Capitalism, Greed, Corruption, Bribery and Child Labor

Hey All,

I got into a discussion this weekend with some friends about a free society absent government intervention. Two things came up that left me thinking….and without a satisfactory answer for my friends.

Without some governmental entity to intervene, how would corruption/greed be handled? What would prevent some “greedy capitalist” from taking his/her money and hiring thugs to hurt/steal/kill people for whatever reason they state? For example, if a rich person bought a security firm and went about terrorizing people. What prevents this or some opposition security firm from being bought out and joining forces rather than fighting that security firm? How would something like this be curtailed or prevented? Is corruption on this level likely to take place?

I feel like I am missing something or I just can’t explain it as thoroughly as I would like. Basically they think complete anarchy would ensue and corruption/greed/bribery would triumph.

Second, we discussed child labor laws and I explained how I felt that they were unnecessary and a child should be able to work if they want. I felt that there was no reason why a child could not work to help out his/her family. They were shocked. They brought up child labor exploitation in the 1800s in the mills, etc, etc and said no child should have to work. I personally agree, and noted that because of the wealth in this country very few children have to work. But I don’t think it is bad if one has to, or wants to, to help out their family.

Has anyone ever run into this reaction? Any thoughts? Am I being too cruel?

Funny, I was writing an essay about this very topic yesterday, so I can give you some pointers. First, when the service of security is provided by the free market, it is subject to the immutable laws of the free market. This means that when one security firm goes bad, others will offer protection in order to grab market share. This in fact is the mechanism that the free market has to counter corruption. The government, on the other hand, has no such mechanism. If the government police force become corrupt, who will you turn to? Especially if private ownership of guns is outlawed. The free market however will provide many competitors who will keep a close eye on each other in case they see foul play, in which case they would grab market share by protecting that security firm’s previous customers.

As I have said, the very opposite occurs. Only in a monopoly market structure can corruption persist, since consumers have no choice. Free markets provide the best punishment against extant corruption, and the best incentive against potential corruption.

It is the responsibility of the child, and the parents to decide on the child’s fate. In the relatively few cases where parents may exploit their children, various charity organisations exist that would take care of them. As for doubts about charity funding, remember that firms will likely (already do) fund charities as a PR stunt, and with no taxes, everyone would have more disposable income, hence more donations. You could view charity as any other service. The more the demand for it (people in need), and the less the supply of it (charity donations), the more the perceived value of new donations will be. If nobody donates except you, you will have a much higher esteem amongst other people than in a climate where everybody donates and donation has become commonplace.

Hope this helps.

  1. In an anarchist society, people would naturally band together under social contracts, protect each other, and possibly hire security companies if needed. And as the poster above me noted, it would be profitable for another company to jump in and help the “underdogs” for a greater amount of the market share.

  2. What if kids want to work? I’m 16 and I want to work, and some of my friends who do not want to go to college want to work longer hours than they are legally allowed. However, there are also many 13, 14, and 15 year olds who want to work but have much stricter rules to follow.

If children want to work and make their own money, why prevent them? The child expects to benefit from making money working while the business expects to benefit by having another worker.

You also have to remember that many children, especially in poorer areas, just aren’t naturally talented enough to really get good grades in high school or even get through college. Why force them to go to school and not allow them to get more on-the-job experience?

Child labor laws are really based on a skewed view of morality, not any rational thought or reasoning.

I agree. If a child wishes to work in order to make some money, they should be allowed. It is the parents responsibility oversee the child’s activites and limit him/her from working in a dangerous enviornment or long hours, not the government’s. Child labor laws are really unnecesary, and do not protect children. Instead they obstruct the child’s freedom to do what they desire.

IMO, the more important issue at stake (from a utilitarian perspective) is that of on-the-job training and having another money-making member of the family.

To put it bluntly, some people just don’t have the natural capacity to pass high school or go to college. Why not let them job experience while others can learn for other career paths?

First I assume you are talking about anarchy. Without a central authority to lay down the law, individuals can basically use three things to protect themselves against such abuses.

