Duffy: Libertarians differ from most when addressing the issue of exploitation in two fundamental ways. First, they view exchange at the individual level vs. the abstract level. E.g., the “U.S.” doesn’t trade with “China.” Apple engages in various exchanges with Chinese employees, suppliers, consumers and shareholders. Second, they focus on the nature of the exchange. Is it coerced or voluntary? If coerced, exploitation exists; one party benefits at the expense of the other. If voluntary, both parties enter into the exchange because they expect to benefit. The operative word, of course, is “expect.” There are no guarantees and people often look back at decisions with regret. All part of the learning process. The future is uncertain and always will be.
Through the libertarian lens, what are some examples of exploitation? At the individual level, the answer is clear: rape, murder, robbery, fraud.
Greedy capitalists
What about at the abstract level? Do "greedy capitalists" exploit "helpless workers?" As long as no one is putting a gun to anyone’s head, no. If an employer and employee agree to an exchange, both parties expect to benefit. The employer prefers the labor services of the employee over the wage he’s willing to pay. The employee prefers the money he receives above the time spent doing the work. Win-win. If either party feels they are no longer benefiting, they are free to walk away (unless there is a contract that commits both to a certain amount of time).
Trade deficit with China
Is China exploiting the U.S. because they run a large trade surplus? Again, no. Since the exchanges involved are all voluntary, they must be mutually beneficial. Apple sells iPhones to Chinese consumers. Apple receives money (they have a money surplus and goods deficit) while the buyer receives an iPhone (they have a money deficit and goods surplus). Walmart buys products from Chinese suppliers. Even though they run a money deficit, they do so willingly… because they benefit. Walmart's Chinese suppliers run money deficits with their employees. Again, both parties benefit. Trade surpluses and deficits are an accounting fiction. Do you worry about running a chronic trade deficit with your local grocery store?
Sweatshops
Does a multinational firm setting up a factory in a poor country exploit its workers? If entered into freely and peacefully, the exchange only takes place if both parties benefit. E.g., if Nike builds a sneaker factory in Bangladesh, they must make the wages and work environment enticing enough to attract workers from their current jobs. They have to give them a better deal. They have to improve their lives. Some call this “unfair.” Libertarians call it heroic.
Taxation
How does a libertarian judge taxation? Is this a voluntary, mutually beneficial exchange or is it coercive and exploitative? The question answers itself.
~ Kevin Duffy, Quora answer, February 9, 2020
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