World

The economic case against slavery

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In 1981, Mauritania became the last country in the world to abolish slavery, putting a supposed end to the archaic institution, yet there are an estimated 30 million people illegally enslaved across the globe today. The abhorrent ethics of the practice have not stopped many governments from letting modern slavery slip through the cracks. In order to convince governments to take real action, we must prove that slavery is an economic burden, and an investment in eradicating it will produce returns.

Slaves were once an expensive capital purchase, but rapid population growth in the mid-twentieth century has led to a sharp decrease in the cost of slave labor. Furthermore, unregulated migration systems in many countries have left a lot migrants with minimal information about legal migration and their rights. This has made it easier for criminals to exploit and traffic migrant labor. The International Labour Organization researched the flow of migrant workers into forced labor and found that migrant workers encompass a large percentage of trafficking victims. Business owners who wish to utilize this cheap, disposable labor can achieve higher profits compared to those that pay their laborers a wage, preventing money from flowing naturally from employers to employees and back into the economy by consumption. However, while slavery is profitable for criminal business, it is a drag on the economy as a whole.

Many impoverished, uneducated civilians who are desperate for money are tricked into taking out a loan where labor is demanded as repayment. According to Anti-Slavery International, bonded labor has become the most widespread form of modern slavery in the world. Bonded slaves become illegally trapped in servitude as that loan is extremely difficult to repay and the debt passes down each generation. Slavery flourishes in places with extreme poverty. In fact, it perpetuates poverty as slave labor decreases the wages for unskilled, free laborers, reducing the disposable income of free families. The research of Kevin Bales, co-founder of the human rights organization Free the Slaves, has shown that the first investment former slaves want to make is putting their children in schools. Education is crucial in combating poverty. First, education helps prevent the spread of poverty between generations. Second, learning to read, write, and think critically greatly increases one’s economic rate of return. As long as governments will not do anything to stop the illegal use of slavery, freedman labor remains an untapped resource in an economy.

The article “Slavery is Bad for Business” by Monti Narayan Datta and Kevin Bales states that the production output of slave labor is remarkably low due to a lack of incentives, lack of human development and lower life expectancy. They are not working to their full capacity and, consequently, have low economic value. When slaves are freed, the local economy booms as these people now act as economic agents. There is a greater incentive to increase productivity and their human capital since they are now supporting their families and exercising labor autonomy. Not only do they contribute to the economy through work, but also through consumption as active members of society with purchasing power.

Despite slavery’s persistence, education and legislation designed to hold businesses accountable for their use of servitude in the lower end of their supply chains have proven effective. For example, the California Transparency in Supply Chain Act mandates that any company with worldwide annual revenue above $100 million publicly discloses what they are doing to eradicate human trafficking and forced labor from their supply chain. If companies consciously work to stop purchasing intermediate goods produced by slaves, the demand for slave labor will decrease.

The second, critical step is to invest in freeing slaves and giving them a real chance at living a productive, healthy life. This step is crucial in ensuring the long-term success of those freed from slavery. Bales describes the freeing of slaves in the United States as the “botched emancipation of 1865” where millions of former slaves were left without access to education or political autonomy. Instead they were faced with discrimination and violence, which continues to resonate through society today. Without giving people some sort of chance, they are more likely to fall victim to other types of exploitation.

Ethics aside, slavery is not being addressed aggressively enough by governments around the world. If they looked honestly at the economic ramifications of a monstrous system that refuses to die, only then may governments be coerced to act.

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