The Foundation for Economic Education (FEE) is proud to partner with Young America’s Foundation (YAF) to produce “Clichés of Progressivism,” a series of insightful commentaries covering topics of free enterprise, income inequality, and limited government.

Our society is inundated with half-truths and misconceptions about the economy in general and free enterprise in particular. The “Clichés of Progressivism” series is meant to equip students with the arguments necessary to inform debate and correct the record where bias and errors abound.

The antecedents to this collection are two classic FEE publications that YAF helped distribute in the past: Clichés of Politics, published in 1994, and the more influential Clichés of Socialism, which made its first appearance in 1962. Indeed, this new collection will contain a number of essays from those two earlier works, updated for the present day where necessary. Other entries first appeared in some version in FEE’s journal, The Freeman. Still others are brand new, never having appeared in print anywhere. They will be published weekly on the websites of both YAF and FEE: www.yaf.org and www.FEE.org until the series runs its course. A book will then be released in 2015 featuring the best of the essays, and will be widely distributed in schools and on college campuses.

See the index of the published chapters here.

(For more on this topic, see "Banning Sweatshops Only Hurts the Poor.")

#21 – “Capitalism’s Sweatshops and Child Labor Cry Out for Government Intervention”

(Editor’s note: Paul L. Poirot was a long-time editor of FEE’s journal, The Freeman. This essay is slightly edited from the original, published there in 1963 under the title “To Abolish Sweatshops.”)

Prevalent in the United States and other industrialized countries is the belief that without govern­mental intervention, such as wage and hour legislation, child labor laws, and rules concerning work­ing conditions for women, the long hours and grueling conditions of the “sweatshop” would run rampant.

The implication is that legislators, in the days of Abraham Lin­coln, for instance, were cruel and inconsiderate of the poor—no better than the caricatured fac­tory owners of the times who would employ men and women and children at low wages, long hours, and poor working conditions. Otherwise, had they been humani­tarians, legislators of a century ago and earlier would have prohibited child labor, legislated a 40-hour work week, and passed other laws to improve working condi­tions.

But the simple truth is that legislators of a few generations ago in the United States were powerless, as Mao or Nehru or Chavez or Castro has been powerless in more recent times, to wave a wand of restrictionist legislation and thereby raise the level of living and abolish poverty among the people. If such a miracle were pos­sible, every dictator and every democratically chosen legislator would “push the button” without hesitation. (Editor's note: See the recommended readings below for abundant historical evidence of this point).

The reason why women and children no longer find it neces­sary to work for low wages under poor conditions from dawn to dusk six days or more a week is the same reason why strong healthy men can avoid such onerous labor in a comparatively free industrialized society: surviving and earning a living are made easier through the use of tools and capital accumu­lated by personal saving and in­vestment.

In fiction, the children of na­ture may dwell in an earthly para­dise; but in the real life of all primitive societies, the men and women and all the children strug­gle constantly against the threat of starvation. Such agrarian econ­omies support all the people they can, but with high infant mortal­ity and short life spans for all survivors.

When savings can be accumu­lated, then tools can be made and life’s struggle somewhat eased—industrialization begins. And with the growth of savings and tools and production and trade, the pop­ulation may increase. As incomes rise and medical practices im­prove, children stand a better chance of survival, and men and women may live longer with less effort. Not that savings are ac­cumulated rapidly or that indus­trialization occurs overnight; it is a long, slow process. And in its early stages, the surviving women and children are likely to be found improving their chances as best they can by working in factories and so-called sweatshops. To pass a law prohibiting such effort at that stage of development of the so­ciety would simply be to condemn to death a portion of the expand­ing population. To prohibit child labor in developing countries today would be to condemn millions to starvation.

Once a people have developed habits of industry and thrift, learned to respect life and prop­erty, discovered how to invest their savings in creative and pro­ductive and profitable enterprise, found the mainspring of human progress—then, and only then, after the fact of industrialization and a prosperous expanding econ­omy, is it possible to enact child labor laws without thereby pass­ing a death sentence.

A wise and honest humanitarian will know that poverty (and worse) lurks behind every minimum wage law that sets a wage higher than some individual is capable of earn­ing; behind every compulsory 40-hour week rule that catches a man with a family he can’t support ex­cept through more than 40 hours of effort; behind every legislated condition of employment that forces some marginal employer into bankruptcy, thus destroying the job opportunities he otherwise afforded; behind every legal ac­tion that virtually compels retire­ment at age 65.

Men will take their children and women out of sweatshops as fast as they can afford it—as fast as better job opportunities develop—as fast as the supply of capital available per worker increases. The only laws necessary for that purpose are those that protect life and private property and thus encourage personal saving and in­vestment.

To believe that labor laws are the cause of improved living and working conditions, rather than an afterthought, leads to harmful laws that burden wealth creation, sap the incentive of the energetic, and close the doors of opportunity to those least able to afford it. And the ultimate effect is not a boon to mankind but a major push back toward barbarism.

Paul L. Poirot

Summary

Sweatshops and child labor were commonplace in preindustrial, precapitalist days because production and productivity were so low, not because people disliked their wives and children more than they do today.

Savings, investment, and economic growth improve working and economic conditions faster and more assuredly than well-intentioned but misguided laws that simply close doors of opportunity.

For further information, see:

“Child Labor and the British Industrial Revolution” by Lawrence W. Reed: http://tinyurl.com/k5yoy2l

“Sweatshop Blues: An Interview with Benjamin Powell”: http://tinyurl.com/kgpzfvd

“Book Review: Child Labor and the Industrial Revolution by Clark Nardinelli” as reviewed by David M. Brown: http://tinyurl.com/kv97qve

“Why Economies Grow” by Aaron Schavey: http://tinyurl.com/mvpbev4

“The Man Behind the Hong Kong Miracle” by Lawrence W. Reed: http://tinyurl.com/mkkrcpu