I would think that the word "exploit" should mean something quite specific when it comes to financial interactions. Namely getting more or paying less than you would have been willing to, because of the desperate situation of the other party.

By this definition I wouldn't be exploiting anyone when I advertised for a five dollar an hour lawn mower because I would not have anyone do it if I had to pay more. I would only be exploiting if I was prepared to pay ten but only paid five when I encountered a hungry man who I knew would take it. Conversely I WOULD be exploiting a rich man whose car broke down and I knew I was the only one around who could get him to a meeting in time to keep him from losing a 100K deal, and I charged him $2000 to give him a ride that I would normally do for $200. Not something many here would be concerned about but a good definition is a good definition.

That's pretty much the definition we're working with.

So that brings up the question of "Is it wrong to "exploit" someone who is actually soliciting that exploitation when he offers to do something for a ridiculously small amount, but you are not interested in having it done unless it was indeed that cheap."

That brings up the question of whether or not it was acceptable for the US to recognize the coup in Honduras or for the terms of NAFTA to allow for unobstructed export of heavily subsidized US corn while requiring the privatization of the Ejido while removing barriers for the development of manufacturing centers by multinational corporations which use the labor of displaced farmers. Oh, nevermind, that's just the real world. I'm sure that once we agree on a definition of "exploit" the policies will just write themselves.

DS, the problem will not be solved by coming to an agreement on the word "exploit" in the Platonic world, the problem is that some people don't care enough to even look at the real world.

You know how i was criticising people for JUST reading the first half of econ 101?

DS. You NEED to go read the first half of econ 101.

This is a terrible definition of exploitation. Paying less or being paid more than you would except is how value gets created.

An employer who understands the impact of a hiring decision should not pay so much that the hiring doesn't increase their equity enough to justify the risks and opportunity costs. An employee who completely understands the impact of the decision only accepts less than that when there is insufficient demand for their services and that's the best they can do. They are at a disadvantage because generally they must work, while the employer can easily choose not to hire. When the employer pays less they are taking advantage of that. Whether or not you call that "exploitation" imo is mostly a distraction in a real world full of very clear exploitation that gets ignored.

Micro. Please dont take this the wrong way.

This is really basic economics. Supply curve. Demand curve. Marginal demand. Marginal supply.

You are posting about something without the required knowledge to make sense. Fortunately, its really simple stuff to learn.

Your post reads like a new poster on one of the poker forums who has loads of strategy advice without knowing what pot odds are. Do the equivalent of reading the FAQ.

You haven't exactly anything noteworthy itt either, rugby. It's a little more complicated than econ101. There's macroeconomic (govt policies and international trade) and microeconomic issues along with labor economics.

Without drawing lines on a chart. The best example i can think of to demonstrate the point is an exchange i made on a recent road trip.

I was driving up in the mountains in the far north of the Philippines. Its essentially a tribal area, only 100 years since they were hunter gatherers.

Stopped by a road side store where a 15 year old kid was selling traditional wood carvings.

Ended up haggling over and buying this really cool tradional wooden shield. And I ended up paying about 20 bucks.

I could tell the kid was absolutely delighted and thought he had ripped me off. He probably would have accepted 2 or 3 dollars, which is probably what he charges to the traders who come through and buy his stuff to sell in the city.

I was also absolutely delighted, it was awesome, super authentic, and was a great reminder of my trip. I would have paid up to 100 bucks maybe.

No one was being exploited here just because the other person would have excepted less/paid more. Thats exactly how value is created.

The issue i think we agree on, is that unlike a simple trade like that, most employment decisions arent simple with full information.

Instead if i offer the trade for 20 bucks, tahe the shield. Then fine him for late delivery 20%. I then take his government ID and refise to give it back until he provides more shields at half the price.

The man i send to pick up more shields harrasses his sister.

While putting the shield on the truck, he falls over and trips on the rusty nails i left there. I dont pay for his treatment, but instead end the deal and dont pay him at all. On my way out i axcidentally knock over the wall of his stall, which collapes on a lamp, and him and his entire family birn to death.

But you know. He made the deal willingly, so its really on him that he didnt ask for more to cover the risk.

That doesn't even argue with anything I said or whether or not DS had a good definition of "exploitation" or not or what does or does not create value. You've give the names of a few concepts which say nothing about where value is created or what is a fair or exploitative labor rate.

this thread, and rainier, are hilarious. the situation was the best way to provide aid to a country that was decimated by a natural disaster. I maintained that it was likely better to, ya kno, build the country. rainer preferred to build factories and trailer schools.

