forced labor

SESTA/FOSTA: oppression through moral panic

pnrj current events, ethics , , , , , , , , , , , ,

Mar 31 JDN 2458574

The road to Hell is paved with good intentions.

The “Stop Enabling Sex Traffickers Act” and “Fight Online Sex Traffickers Act”. Who could disagree with that? Nobody wants to be on the side of sex traffickers.

Beware bills with such one-sided names; they are almost never what they seem. The “USA PATRIOT Act” was one of the most authoritarian and un-American pieces of legislation ever produced.

The bill was originally two bills, SESTA and FOSTA, which were then merged. For the rest of this post I’m just going to call it SESTA for short.

SESTA passed with overwhelming support; the vote totals were 388 to 25 in the House and 97 to 2 in the Senate. Apparently members of Congress fall for that sort of one-sided naming, because they also passed the USA PATRIOT Act 357 to 66 in the House and 98 to 1 in the Senate. This is the easiest way to take away our freedoms: Make it sound like you are doing something obviously good that no sane person could disagree with. If fascism comes to America, it will be called the “Puppies Are Cute Act” and it will pass with overwhelming support.

Of course I’m against sex trafficking. Almost everyone is against sex trafficking. The problem is that SESTA doesn’t actually do much to fight sex trafficking, may in some cases make sex trafficking worse, and sets a precedent that could undermine fundamental civil liberties.

So, what does SESTA actually do? At its core, it changes the way the Internet is regulated. It has been a basic principle of Internet regulation from the beginning that websites aren’t responsible for the actions of their users; unless a site is actively designed for an illegal purpose, the fact that it is used for illegal purposes is not the website’s fault.

This is how we regulate other forms of communication. If a mob boss calls a hit man on the phone, we don’t sue the phone company. If banks exchange emails to collude on manipulating interest rates, we don’t put the email sysadmin in jail. If terrorists send messages through the mail, we don’t arrest the postal workers.

There may be some grey areas, but generally courts have leaned toward greater liberty: The Anarchist’s Cookbook sure looks an awful lot like a means for conducting acts of sabotage and terrorism, but we’re so loathe to ban books that we allow it to be sold.

That is, until now. Because it’s about sex crime, we went into moral panic mode and stopped thinking clearly about the real implications of the policy. We don’t react the same way to gun crime—if we did, we’d have re-instituted the assault weapons ban a decade ago. This is clearly part of our double standard between sex and violence. Sex trafficking is horrible, to be sure; but I think that gun homicides clearly worse. (Yes, it is horrible to be forced into sexual slavery; but would you rather be shot to death?) But we wildly overreact to the former and do basically nothing to stop the latter. And the scale of the two problems is not just comparable, it’s almost identical: About 18,000-20,000 people are trafficked into the US each year for sex, and there were precisely 19,362 homicides in the US last year, of which 14,415 were committed with firearms.
Indeed, why focus specifically on sex trafficking? The majority of forced labor trafficking is not sex. I suppose it seems worse to become a sex slave than to become a slave at a diamond mine or a tobacco plantation… but not that much worse. Not so much worse that the former merits an overwhelming response and the latter barely any response at all.

SESTA breaks the usual principles applied to regulating communication and instead allows the government to penalize websites that are used to facilitate any kind of sale of sexual services.

Note, first of all, that this suddenly changes the topic from sex trafficking to sex work; the vast majority of sex workers are not trafficking victims but voluntary participants. In countries where brothels are legal and regulated, job satisfaction of sex workers is not statistically different from median job satisfaction overall.

Second, the bill doesn’t really do anything to target sex trafficking. It was already illegal to use websites for sex trafficking and already illegal to advertise sex trafficking via the Web. In fact, there is reason to think that pushing sex trafficking further into the Dark Web will only make the job of law enforcement harder.

Part of the liability protections for websites which will now be stripped away included a “right to moderate”: using moderation tools to remove illegal content would not result in additional liability. Under SESTA, this has changed; sites will now want to avoid moderating illegal content, because in so doing they would be effectively admitting that they knew it existed. Since there can never be any guarantee of removing 100% of all illegal content without shutting the entire site down, sites may choose instead to not moderate, so they have more plausible deniability when illegal content is ultimately found.

