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.
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.
I think we agree on at least one of the main points thus.
Regarding
“Should” is a red flag word
I did not mean to invoke a particularly heavy philosophical absolutist ‘ought’ or anything like that, with my “should”. It was instead simply a sloppy shortcut—and you’re right to call that out—to say the banal: the rich considering whether she’s exploiting the poor and/or whether it’s a win win, might want to consider—what tends to be surprisingly often overseen—that the exploitation vs. beneficial trade may have no easily satisfying solution as long as she keeps the bulk of her riches to herself vis a vis the sheer poverty of her potential poor interlocutant.
But with regards to having to (I add the emphasis):
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.
I think there’s not much to update. “Exploitation” is a shortcut for a particular, negative feeling we humans tend to naturally get from certain type of situation, and as I tried to explain, it is a rather simple thing. We cannot just define that general aversion away just to square everything we like in a simple way. ‘Exploitation’ simply is exploitation even if it is (e.g. slightly) better for the poor than one other unfair counterfactual (non-exploitation without sharing the unfairly* distributed riches), nothing can change that. Only bulk sharing of our resources may lead to a situation we may wholeheartedly embrace with regards to (i) exploitation and (ii) economics. So if we’re not willing to bite the bullet of bulk-sharing of resources, we’re stuck with either being unhappy about exploitation or about foregoing gains of trade (unless we’ve imbibed econ 101 so strongly that we’ve grown insensitive to ‘exploitation’ at least as long as we don’t use simple thought experiments to remind ourselves how exploitative even some win-win trades can be).
*Before you red-flag ‘unfair’ as well: Again, I’m simply referring to the way people tend to perceive things, on average or so.
I think there’s not much to update. “Exploitation” is a shortcut for a particular, negative feeling we humans tend to naturally get from certain type of situation, and as I tried to explain, it is a rather simple thing. [...] *Before you red-flag ‘unfair’ as well: Again, I’m simply referring to the way people tend to perceive things, on average or so.
This is where I disagree. I don’t think it is simple, partly because I don’t think “unfair” is simple. People’s perceptions of what is “unfair”, like people’s perceptions of anything else that means anything at all, can be wrong. If you better inform people and notice that their perceptions of what is “fair” changes, then you have to start keeping track of the distinction between “people’s econ101 illiterate conceptions of fairness” and “the actual underlying thing that doesn’t dissolve upon clear seeing”.
For example, if we have a pie and we ask someone to judge if it’s fair to split it two ways and give the third person no pie, then that person might say it’s an unfair distribution because the fair distribution is 1⁄3,1/3,1/3. But then if we inform the judge that the third person was invited to help make the pie and declined to do so while the other people did all the work, then all of a sudden that 1⁄3,1/3,1/3 distribution starts to look less fair and more like a naïve person’s view of what fairness is. The aversion isn’t defined away, it dissolves once you realize that it was predicated on nonsense.
Another reason I don’t think it’s simple is because I don’t think “exploitation” is just something people are just “unhappy about”. It’s a blaming thing. If I say you’re exploiting me, that’s an accusation of wrongdoing, and a threat of getting you lynched if people side with me strongly enough and you don’t cave to the threats. I claim that if you say “exploitation is happening, but it’s no one’s fault and the employers aren’t doing anything morally wrong” then you’re doing something very different than what other people are doing when they talk about exploitation.
If there’s a situation where a bunch of poor orphans are employed for 50c per grueling 16 hour work day plus room and board, then the fact that it might be better than starving to death on the street doesn’t mean it’s as great as we might wish for them. We might be sad about that, and wish they weren’t forced to take such a deal. Does that make it “exploitation?” in the mind of a lot of people, yeah. Because a lot of people never make it further than “I want them to have a better deal, so you have to give it to them”—even if it turns out they’re only creating 50.01c/day worth of value, the employer got into the business out of the goodness of his heart, and not one of the people crying “exploitation!” cares enough about the orphans to give them a better deal or even make they’re not voting them out of a living. I’d argue that this just isn’t exploitation, and anyone thinking it is just hasn’t thought things through.
