Your post introduces a thoughtful definition of exploitation, but I don’t think narrowing the definition is necessary. The common understanding — say “gaining disproportionate benefit from someone’s work because their alternatives are poor” or so — is already clear and widely accepted. The real confusion lies in how exploitation can coexist with voluntary, mutually beneficial trade. This coexistence is entirely natural and doesn’t require resolution — they are simply two different questions. Yet neither Econ 101 nor its critics seem to recognize this.
Econ 101 focuses entirely on the mutual benefit of trade, treating it as a clear win-win, and dismisses concerns about exploitation as irrelevant. Critics, by contrast, are so appalled by the exploitative aspect of such relationships that they often deny the mutual benefit altogether. Both sides fail to see that trade can improve lives while still being exploitative. These are not contradictions; they are two truths operating simultaneously.
For (stylized) example, when rich countries (or thus their companies) offshore to places like Bangladesh or earlier South Korea, they often offer wages that are slightly better than local alternatives — a clear improvement for workers. However, those same companies leverage their stronger bargaining position to offer the bare minimum necessary to secure labor, stopping far short of providing what might be considered fair compensation. This is both a win-win in economic terms and exploitative in a moral sense. Recognizing this duality doesn’t require redefining exploitation — it simply requires acknowledging it.
This misunderstanding leads to counterproductive responses. Economists too quickly dismiss concerns about exploitation, while critics focus on measures like boycotts or buying expensive domestic products, which may (net) harm poor offshore workers. I think also Will MacAskill noted in Doing Good Better this issue, and that the elephant in the room is that the rich should help the poor independently of the question of the labor exchange itself, i.e. that the overwhelming moral point is that, if we care, we should simply donate some of our resources.
Exploitation isn’t about minor adjustments to working conditions or wages. It’s about recognizing how voluntary trade, while beneficial, can still be exploitative if the party with the excessively limited outside options has to put in unjustifiably much while gaining unjustifiably little. This applies to sweatshop factories just as much as to surrogate mother-ship or mineral resource mining—and maybe to Bob in your example, independently of they phone call details.
that the elephant in the room is that the rich should help the poor independently of the question of the labor exchange itself, i.e. that the overwhelming moral point is that, if we care, we should simply donate some of our resources.
“Should” is a red flag word, which serves to hide the facets of reality that generate sense of obligation. It helps to taboo it, and find out what’s left.
If a rich person wants to help the poor, it will be more effective so simply help the poor—i.e. with some of their own resources. Trying to distort the market leads to smaller gains from trade which could be used to help the poor. So far so good.
If someone else want’s the rich person to help the poor with the rich person’s resources, then with what will this rich person be motivated? If the goodness of their own hearts is enough, then this “someone else” is irrelevant, and not in the picture. If the rich person is to be motivated by gains from trade with someone else, then great. However, this is equivalent to the trade partners demanding more of the surplus and then donating it themselves, so again we’re out of luck.
If we’re talking about obligating the rich person to spend their resources on poor people, then they’re de facto not the rich person’s resources anymore, and we’re distorting the market by force in order to get there. Now we have to deal with unfree trade and the lack of gains from trade that we could have had.
We can’t just say “they coexist, no problem!”, because to the extent that they’re different frameworks we can’t have both. You can have free trade and acknowledge exploitation only if you accept that exploitation is totally fine and fair—at which point you’re redefining the word “exploitation”. The moment you try to stop someone from a kind of exploitation that can coexist with free trade, you’re trying to stop free trade, with all the consequences of that.
That’s not to say we have to give up on caring about all exploitation and just do free trade, but it does mean that if we want to have both we have to figure out how to update our understanding of exploitation/economics until the two fit.
Your post introduces a thoughtful definition of exploitation, but I don’t think narrowing the definition is necessary. The common understanding — say “gaining disproportionate benefit from someone’s work because their alternatives are poor” or so — is already clear and widely accepted. The real confusion lies in how exploitation can coexist with voluntary, mutually beneficial trade. This coexistence is entirely natural and doesn’t require resolution — they are simply two different questions. Yet neither Econ 101 nor its critics seem to recognize this.
Econ 101 focuses entirely on the mutual benefit of trade, treating it as a clear win-win, and dismisses concerns about exploitation as irrelevant. Critics, by contrast, are so appalled by the exploitative aspect of such relationships that they often deny the mutual benefit altogether. Both sides fail to see that trade can improve lives while still being exploitative. These are not contradictions; they are two truths operating simultaneously.
For (stylized) example, when rich countries (or thus their companies) offshore to places like Bangladesh or earlier South Korea, they often offer wages that are slightly better than local alternatives — a clear improvement for workers. However, those same companies leverage their stronger bargaining position to offer the bare minimum necessary to secure labor, stopping far short of providing what might be considered fair compensation. This is both a win-win in economic terms and exploitative in a moral sense. Recognizing this duality doesn’t require redefining exploitation — it simply requires acknowledging it.
This misunderstanding leads to counterproductive responses. Economists too quickly dismiss concerns about exploitation, while critics focus on measures like boycotts or buying expensive domestic products, which may (net) harm poor offshore workers. I think also Will MacAskill noted in Doing Good Better this issue, and that the elephant in the room is that the rich should help the poor independently of the question of the labor exchange itself, i.e. that the overwhelming moral point is that, if we care, we should simply donate some of our resources.
Exploitation isn’t about minor adjustments to working conditions or wages. It’s about recognizing how voluntary trade, while beneficial, can still be exploitative if the party with the excessively limited outside options has to put in unjustifiably much while gaining unjustifiably little. This applies to sweatshop factories just as much as to surrogate mother-ship or mineral resource mining—and maybe to Bob in your example, independently of they phone call details.
“Should” is a red flag word, which serves to hide the facets of reality that generate sense of obligation. It helps to taboo it, and find out what’s left.
If a rich person wants to help the poor, it will be more effective so simply help the poor—i.e. with some of their own resources. Trying to distort the market leads to smaller gains from trade which could be used to help the poor. So far so good.
If someone else want’s the rich person to help the poor with the rich person’s resources, then with what will this rich person be motivated? If the goodness of their own hearts is enough, then this “someone else” is irrelevant, and not in the picture. If the rich person is to be motivated by gains from trade with someone else, then great. However, this is equivalent to the trade partners demanding more of the surplus and then donating it themselves, so again we’re out of luck.
If we’re talking about obligating the rich person to spend their resources on poor people, then they’re de facto not the rich person’s resources anymore, and we’re distorting the market by force in order to get there. Now we have to deal with unfree trade and the lack of gains from trade that we could have had.
We can’t just say “they coexist, no problem!”, because to the extent that they’re different frameworks we can’t have both. You can have free trade and acknowledge exploitation only if you accept that exploitation is totally fine and fair—at which point you’re redefining the word “exploitation”. The moment you try to stop someone from a kind of exploitation that can coexist with free trade, you’re trying to stop free trade, with all the consequences of that.
That’s not to say we have to give up on caring about all exploitation and just do free trade, but it does mean that if we want to have both we have to figure out how to update our understanding of exploitation/economics until the two fit.