Instead, the main effect of SESTA will be to put more sex workers in danger. Where previously they could use websites to screen clients, they now have to return to in-person contact that is much more dangerous. It pushes them from the relative security of working indoors and online to the extreme danger of walking the street or working for a pimp. SESTA also removes the opportunity for sex workers to communicate with each other, because now any content related to sex work is banned; and these kinds of communication networks can be literally a matter of life and death.

Make no mistake: People will die over this. Mostly women and queer men (because the vast majority of sex work clients are male). The homicide rate of female victims dropped an astonishing 17 percent when Craigslist iSmplemented its Erotic section that allowed sex workers to use the Internet to screen clients. SESTA is taking that away, so we can expect homicides of female victims to rise.

SESTA is also blatantly Unconstitutional. The original form of the bill included an ex post facto clause, which violates one of the most basic principles of the Constitution.

Even with that removed, SESTA is obviously in violation of the First Amendment; this is censorship. It has already been used to justify Tumblr’s purge of all sexual content, which caused a 20% drop in user base and an exodus of erotic artists and sex workers to other platforms, and will disproportionately harm queer youth because Tumblr had previously been one of the Internet’s safest spaces for exploring sexual identity.

And now that the precedent has been set to hold websites responsible for their users, expect to see more of this. We already see sites being held responsible for copyright infringement; but we could soon see similar laws passed punishing sites for “facilitating” illegal drug use, hacking, or hate speech. Operators of communication platforms will be forced to become arms of law enforcement or face prison themselves.

Of course we all want to stop sex trafficking. Everyone agrees on that. But a bill that targets bad things can still be a bad bill.

So what can we actually do about sweatshops?

pnrj core principles, critique of neoclassical economics, development economics, public policy , , , , , , , , , , , , , , , , , , , , , , , , , ,

JDN 2457489

(The topic of this post was chosen by a vote of my Patreons.) There seem to be two major camps on most political issues: One camp says “This is not a problem, stop worrying about it.” The other says “This is a huge problem, it must be fixed right away, and here’s the easy solution.” Typically neither of these things is true, and the correct answer is actually “This is a huge problem, well worth fixing—but we need to do a lot of work to figure out exactly how.”

Sweatshop labor is a very good example of this phenomenon.

Camp A is represented here by the American Enterprise Institute, which even goes as far as to defend child labor on the grounds that “we used to do it before”. (Note that we also used to do slavery before. Also protectionism, but of course AEI doesn’t think that was good. Who needs logical consistency when you have ideological purity?) The College Conservative uses ECON 101 to defend sweatshops, perhaps not realizing that economics courses continue past ECON 101.

Camp B is represented here by Buycott, telling us to buy “made in the USA” products and boycott all companies that use sweatshops. Other commonly listed strategies include buying used clothes (I mean, there may be some ecological benefits to this, but clearly not all clothes can be used clothes) and “buy union-made” which is next to impossible for most products. Also in this camp is LaborVoices, a Silicon Valley tech company that seems convinced they can somehow solve the problem of sweatshops by means of smartphone apps, because apparently Silicon Valley people believe that smartphones are magical and not, say, one type of product that performs services similar to many other pre-existing products but somewhat more efficiently. (This would also explain how Uber can say with a straight face that they are “revolutionary” when all they actually do is mediate unlicensed taxi services, and Airbnb is “innovative” because it makes it slightly more convenient to rent out rooms in your home.)

Of course I am in that third camp, people who realize that sweatshops—and exploitative labor practices in general—are a serious problem, but a very complex and challenging one that does not have any easy, obvious solutions.

One thing we absolutely cannot do is return to protectionism or get American consumers to only buy from American companies (a sort of “soft protectionism” by social construction). This would not only be inefficient for us—it would be devastating for people in Third World countries. Sweatshops typically provide substantially better living conditions than the alternatives available to their workers.

