed to your house.  Granted, you would be better off taking my deal than passing it up.  But it’s wrong for me to offer it nevertheless.  I should – and I suspect most of you would – perform the rescue for free.

All else being equal, it is a good thing for governments to prohibit harmful exploitation – at least when the unfairness rises to a high enough level that we regard it as a violation of the victim’s rights.  Taking someone’s labor without giving them the money you promised them is such a case.  It is harmful, and seriously so – they come away worse off (sans their labor and their wages), you come away better off.  Laws that prohibit this protect the vulnerable and are a value tool in the promotion of social justice.

Things are not so clear with mutually beneficial exploitation.  And much of the exploitation that concerns us in cases of migrant or sweatshop labor is exploitation of a mutually beneficial sort.  They are cases in which workers voluntarilly and without misinformation choose to enter into an employment relationship even though the working conditions are unsafe, the hours are long, and the pay is low.  They enter into these employment relationships because, for many of them, the likely alternatives are much, much worse.

We can grant that even exploitation of a mutually beneficial sort is a serious moral wrong, but it simply does not necessarily follow from this that it is something that governments ought to prohibit it.   Think of it this way.  If you were the one drowning in the lake, and there was a third party nearby with the power to either allow me to rescue you (at the price of your house) or to disallow it, wouldn’t you want him to allow it?  Perhaps prohibiting exploitative transactions will lead would-be exploiters to offer mutually beneficial deals on fairer terms.  But, as is illustrated in the case of sweatshop labor, there is reason to worry that prohibiting exploitation by, say, mandating safety improvements or a higher minimum wage, will make the package sufficiently unattractive to would-be exploiters that they wind up prefering to make no offer at all. Classical liberals thus have good reason for legally tolerating mutually beneficial exploitation, even if they judge it to be a serious moral wrong.  One does not express a proper concern for the vulnerable by taking away what might be the best alternative they have for improving their lives.

One complication.  I’ve argued that mutually beneficial exploitation is often something legal regimes should tolerate, and this point counts in favor of the classical liberal vision of the state and against the recommendations often made by those on the left.  But whether a transaction counts as “harmful” or “mutually beneficial” depends on what we take as the baseline – a mugger who threatens to shoot you but then offers you the chance to live if you hand over your wallet is proposing a deal that is mutually beneficial relative to the baseline in which he simply shoots you, but harmful relative to the baseline in which you get to keep both your money and your life.

One point that those on the left have often made, and which classical liberals ought to take much more seriously, is that capitalist systems as they actually exist (and not merely as they are envisioned in our utopian dreams) have often rigged the baseline to the detriment of labor and to the advantage of capital.  It will not do to argue that transactions in a free market are always mutually beneficial and therefore non-exploitative.  Sweatshop labor might indeed be a worker’s best option given that the state has worked to forcibly suppress labor unions, has engaged in the massive and illegitimate seizure of land, and has closed off innumerable employment options through protectionist policies.  But the fact that sweatshop labor is mutually beneficial in that sense is compatible with the claim, made from a broader structural perspective, that the worker is being harmed.  In a corporatist world, relationships between capital and labor may often be exploitive, even if it is not so clear that it is the  individual capitalist who bears the primary guilt of exploitation. I will have more to say about exploitation and the state in a later post.