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Sweatshops, tacos, and Wal-Mart: Is there anything to criticize?

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Zwolinski ably takes up the left-libertarian critique of sweatshops, and it can easily be applied to left-libertarian criticisms of firms like Wal-Mart. As I mentioned a few days ago, I think the most important lesson Wal-Mart and Taco Bell teach has less to do with their virtues (or lack thereof) and more to do with what they illustrate about changes in the relative levels of coercion and cooperation over the last several centuries.

I’m the first to grant that there are solid reasons to criticize Wal-Mart/Taco Bell/sweatshops/corporations/etc; indeed, when I give lectures on the effects of Wal-Mart I generally include a section in which I discuss these reasons. Nonetheless, I don’t think libertarians should embrace the anti-sweatshop movement or the anti-Wal-Mart movement because they are generally founded on claims and arguments that are just spectacularly wrong. The anti-sweatshop movement is but one element of a much larger rebellion against basic economics. Most of the anti-sweatshop arguments I encounter are grounded in a fundamental failure to engage and understand the law of comparative advantage.

A few years ago, I wrote a Mises Daily–which I should probably update in light of the most recent research-in which I made the case that the debate about Wal-Mart is not a debate about the abuses of government power on some margins like eminent domain. The Wal-Mart debate is, for the most part, a debate about the nature and desirability of voluntary, commercial society writ large. Wal-Mart’s use of the state to steal from others via eminent domain is definitely worthy of criticism, but the typical anti-Wal-Mart case is grounded in a larger critique of commercial society. It’s use of the state to hobble its competitors via higher minimum wages and employer health care mandates also deserves criticism, but if anything, these positions have been praised rather than condemned by Wal-Mart’s more vocal critics. Similarly, the Taco Bell tomato controversy of a few years ago was based not on the kind of nuanced arguments about subtle and not-so-subtle forms of coercion that Roderick Long and others are making, but on the critics’ failure to understand or appreciate how productivity and opportunity cost determine wages in competitive markets.

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