Yet this does not mean that sweatshops are morally acceptable or should simply be left alone, contrary to the assertions of many economists—most famously Benjamin Powell. Anyone who doubts this must immediately read “Wrongful Beneficence” by Chris Meyers; the mere fact that an act benefits someone –or even everyone—does not prove that the act was morally acceptable. If someone is starving to death and you offer them bread in exchange for doing whatever you want them to do for the next year, you are benefiting them, surely—but what you are doing is morally wrong. And this is basically what sweatshops are; they provide survival in exchange for exploitation.

It can be remarkably difficult to even tell which companies are using sweatshops—and this is by design. While in response to public pressure corporations often try to create the image of improving their labor standards, they seem quite averse to actually improving labor standards, and even more averse to establishing systems of enforcement to make those labor standards followed consistently. Almost no sweatshops are directly owned by the retailers whose products they make; instead there is a chain of outsourced vendors and distributors, a chain that creates diffusion of responsibility and plausible deniability. When international labor organizations do get the chance to investigate the labor conditions of factories operated by multinational corporations, they invariably find that regulations are more honored in the breach than the observance.

So, what would a long-run solution to sweatshops look like? In a word: Development. The only sustainable solution to oppressive labor conditions is a world where everyone is healthy enough, educated enough, and provided with enough resources that their productivity is at a First World level; furthermore it is a world where workers have enough bargaining power that they are actually paid according to that productivity. (The US has lately been finding out what happens if you do the former but not the latter—the result is that you generate an enormous amount of wealth, but it all ends up in the hands of the top 0.1%. Yet it is quite possible to do the latter, as Denmark has figured out, #ScandinaviaIsBetter.)

To achieve this, we need more factories in Third World countries, not fewer—more investment, not less. We need to buy more of China’s exports, hire more factory workers in Bangladesh.

But it’s not enough to provide incentives to build factories—we must also provide incentives to give workers at those factories more bargaining power.

To see how we can pull this off, I offer a case study of a (qualified) success: Nike.

In the 1990s, Nike’s subcontractors had some of the worst labor conditions in the shoe industry. Today, they actually have some of the best. How did that happen?

It began with people noticing a problem—activists and investigative journalists documented the abuses in Nike’s factories. They drew public attention, which undermined Nike’s efforts at mass advertising (which was basically their entire business model—their shoes aren’t actually especially good). They tried to clean up their image with obviously biased reports, which triggered a backlash. Finally Nike decides to actually do something about the problem, and actually becomes a founding member of the Fair Labor Association. They establish new labor standards, and they audit regularly to ensure that those standards are being complied with. Today they publish an annual corporate social responsibility report that actually appears to be quite transparent and accurate, showing both the substantial improvements that have been made and the remaining problems. Activist campaigns turned Nike around almost completely.

In short, consumer pressure led to private regulation. Many development economists are increasingly convinced that this is what we need—we must put pressure on corporations to regulate themselves.

The pressure is a key part of this process; Willem Buiter wasn’t wrong when he quipped that “self-regulation stands in relation to regulation the way self-importance stands in relation to importance and self-righteousness to righteousness.” For any regulation to work, it must have an enforcement mechanism; for private regulation to work, that enforcement mechanism comes from the consumers.

Yet even this is not enough, because there are too many incentives for corporations to lie and cheat if they only have to be responsive to consumers. It’s unreasonable to expect every consumer to take the time—let alone have the expertise—to perform extensive research on the supply chain of every corporation they buy a product from. I also think it’s unreasonable to expect most people to engage in community organizing or shareholder activism as Green America suggests, though it certainly wouldn’t hurt if some did. But there are just too many corporations to keep track of! Like it or not, we live in a globalized capitalist economy where you almost certainly buy from a hundred different corporations over the course of a year.

Instead we need governments to step up—and the obvious choice is the government of the United States, which remains the world’s economic and military hegemon. We should be pressuring our legislators to make new regulations on international trade that will raise labor standards around the globe.