I think you skimmed over the part where I said that part of my definition of exploitation is taking advantage of the other party's desperateness.

Not necessarily. The person who cures cancer is very likely to be less concerned about the suffering it causes than the average person. But he will certainly be more interested in molecular biology than almost anyone.

Your second example is a good example of why getting to the perfect Platonic definition of "exploitation" isn't very important. The debate from the laissez-faire side generally wants to boil things down to principles while more or less intentionally ignoring the real world which often resembles this second example.

In the first example there's no "ECON 101" answer for what the right price is and who took advantage of who. You both had incomplete information and you both left money on the table. Imo there is no better way to judge this than to just get the info and decide, totally and intentionally skipping the step of referring to some model of appropriate and fair pricing and obviously you did not take advantage of him.

I don't think wages are the problem if that is what you mean by labor rates tbh. I think it's more or less the costcutting that the third world factory owners do that lead to fires at plants and factories, and the govts there allowing it to go on. Perhaps also the lengthy work hours.

I think you're imagining that poorly designed policy is a disease and some easily digestible set of policies is the cure, but the disease is greed and indifference. You will not cure it by coming up with a perfect definition of "exploitation".

I like bringing it back to something that can be written as policy. Yeah, I would not set an international wage or something, but if I had the power to set US policy I would use some carrots and sticks to require those kinds of labor standards in items we allow for import.* Or to be more of an Anarchist, I would boycott companies that have bad labor practices.

*In practical terms this might be something like certifying that the country has reasonable labor protection laws and enforcement rather than trying to certify individual companies or products, perhaps combined with a black list of known offenders.

Re 1. Agree. I think we are on the same page.

Re 2. The gap between what i would pay and what he would accept IS the gap between the supply and demand curve. And that gap is exactly where and how value is created through trade.

As to what the fair price, econ 101 doesnt say how this is set in this deal, but does cover this concept. The idea is that there is value created in a trade, but where the price is set comes down to the individual bargaining. (In the short run). This is a pretty core concept of economics.

Of course. It all gets very complicated very quickly.

I think we (and DS) are crossing wires a little.

I say that just because you would pay more, that isnt sufficient for exploitation. I thought we disagreed, but seems not.

I think you guys arguing that there's some kind of "desperation factor" that can lead to exploitation. I dont quite understand... can you expand/define it?

Value isn't created when one person doesn't have bargaining rights.

Another thing is, maybe even "cancer" isn't a single disease that can be cured and what we're talking about here certainly isn't. You're looking for some molecular biologist to cure "disease" period. While I don't dismiss the value of using some guiding principles, the modeling and analogizing can be a problem as well and it's part of why Rainier really seamlessly changed the discussion from Haiti to China. What's the limit there? Could have have changed topics to labor practices and international relations in regards to Switzerland and thought it wasn't evasive?

I agree in part. However this makes the solution very US centric and posits US policy as the solution, rather than often the cause of the problem.

The reality is that developing countries have a ton of local people covering workers rights, working conditions, exploitation etc. The US has spent the last 70 years either turning a blind eye to, or actively encouraging states to harrass, imprison and kill these guys.

Whilst the US working on the side of the good guys would be great, ill settle for stopping actively harming them first.

So this is where econ 101 meets the real world. And why we need to move beyond just the immediate price paid situatuin.

In THEORY, if he moves from rice farming to the factory, he has chosen freely and is now better off. So by econ 101 definition, he doesnt need to be able to bargain over the price, he just accepts it if it makes him better off.

I dont think the bargaining has anything to do with it.

The reality of course is all the other stuff we talked about, lack of information, unfair dealing, violence, harrasment, safety, fire.

As well as the fact that the rice farm and the factory both exist in a political environment dominated by the rich and poweful, so that political and economic exploitation often go hand in hand.

For sure. A non-US contrived policy, like from the UN, might be better (and may well already exist), but the US would probably veto or ignore it.

It's good to see that whatever global and local elites are doing to address the problem seems to be working quite well.



https://twitter.com/bill_easterly/st...78445822922753

The general counsel of the GAP came to our law school and explained in detail the measures/groups/agreements/requirements they were involved in to ensure decent labor conditions.

There was a group of law students (maybe 10%) who basically wanted to hiss and boo. There was probably another 10% who wanted to remove all barriers. The rest were interested in someone trying to solve a difficult problem.