On the other hand, if an employer demands sexual favors from his poor young woman employees, that rubs us the wrong way morally in a way that is easier to square with Econ 101. For one, if he’s not demanding sexual favors from his male or ugly female employees, it suggests that maybe the work they do is enough to pay them for, and if we collectively say “Hey knock it off. You can’t demand sexual favors from your employees” he might keep employing them and giving them a better deal. Maybe “this guy is doing something wrong by demanding sexual favors” actually holds up in a way that “this guy is doing something morally wrong by paying market wages” does not.
I think “what validity is left in our concept of ‘exploitation’ once we realize that people can’t be obligated to pay whatever wage we’d like to close our eyes and believe is fair?” is a nontrivial question.
If there’s a situation where a bunch of poor orphans are employed for 50c per grueling 16 hour work day plus room and board, then the fact that it might be better than starving to death on the street doesn’t mean it’s as great as we might wish for them. We might be sad about that, and wish they weren’t forced to take such a deal. Does that make it “exploitation?” in the mind of a lot of people, yeah. Because a lot of people never make it further than “I want them to have a better deal, so you have to give it to them”—even if it turns out they’re only creating 50.01c/day worth of value, the employer got into the business out of the goodness of his heart, and not one of the people crying “exploitation!” cares enough about the orphans to give them a better deal or even make they’re not voting them out of a living. I’d argue that this just isn’t exploitation, and anyone thinking it is just hasn’t thought things through.
Notice how you had to create a strawman of what people commonsensically call exploitation. The person you describe does exactly NOT seem to be employing the workers merely to “gaining disproportionate benefit from someone’s work because their alternatives are poor”. In your example, informed about the situation, with about 0 sec of reflection, people would understand him to NOT be exploitative. Of course, people usually would NOT blame Mother Theresa for having poor people work in her facilities and earning little, IF Mother Theresa did so just out of good heart, without ulterior motives, without deriving disproportionate benefit, and while paying 99.98% of receipts to staff, even if that was little.
Note, me saying exploitation is ‘simple’ and is just what it is even if there is a sort of tension with econ 101, doesn’t mean every report about supposed exploitation would be correct, and I never maintained it wouldn’t be easy—with usual one paragraph newspaper reports—to mislead the superficial mob into seeing something as exploitation even when it isn’t.
It remains really easy to make sense of usual usage of ‘exploitation’ vis a vis econ 101 also in your example:
The guy is how you describe? No hint of exploitation, and indeed a good deal for the poor.
The situation is slightly different, the guy would earn more and does it such as to merely to get as rich as possible? He’s an exploitative business man. Yes, the world is better off with him doing his thing, but of course he’s not a good* man. He’d have to e.g. share his wealth one way or another in a useful way if he really wanted to be. Basta. (*usual disclaimer about the term..)
Btw, imho a more interesting, but not really much more challenging, extension of your case is, if overall what the orphans produce is actually very valuable, say creating utility of 500 $/day for ultimate consumers, but mere market forces, competition between the firms or businessmen, means market prices for the goods produced become still only 50.01c/day, while the labor market clearing wage for the destitute orphans is 50c/day.
Even in this situation, commonsense ‘exploitation’ is straightforward applicable and +- intelligible a concept:
To a degree, the firms or businessmen become a bit irrelevant intermediaries. One refuses to do the trade? Another one will jump in anyway… Are they exploitative or not? Depends a bit on subtle details, but individually they have little leeway to change anything in the system.
The rich society as an aggregate who enjoys the 500 $/day worth items as consumers, while having, via their firms, had them produced for 50.01c/day by the poor orphans with no outside options, is of course an exploitative society in common usage of the term. Yes, the orphans may be better off than without it, but commoners do have an uneasy feeling if they see our society doing that, and I don’t see any surprise in it; indeed, we’re a ‘bad’ society if we just leave it like that and don’t think about doing something more to improve the situation.