Note that this undermines the most basic argument corporations use against improving their labor standards: “If we raise wages, we won’t be able to compete.” Not if we force everyone to raise wages, around the globe. “If it’s cheaper to build a factory in Indonesia, why shouldn’t we?” It won’t be cheaper, unless Indonesia actually has a real comparative advantage in producing that product. You won’t be able to artificially hold down your expenses by exploiting your workers—you’ll have to actually be more efficient in order to be more profitable, which is how capitalism is supposed to work.

There’s another argument we often hear that is more legitimate, which is that raising wages would also force corporations to raise prices. But as I discussed in a previous post on this subject, the amount by which prices would need to rise is remarkably small, and nowhere near large enough to justify panic about dangerous global inflation. Paying 10% or even 20% more for our products is well worth it to reduce the corruption and exploitation that abuses millions of people—a remarkable number of them children—around the globe. Also, it doesn’t take a mathematical savant to realize that if increasing wages by a factor of 10 only increases prices by 20%, workers will in fact be better off.

Where would all that extra money come from? Now we come to the real reason why corporations don’t want to raise their labor standards: It would come from profits. Right now profits are extraordinarily large, much larger than they have any right to be in a fair market. It was recently estimated that 74% of billionaire wealth comes from economic rent—that is to say, from deception, exploitation, and market manipulation, rather than actual productivity. (There’s a lot of uncertainty in this estimate; the true figure is probably somewhere between 50% and 90%—it’s almost certainly a majority, and could be the vast majority.) In fact, I really shouldn’t say “money”, which we can just print; what we really want to know is where the extra wealth would come from to give that money value. But by paying workers more, improving their standard of living, and creating more consumer demand, we would in fact dramatically increase the amount of real wealth in the world.

So, we need regulations to improve global labor standards. But we must first be clear: What should these regulations say?

First, we must rule out protectionist regulations that would give unfair advantages to companies that produce locally. These would only result in economic inefficiency at best, and trade wars throwing millions back into poverty at worst. (Some advantage makes sense to internalize the externalities of shipping, but really that should be created by a carbon tax, not by trade tariffs. It’s a lot more expensive and carbon-intensive to ship from Detroit to LA than from Detroit to Windsor, but the latter is the “international” trade.)

Second, we should not naively assume that every country should have the same minimum wage. (I am similarly skeptical of Hillary Clinton’s proposal to include people with severe mental or physical disabilities in the US federal minimum wage; I too am concerned about people with disabilities being exploited, but the fact is many people with severe disabilities really aren’t as productive, and it makes sense for wages to reflect that.) If we’re going to have minimum wages at all—basic income and wage subsidies both make a good deal more sense than a hard price floor; see also my earlier post on minimum wage—they should reflect the productivity and prices of the region. I applaud California and New York for adopting $15 minimum wages, but I’d be a bit skeptical of doing the same in Mississippi, and adamantly opposed to doing so in Bangladesh.

It may not even be reasonable to expect all countries to have the same safety standards; workers who are less skilled and in more dire poverty may rationally be willing to accept more risk to remain employed, rather than laid off because their employer could not afford to meet safety standards and still pay them a sufficient wage. For some safety standards this is ridiculous; making sufficiently many exits with doors that swing outward and maintaining smoke detectors are not expensive things to do. (And yet factories in Bangladesh often fail to meet such basic requirements, which kills hundreds of workers each year.) But other safety standards may be justifiably relaxed; OSHA compliance in the US costs about $70 billion per year, about $200 per person, which many countries simply couldn’t afford. (On the other hand, OSHA saves thousands of lives, does not increase unemployment, and may actually benefit employers when compared with the high cost of private injury lawsuits.) We should have expert economists perform careful cost-benefit analyses of proposed safety regulations to determine which ones are cost-effective at protecting workers and which ones are too expensive to be viable.