First, there is social ostracism. This is the expected outcome of behaving badly. It’s similar to the “customer is always right” mentality. If a business screws you, you avoid doing business with him. If someone commits a “crime” against you, you stop all contact with that person, and you advocate everyone else to do similarly. The more evidence you have of what actually transpired and the more sympathetic others are to your being slighted, the better such efforts will generally be. True, collective, complete ostracism is even better than jail. Jail will at least provide the person with food that they did not farm…

Without central authority, you can still have police and courts. In fact, you’re most likely to get choices in these regards. You may have to pay for them, but you are probably overpaying currently for your monopolized versions of these services. Courts would determine guilt and punishment and until compliance was reached that particular court would mandate social ostracism. It’s one thing to be pulled over and find out that the law was looking for you and having to go to jail. It’s another when you go to buy groceries and you are denied sale because you have not satisfied a popular court’s punishment.

Of course, this puts a lot of responsibility on society at large. They must verify which courts are the most supportive of what they believe to be justice. They must keep up with court decisions and identify ostracized individuals. As such, the most influential and wide-reaching courts will be the most expensive.

The second means of deterring crime would be to heavily protect yourself and your property to avoid such situations in the first place…another responsibility. If someone walks into your home or business and attempts to purposefully break your stuff, restrain them and throw them out. Use locks. There are no guarantees.

Finally, there is vigilante justice. If you can not generate social cooperation to prevent crime against you and you cannot deter it yourself, you may wish to organize your own band of thugs to punish those who are causing you anguish. In using such violence and force, you are subjecting yourself to evaluation by the rest of society, who may wish to ostracize you for unmerritted actions or revenge from the party you are using arms against.

Most people already do these types of things, although they don’t want such complete responsibility. As such, they tolerate some degree of state tyranny, assuming that it is either less harmful in total to society or less risky to random individuals. Although, if placed in an anarchic situation, people will naturally assume such rolls quicker than we would imagine. The problem most people have is that society is some unified structure, where some action at one end will be known by all other people. Being realistic, we don’t expect the police to find the guy who scratched our car or stole our hubcaps. In the same token, we can’t expect people to expend huge amounts of efforts policing crimes that very few people really care about.


As far as child labor goes, think about all labor. Life would be great if no one had to do any form of work. Too bad that’s fiction. Of course children shouldn’t be forced to be slave laborers, but once again…who should? The truth is this: 30% of Americans don’t graduate high school. Some who do can’t even read. Much less don’t graduate college. This leaves very little room for them in our job market. Most will end up in unskilled labor or learning some craft either on the job or through an inexpensive technical school.

So…rather than send children to school, paid by taxes, we could argue they’d be better off on welfare, working 1 day a week in some skilled profession as an apprentice or going to a technical school for 1 day a week. They’d have way more leisure time and actually learn a useful job skill.

Parents tend to love their kids. They don’t want them to slave away in a factory, and they want to provide them with high quality education so they can get high paying jobs. They want their kids to be leisurely and prosperous. But is it better for the child to go to a public school where he bearly learns how to read, or for the child works in a factory to supplement family income, which may help drive the family out of poverty, allowing them to wisely invest saved money in a family business, which the child can assume ownership over once reaching an adult age?

I don’t think we can “know” the answer to such questions. Statists tend to spare reality and responsibility for idealism and prejudice. They assume sending your kids to state-run school automatically makes them smart and qualified for jobs upon adulthood (esp state-provided jobs). They assume child labor is some spiralling addiction, leading to consequently greater child labor, rather than a means to lift a family from the unskilled working class.

Responsibility is taken from parents who should be the ones to decide these things. Most of those who crusade against such practices have no idea what it’s like to live in poverty. I will say that I don’t think orphans should be thrown into manual labor jobs. And I do think that children should be able to appeal their parents’ decisions to others in the case that the parents are attempting to exploit them. But these are rare cases compared to general child labor that generally do not break childrens’ backs.