The fact that some in society take the wrong conclusion from the feeling of unease about exploitation, and think we ought to stop buying the stuff from the orphans, is really not the ‘fault’ of the exploitation concept, it is the failure of us to imagine (or be willing to bite the bullet of) a beyond-the-market solution, namely the bulk sharing of riches with those destitute orphan workers or what have you. (I actually now wonder whether that may be where the confusion that imho underlies the OP’s article is coming from: Yes, people do take weird econ-101-igoring conclusions when they detect exploitation, but this doesn’t mean they interpret the wrong things as exploitation. It means their feel-good ‘solution’ might backfire; instead they should track consequences of alternatives and see that the real solution to the indeed existing exploitation problem isn’t as simple as to go to the next, overpriced pseudo-local pseudo-sustainable hipster shop, but is to start doing something more directly about the sheer poverty of their fellow beings far or near).
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.
I think we agree on at least one of the main points thus.
Regarding
I did not mean to invoke a particularly heavy philosophical absolutist ‘ought’ or anything like that, with my “should”. It was instead simply a sloppy shortcut—and you’re right to call that out—to say the banal: the rich considering whether she’s exploiting the poor and/or whether it’s a win win, might want to consider—what tends to be surprisingly often overseen—that the exploitation vs. beneficial trade may have no easily satisfying solution as long as she keeps the bulk of her riches to herself vis a vis the sheer poverty of her potential poor interlocutant.
But with regards to having to (I add the emphasis):
I think there’s not much to update. “Exploitation” is a shortcut for a particular, negative feeling we humans tend to naturally get from certain type of situation, and as I tried to explain, it is a rather simple thing. We cannot just define that general aversion away just to square everything we like in a simple way. ‘Exploitation’ simply is exploitation even if it is (e.g. slightly) better for the poor than one other unfair counterfactual (non-exploitation without sharing the unfairly* distributed riches), nothing can change that. Only bulk sharing of our resources may lead to a situation we may wholeheartedly embrace with regards to (i) exploitation and (ii) economics. So if we’re not willing to bite the bullet of bulk-sharing of resources, we’re stuck with either being unhappy about exploitation or about foregoing gains of trade (unless we’ve imbibed econ 101 so strongly that we’ve grown insensitive to ‘exploitation’ at least as long as we don’t use simple thought experiments to remind ourselves how exploitative even some win-win trades can be).
*Before you red-flag ‘unfair’ as well: Again, I’m simply referring to the way people tend to perceive things, on average or so.
This is where I disagree. I don’t think it is simple, partly because I don’t think “unfair” is simple. People’s perceptions of what is “unfair”, like people’s perceptions of anything else that means anything at all, can be wrong. If you better inform people and notice that their perceptions of what is “fair” changes, then you have to start keeping track of the distinction between “people’s econ101 illiterate conceptions of fairness” and “the actual underlying thing that doesn’t dissolve upon clear seeing”.
For example, if we have a pie and we ask someone to judge if it’s fair to split it two ways and give the third person no pie, then that person might say it’s an unfair distribution because the fair distribution is 1⁄3,1/3,1/3. But then if we inform the judge that the third person was invited to help make the pie and declined to do so while the other people did all the work, then all of a sudden that 1⁄3,1/3,1/3 distribution starts to look less fair and more like a naïve person’s view of what fairness is. The aversion isn’t defined away, it dissolves once you realize that it was predicated on nonsense.
Another reason I don’t think it’s simple is because I don’t think “exploitation” is just something people are just “unhappy about”. It’s a blaming thing. If I say you’re exploiting me, that’s an accusation of wrongdoing, and a threat of getting you lynched if people side with me strongly enough and you don’t cave to the threats. I claim that if you say “exploitation is happening, but it’s no one’s fault and the employers aren’t doing anything morally wrong” then you’re doing something very different than what other people are doing when they talk about exploitation.
If there’s a situation where a bunch of poor orphans are employed for 50c per grueling 16 hour work day plus room and board, then the fact that it might be better than starving to death on the street doesn’t mean it’s as great as we might wish for them. We might be sad about that, and wish they weren’t forced to take such a deal. Does that make it “exploitation?” in the mind of a lot of people, yeah. Because a lot of people never make it further than “I want them to have a better deal, so you have to give it to them”—even if it turns out they’re only creating 50.01c/day worth of value, the employer got into the business out of the goodness of his heart, and not one of the people crying “exploitation!” cares enough about the orphans to give them a better deal or even make they’re not voting them out of a living. I’d argue that this just isn’t exploitation, and anyone thinking it is just hasn’t thought things through.