While we’re at it, these regulations should include environmental standards, or a global carbon tax that’s used to fund climate change mitigation efforts around the world. Here there isn’t much excuse for not being strict; pollution and environmental degradation harms the poor the most. Yes, we do need to consider the benefits of production that is polluting; but we have plenty of profit incentives for that already. Right now the balance is clearly tipped far too much in favor of more pollution than the optimum rather than less. Even relatively heavy-handed policies like total bans on offshore drilling and mountaintop removal might be in order; in general I’d prefer to tax rather than ban, but these activities are so enormously damaging that if the choice is between a ban and doing nothing, I’ll take the ban. (I’m less convinced of this with regard to fracking; yes, earthquakes and polluted groundwater are bad—but are they Saudi Arabia bad? Because buying more oil from Saudi Arabia is our leading alternative.)

It should go without saying (but unfortunately it doesn’t seem to) that our regulations must include an absolute zero-tolerance policy for forced labor. If we find out that a company is employing forced labor, they should have to not only free every single enslaved worker, but pay each one a million dollars (PPP 2005 chained CPI of course). If they can’t do that and they go bankrupt, good riddance; remind me to play them the world’s saddest song on the world’s tiniest violin. Of course, first we need to find out, which brings me to the most important point.

Above all, these regulations must be enforced. We could start with enforceable multilateral trade agreements, where tariff reductions are tied to human rights and labor standards. This is something the President of the United States could do, right now, as an addendum to the Trans-Pacific Partnership. (What he should have done is made the TPP contingent on this, but it’s too late for that.) Future trade agreements should include these as a matter of course.If countries want to reap the benefits of free trade, they must be held accountable for sharing those benefits equitably with their people.

But ultimately we should not depend upon multilateral agreements between nations—we need truly international standards with global enforcement. We should empower the International Labor Organization to enact sanctions and inspections (right now it mostly enacts suggestions which are promptly and dutifully ignored), and possibly even to arrest executives for trial at the International Criminal Court. We should double if not triple or quadruple their funding—and if member nations will not pay this voluntarily, we should make them—the United Nations should be empowered to collect taxes in support of global development, which should be progressive with per-capita GDP. Coercion, you say? National sovereignty, you say? Millions of starving little girls is my reply.

Right now, the ability of multinational corporations to move between countries to find the ones that let them pay the least have created a race to the floor; it’s time for us to raise that floor.

What can you yourself do, assuming you’re not a head of state? (If you are, I’m honored. Also, any openings on your staff?) Well, you can vote—and you can use that vote to put pressure on your legislators to support these kinds of polices. There are also some other direct actions you can take that I discussed in a previous post; but mainly what we need is policy. Consumer pressure and philanthropy are good, and by all means, don’t stop; but to really achieve global justice we will need nothing short of global governance.

Free trade, fair trade, or what?

pnrj core principles, critique of neoclassical economics, development economics, public policy , , , , , , , , , , , , , , , , , , , , , , , , ,

JDN 2457271 EDT 11:34.

As I mentioned in an earlier post, almost all economists are opposed to protectionism. In a survey of 264 AEA economists, 87% opposed tariffs to protect US workers against foreign competition.

(By the way, 58% said they usually vote Democrat and only 23% said they usually vote Republican. Given that economists are overwhelmingly middle-age rich White males—only 12% of tenured faculty economists are women and the median income of economists is over $90,000—that’s saying something. Dare I suggest it’s saying that Democrat economic policy is usually better?)

There are a large number of published research papers showing large positive effects of free trade agreements, such as this paper, and this paper, and this paper, and this paper. It’s hard to find any good papers showing any significant negative effects. This is probably why the consensus is so strong; the empirical evidence is overwhelming.

Yet protectionism is very popular among the general public. The majority of both Democrat and Republican voters believe that free trade agreements have harmed the United States. For decades, protectionism has always been the politically popular answer.

To be fair, it’s actually possible to think that free trade harms the US but still support free trade; actually there are some economists who argue that free trade has harmed the US, but has benefited other countries like China and India so much more that it is worth it, making free trade an act of global altruism and good will (for the opposite view, here’s a pretty good article about how “free trade” in principle is often mercantilism in practice, and by no means altruistic). As Krugman talks about, there is some evidence that income inequality in the First World has been exacerbated by globalization—but it’s clearly not the primary reason for rising inequality.

