Matt Zeitlin: Impetuous Young Whippersnapper

Chris Hayes links us to the equal parts fascinating and repulsive story of an Oklahoma businessman who recruited some 54 Indian workers to work in his steel factory. He immediately confiscated their passports, and then payed them 2-3 dollars an hour, fed them poorly, lied to them about the surrounding area so they wouldn’t leave the factory dormrooms and generally mistreated them. His justification was largely that these Indian college graduates — who had to pay a hefty fee to the recruiter to even get the jobs — were being rescued from desperate poverty and thus shouldn’t complain about their crappy conditions. Of course, in this case, my sympathy is with the workers that ultimately got green cards and could stay in the country. But I have to wonder about Chris’ ultimate conclusion, that this is “global capitalism at its finest.” Chris, erstwhile social democrat that he is, is clearly being sarcastic. But, in a slightly different world, the story of the Indian steel workers could be global capitalism at its finest.

The problem faced by the Oklahoma steelman was a familiar one: he simply could not compete with the price of foreign steel companies that had lower labor and regulatory costs. So, instead of moving all of his operations to Kuwait where he could build steel products for the oil industry, he went to India and recruited qualified workers. Instead of being fraudulent and lying about the conditions and the pay, and then confiscated their passports and abusing the workers when in the United States, he could have easily payed them minimum wage, or even the prevailing wage of, say, his lowest quartile of workers in Oklahoma. THe benefits would be huge. The Indian men would experience a huge jump in their standard of living, and their families who receive remittances would have a standard of living increase back home in India. The increase in skilled labor would contribute to the greater Tulsa community, which could then even become an attractor of skilled immigrants, who then attract business to Tulsa. In short, it’s easy to see how, under minimally demanding circumstances, labor mobility produces astonishly good outcomes for nearly everyone involved — or is, at least, on balance better that no labor mobility.

And so I issue to Chris Hayes — and social democrats in general — the Lant Pritchett Challenge.

Lant Pritchett is a development economist with a simple, yet radical idea. Massively reduce international restrictions on labor mobility. In short, if someone wants to hire a foreign worker from any country, there is no reason to stop them. In his book, Let Their People Come, Pritchett envisions of guest worker program with literally millions of workers from the developing world migrating to the developed world for work:

The rich countries of the world should actively look for ways to increase the mobility of unskilled labor across their national boundaries. They should do this primarily because it is the right thing to do, because of the enormous potential benefits to people who are allowed to move. The rich countries can allow labor mobility that is both consistent with their own economic interests and “development friendly”—that is, labor mobility benefiting not only the nationals but nations. The economics of labor mobility are simple: Because gains from exchange depend on differences and, in today’s economy, the same worker can make enormously higher wages in one location than in another, the gains from moving are obvious.

It’s impossible to underestimate the gains for those in desperate poverty from working in the developed world. But Pritchett does more than just talk about how fewer restrictions on labor mobility is a more rational or efficient economic policy, he attacks the very notion of looking at policy through the lens of national origin:

Indeed, Pritchett attacks the primacy of nationality itself, treating it as an atavistic prejudice. Modern moral theory rejects discrimination based on other conditions of birth. If we do not bar people from jobs because they were born female, why bar them because they were born in Nepal? The name John Rawls appears on only a single page of “Let Their People Come,” but Pritchett is taking Rawlsian philosophy to new lengths. If a just social order, as Rawls theorized, is one we would embrace behind a “veil of ignorance” — without knowing what traits we possess — a world that uses the trait of nationality to exclude the neediest workers from the richest job markets is deeply unjust. (Rawls himself thought his theory did not apply across national borders.) Pritchett’s Harvard students rallied against all kinds of evils, he writes, but “I never heard the chants, ‘Hey, ho, restrictions on labor mobility have to go.’ ”

The clearest analogue for our current global labor system is that of apartheid. Due to restrictions on labor mobility, billions of people are denied opportunity that those in rich countries have by virtue of their birth. It’s hard to imagine a system that contains more injustice than one that does allow for full labor mobility.

Which brings us to the Lant Pritchett Challenge. For Chris Hayes and anyone who considers themselves concerned with the least well off in society: do you support full labor mobility as envisioned by Lant Pritchett? If not, why not? Do you think having varying labor restrictions based on nationality is justifiable economically, socially or morally? If so, why so?

This challenge — especially coming from a 17 year old high school senior that has never really worked a day in his life — probably sounds arrogant and annoying, and I can’t blame you if you feel that way, but Pritchett’s work is just so exciting that I feel in every discussion of global inequality, poverty and development, Pritchett’s conclusions must either be assumed or explicitly refuted.

PS – As a more practical matter, the restrictions on your ability to read Pritchett’s work are very low. In fact, his entire book, Let Their People Come, is available for free.

For more background on Pritchett , here’s an extensive New York Times profile of him. Will Wilkinson’s blog introduced me to Pritchett , and this post on his work shaped a lot of my thinking