On the other hand, if an employer demands sexual favors from his poor young woman employees, that rubs us the wrong way morally in a way that is easier to square with Econ 101. For one, if he’s not demanding sexual favors from his male or ugly female employees, it suggests that maybe the work they do is enough to pay them for, and if we collectively say “Hey knock it off. You can’t demand sexual favors from your employees” he might keep employing them and giving them a better deal. Maybe “this guy is doing something wrong by demanding sexual favors” actually holds up in a way that “this guy is doing something morally wrong by paying market wages” does not.
I think “what validity is left in our concept of ‘exploitation’ once we realize that people can’t be obligated to pay whatever wage we’d like to close our eyes and believe is fair?” is a nontrivial question.
Notice how you had to create a strawman of what people commonsensically call exploitation. The person you describe does exactly NOT seem to be employing the workers merely to “gaining disproportionate benefit from someone’s work because their alternatives are poor”. In your example, informed about the situation, with about 0 sec of reflection, people would understand him to NOT be exploitative. Of course, people usually would NOT blame Mother Theresa for having poor people work in her facilities and earning little, IF Mother Theresa did so just out of good heart, without ulterior motives, without deriving disproportionate benefit, and while paying 99.98% of receipts to staff, even if that was little.
Note, me saying exploitation is ‘simple’ and is just what it is even if there is a sort of tension with econ 101, doesn’t mean every report about supposed exploitation would be correct, and I never maintained it wouldn’t be easy—with usual one paragraph newspaper reports—to mislead the superficial mob into seeing something as exploitation even when it isn’t.
It remains really easy to make sense of usual usage of ‘exploitation’ vis a vis econ 101 also in your example:
The guy is how you describe? No hint of exploitation, and indeed a good deal for the poor.
The situation is slightly different, the guy would earn more and does it such as to merely to get as rich as possible? He’s an exploitative business man. Yes, the world is better off with him doing his thing, but of course he’s not a good* man. He’d have to e.g. share his wealth one way or another in a useful way if he really wanted to be. Basta. (*usual disclaimer about the term..)
Btw, imho a more interesting, but not really much more challenging, extension of your case is, if overall what the orphans produce is actually very valuable, say creating utility of 500 $/day for ultimate consumers, but mere market forces, competition between the firms or businessmen, means market prices for the goods produced become still only 50.01c/day, while the labor market clearing wage for the destitute orphans is 50c/day.
Even in this situation, commonsense ‘exploitation’ is straightforward applicable and +- intelligible a concept:
To a degree, the firms or businessmen become a bit irrelevant intermediaries. One refuses to do the trade? Another one will jump in anyway… Are they exploitative or not? Depends a bit on subtle details, but individually they have little leeway to change anything in the system.
The rich society as an aggregate who enjoys the 500 $/day worth items as consumers, while having, via their firms, had them produced for 50.01c/day by the poor orphans with no outside options, is of course an exploitative society in common usage of the term. Yes, the orphans may be better off than without it, but commoners do have an uneasy feeling if they see our society doing that, and I don’t see any surprise in it; indeed, we’re a ‘bad’ society if we just leave it like that and don’t think about doing something more to improve the situation.
The fact that some in society take the wrong conclusion from the feeling of unease about exploitation, and think we ought to stop buying the stuff from the orphans, is really not the ‘fault’ of the exploitation concept, it is the failure of us to imagine (or be willing to bite the bullet of) a beyond-the-market solution, namely the bulk sharing of riches with those destitute orphan workers or what have you. (I actually now wonder whether that may be where the confusion that imho underlies the OP’s article is coming from: Yes, people do take weird econ-101-igoring conclusions when they detect exploitation, but this doesn’t mean they interpret the wrong things as exploitation. It means their feel-good ‘solution’ might backfire; instead they should track consequences of alternatives and see that the real solution to the indeed existing exploitation problem isn’t as simple as to go to the next, overpriced pseudo-local pseudo-sustainable hipster shop, but is to start doing something more directly about the sheer poverty of their fellow beings far or near).