What’s going on here? Are economists ignoring the negative impacts of free trade because it doesn’t fit their elegant mathematical models? Is the general public ignorant of how trade actually works? Does the way free trade works, or its interaction with human psychology, inherently obscure its benefits while emphasizing its harms?

Yes. All of the above.

One of the central mistakes of neoclassical economics is the tendency to over-aggregate. Instead of looking at the impact on individuals, it’s much easier to look at the impact on aggregated abstractions like trade flows and GDP. To some extent this is inevitable—there are simply too many people in the world to keep track of them all. But we need to be aware of what welose when we aggregate, and we need to test the robustness of our theories by applying different models of aggregation (such as comparing “how does this affect Americans” with “how does this affect the First World middle class”).

It is absolutely unambiguous that free trade increases trade flows and GDP, and for small countries these benefits can be mind-bogglingly huge. A key part of the amazing success story of economic development that is Korea is that they dramatically increased their openness to global trade.

The reason for this is absolutely fundamental to economics, and in grasping it in 1776 Adam Smith basically founded the field: Voluntary trade benefits both parties.

As most economists would put it today, comparative advantage leads to Pareto-improving gains from trade. Or as I’d tend to put it, more succinctly yet just as thoroughly based in modern game theory: Trade is nonzero-sum.

When you sell a product to someone, it is because the money they’re offering you is worth more to you than the product—and because the product is worth more to them than the money. You each lose something you value less and gain something you value more—so you are both better off.

This mutual benefit occurs whether you are individuals, corporations, or nations. It’s a fundamental principle of economics that underlies the operation of markets at every scale.

This is what I think most people don’t understand when they say they want to “stop sending jobs overseas”. If by that all you mean is ensuring that there aren’t incentives to offshore and outsource, that’s quite reasonable. Even some degree of incentive to keep businesses in the US might make sense, to avoid a race-to-the-bottom in global wages. But I get the sense that it is more than this, that people have a general notion that jobs are zero-sum and if we hire a million people in China that means a million people must lose their jobs in the US. This is not simply wrong, it is fundamentally wrong; it misses the entire point of economics. If there is one core principle that defines economics, I think it would be that the universe is nonzero-sum; gains for some can also be gains for others. There is not a fixed amount of stuff in the world that we distribute; we can make more stuff. Handled properly, a trade that results in a million people hired in China can mean an extra million people hired in the US.

Once you introduce a competitive market, things get more complicated, because there aren’t just winners—there are also losers. When you have competitors, someone can buy from them instead of you, and the two of them benefit, but you are harmed. By the standard methods of calculating benefits and harms (which admittedly leave much to be desired), we can show quite clearly that in general, on average, the benefits outweigh the harms.

But of course we don’t live “in general, on average”. Despite the overwhelming, unambiguous benefit to the economy as a whole, there is some evidence that free trade can produce a good deal of harm to specific individuals.

Suppose you live in the US and your job is to assemble iPads. You’re good at it, you like it, it pays pretty well. But now Apple says that they want to “reduce labor costs” (they are in fact doing nothing of the sort; to really reduce labor costs in a deep economic sense you’d have to make work easier, more productive, or more fun—the wage and the cost are fundamentally different things), so they outsource production to Foxconn in China, who pay wages 1/30 of what you were being paid.

The net result of this change to the economy as a whole is almost certainly positive—the price of iPads goes down, we all get to have iPads. (There’s a meme going around claiming that the price of an iPad would be almost $15,000 if it were made in the US; no, it would cost about $1000 even if our productivity were no higher and Apple could keep their current profit margin intact, both of which are clearly overestimates. But since it’s currently selling for about $500, that’s still a big difference.) Apple makes more profits, which is why they did it—and we do have to count that in our GDP. Most importantly, workers in China get employed in safe, high-skill jobs instead of working in coal mines, subsistence farming, or turning to drugs and prostitution. More stuff, more profits, better jobs for some of the world’s poorest workers. These are all good things, and overall they outweigh the harm of you losing your job.