AS FAR AS ANY 1800’S LABOR CONDITIONS GO, TELL THEM IT’S THE GD YEAR 2008. ASK THEM IF IT WOULD HAVE MADE SENSE TO THE LABORERS OF THE 1800’S THAT THEY NEEDED STATE RULES TO PREVENT 1600’S LABOR CONDITIONS. Labor conditions are not determined by rules → they are determined by reality. No one will work 16 hour days 7 days a week if they don’t need to. You could abolish every labor law on the books and you won’t have anything even somewhat resembling 1800’s labor conditions. They will always naturally improve in free markets, and even in many state-controlled ones that do not curb scientific and technological advancement. What statists fail to realize is that 400 years ago, the kids who didn’t labor didn’t survive.

Just make sure they realize it wasn’t simple rules and regulations that invented bronze hunting tools, developed agricultural technology, cured diseases, preserved food, or advanced science in general. Almost all of the things that bring progress away from the cruel nature of survival in a world of limited natural resources were created by free men and thought seeking to advance the prosperity of both themselves and all man. The state, on the other hand, perpetuates war, taxation, large-scale corruption, and waste.

Make sure these people realize that the only time that food has been purposefully allowed to rot without being consumed by the hungry is in our modern times backed by the power of our own government who have thrown men in jail for refusing to do so.

Leftists certainly have dreamt up some pretty funny ideas about exploitation, huh?

If you’re arguing from a minarchist perspective (explaining anarcho-capitalism to statists to vindicate liberty is generally impossible and probably counter-productive) the solution to the possibility of a “greedy capitalist” hiring people to kill others is simple: a state is kept in existence (ideally) precisely for the purpose of keeping this from happening. (Of course with the uber-state we have today the government does most of the killing). However I surmise that your interlocutors’ real fear is not so much that this might happen but rather that someone might (oh horrors!) make a profit by charging more for his product than he pays his worker to make.

As for child labor, the key question to ask is why a child might want to work in the work in the first place. The answer of course is that he knows, or believes at any rate, that he’ll improve his condition if he does so (as is so with any other type of human action). Naturally he may be wrong as children frequently are about such things, for which reason he may quit when he wishes. Keeping this in mind it becomes clear that the infamous mills of the industrial revolution were what kept innumerable workers including children from death by starvation. How anyone can think this is a bad thing is beyond me.

The general rule is this: a worker, qua worker, is only being exploited if he is forced to work against his will. Since human labor (or any other commodity for that matter) has no inherent value, despite the confabulations of Marxists, one person working for a lesser wage than another does not in any sense constitute or necessitate theft.

I actually tried arguing something to this nature of a republican leftist once, and when I asked him why the workers, instead of revolting by picketing in front of the place they formerly worked at, they didn’t spend their days leisurely enjoying life as a farmer, providing for himself. He responded that something to this nature happened and it resulted in “food surpluses” which drove down food prices, which drove farmers out of business, which then resulted in underproduction and foot shortages for society at large. Thus, by subsidizing farmers and buying up “surplus” food to rot, we had food prices that weren’t quite affordable to lower income families, with the goal of high production. What is that? Making sure we had enough food for it to go unused. As though most consumers don’t waste a fair amount of the food they actually pay for voluntarily. Of course, the inevitable response is food stamps, tax credits, rebates…all for nothing. it’s such a senseless argument, that if the people who demanded food, en masse, quit their jobs and became farmers, killing agricultural demand and spiking supply, everyone would be happy, except for the existing farmers. But the farmers won’t go starving; they will lose some access to industrial equipment and manufactured goods. Of course, this never happens, even without quotas, buy-ups, subsidies, etc. Agriculture is not a naturally provided utopia that unskilled laborers readily adapt to.

So then the leftist utopia; where is the union who owns the firm, a collective ownership? A corporation? Isn’t this supposed to be the most despised? It is rather, everyone should have a say on how everything they come in contact with is produced, without their having doing that production, or put some material stake in its production, although they are doing some already well-known task as their civic duty. Let everyone be farmers, except for the guy who hands out the iPods.

I say, is it not moral to consume in proportion to what you produce, and through free exchange, be able to satisfy much greater desire than you or any other person could singularly create.