Well, from a global perspective, anyway. I doubt they outweigh the harm from your perspective. You still lost a good job; you’re now unemployed, and may have skills so specific that they can’t be transferred to anything else. You’ll need to retrain, which means going back to school or else finding one of those rare far-sighted companies that actually trains their workers. Since the social welfare system in the US is such a quagmire of nonsensical programs, you may be ineligible for support, or eligible in theory and unable to actually get it in practice. (Recently I got a notice from Medicaid that I need to prove again that my income is sufficiently low. Apparently it’s because I got hired at a temporary web development gig, which paid me a whopping $700 over a few weeks—why, that’s almost the per-capita GDP of Ghana, so clearly I am a high-roller who doesn’t need help affording health insurance. I wonder how much they spend sending out these notices.)

If we had a basic income—I know I harp on this a lot, but seriously, it solves almost every economic problem you can think of—losing your job wouldn’t make you feel so desperate, and owning a share in GDP would mean that the rising tide actually would lift all boats. This might make free trade more popular.

But even with ideal policies (which we certainly do not have), the fact remains that human beings are loss-averse. We care more about losses than we do about gains. The pain you feel from losing $100 is about the same as the joy you feel from gaining $200. The pain you feel from losing your job is about twice as intense as the joy you feel from finding a new one.

Because of loss aversion, the constant churn of innovation and change, the “creative destruction” that Schumpeter considered the defining advantage of capitalism—well, it hurts. The constant change and uncertainty is painful, and we want to run away from it.

But the truth is, we can’t. There’s no way to stop the change in the global economy, and most of our attempts to insulate ourselves from it only end up hurting us more. This, I think, is the fundamental reason why protectionism is popular among the general public but not economists: The general public sees protectionism as a way of holding onto the past, while economists recognize that it is simply a way of damaging the future. That constant churning of people gaining and losing jobs isn’t a bug, it’s a feature—it’s the reason that capitalism is so efficient in the first place.

There are a few ways we can reduce the pain of this churning, but we need to focus on that—reducing the pain—rather than trying to stop the churning itself. We should provide social welfare programs that allow people to survive while they are unemployed. We should use active labor market policies to train new workers and match them with good jobs. We may even want to provide some sort of subsidy or incentive to companies that don’t outsource—a small one, to make sure they don’t do so needlessly, but not a large one, so they’ll still do it when it’s actually necessary.

But the one thing we must not do is stop creating jobs overseas. And yes, that is what we are doing, creating jobs. We are not sending jobs that already exist, we are creating new ones. In the short run we also destroy some jobs here, but if we do it right we can replace them—and usually we do okay.

If we stop creating jobs in India and China and around the world, millions of people will starve.

Yes, it is as stark as that. Millions of lives depend upon continued open trade. We in the United States are a manufacturing, technological and agricultural superpower—we could wall ourselves off from the world and only see a few percentage points shaved off of GDP. But a country like Nicaragua or Ghana or Vietnam doesn’t have that option; if they cut off trade, people start dying.

This is actually the main reason why our trade agreements are often so unfair; we are in by far the stronger bargaining position, so we can make them cut their tariffs on textiles even as we maintain our subsidies on agriculture. We are Mr. Bumble dishing out gruel and they are Oliver Twist begging for another bite.

We can’t afford to stop free trade. We can’t even afford to significantly slow it down. A global economy is the best hope we have for global peace and global prosperity.

That is not to say that we should leave trade completely unregulated; trade policy can and should be used to enforce human rights standards. That enormous asymmetry in bargaining power doesn’t have to be used to maximize profits; it can be used to advance human rights.

This is not as simple as saying we should never trade with nations that have bad human rights records, by the way. First of all that would require we cut off Saudi Arabia and China, which is totally unrealistic and would impoverish millions of people; second it doesn’t actually solve the problem. Instead we should use sanctions, tariffs, and trade agreements to provide incentives to improve human rights, rewarding governments that do and punishing governments that don’t. We could have a sliding tariff that decreases every time you show improvement in human rights standards. Think of it like behavioral reinforcement; reward good behavior and you’ll get more of it.

We do need to have sweatshops—but as Krugman has come around to realizing, we can make sweatshops safer. We can put pressure on other countries to treat their workers better, pay them more—and actually make the global economy more efficient, because right now their wages are held down below the efficient level by the power that corporations wield over them. We should not demand that they pay the same they would here in the First World—that’s totally unrealistic, given the difference in productivity—but we should demand that they pay what their workers actually deserve.

Similar incentives should apply to individual corporations, which these days are as powerful as some governments. For example, as part of a zero-tolerance program against forced labor, any company caught using or outsourcing to forced labor should have its profits garnished for damages and the executives who made the decision imprisoned. Sometimes #Scandinaviaisnotbetter; IKEA was involved in such outsourcing during the Cold War, and it is currently being litigated just how much they knew and what they could have done about it. If they knew and did nothing, some IKEA executive should be going to prison. If that seems extreme, let me remind you what they did: They used slaves.

My standard for penalizing human rights violations, whether by corporations or governments, is basically like this: Follow the decision-making up the chain of command, stopping only when the next-higher executive can clearly show to the preponderance of evidence that they were kept out of the loop. If no executive can provide sufficient evidence, the highest-ranking executive at the time the crime was committed will be held responsible. If you don’t want to be held responsible for crimes committed by people who work for you, it’s your responsibility to bring them to justice. Negligence in oversight will not be exonerating because you didn’t know; it will be incriminating because you should have. When your bank is caught laundering money for terrorists and drug lords, it isn’t enough to have your chief of compliance resign; he should be imprisoned—and if his superiors knew about it, so should they.

In fact maybe the focus should be on corporations, because we have the legal authority to do that. When dealing with other countries, there are United Nations rules and simply the de facto power of large trade flows and national standing armies. With Saudi Arabia or China, there’s a very real chance that they’ll simply tell us where we can shove it; but if we get that same kind of response from HSBC or Goldman Sachs (which, actually, we did), we can start taking out handcuffs (that, we did not do—but I think we should have).

We can also use consumer pressure to change the behavior of corporations, such as Fair Trade. There’s some debate about just how effective these things are, but the comparison that is often made between Fair Trade and tariffs is ridiculous; this is a change in consumer behavior, not a change in government policy. There is absolutely no loss of freedom. Choosing not to buy something does not constitute coercion against someone else. Maybe there are more efficient ways to spend money (like donating it directly to the best global development charities), but if you start going down that road you quickly turn into Peter Singer and start saying that wearing nicer shoes means you’re committing murder. By all means, let’s empirically study different methods of fighting poverty and focus on the ones that work best; but there’s a perverse smugness to criticisms of Fair Trade that says to me this isn’t actually about that at all. Instead, I think most people who criticize Fair Trade don’t support the idea of altruism at all—they’re far-right Randian libertarians who honestly believe that selfishness is the highest form of human morality. (It is in fact the second-lowest, according to Kohlberg.) Maybe it will turn out that Fair Trade is actually ineffective at fighting poverty, but it’s clear that an unregulated free market isn’t good at that either. Those aren’t the only options, and the best way to find out which methods work is to give them a try. Consumer pressure clearly can work in some cases, and it’s a low-cost zero-regulation solution. They say the road to Hell is paved with good intentions—but would you rather we have bad intentions instead?

By these two methods we could send a clear message to multinational corporations that if they want to do business in the US—and trust me, they do—they have to meet certain standards of human rights. This in turn will make those corporations put pressure on their suppliers, all the way down the supply chain, to uphold the standards lest they lose their contracts. With some companies upholding labor standards in Third World countries, others will be forced to, as workers refuse to work for companies that don’t. This could make life better for many millions of people.

But this whole plan only works on one condition: We need to have trade.