They Are Selling Themselves Into Slavery

~ Laura

Mothers in Sri Lanka move continents away from their children in Sri Lanka to become maids in the Gulf States where they are subject to abuse and torture. They must watch wealthy women’s children, while they own children are left to fend for themselves. Poverty has put a gun to their head.

Will someone explain to me why unregulated capitalism is a beautiful thing?

Published by Laura

24 thoughts on “They Are Selling Themselves Into Slavery”

  1. Well, neither Sri Lanka nor the Gulf States have anything that could remotely be described as “unregulated capitalism”. But more basically, presumably these women are neither terminally stupid, nor anxious to work away from their children. Given that, they’re probably moving to the Gulf States to become maids because they think this is better for their children than what would happen if they stayed home (my best guess would be malnutrition or starvation). Some sort of law preventing people in the Gulf States from hiring them as maids would thus condemn them and their children to some fate which is worse than being a maid in the Gulf. I don’t see how that sort of regulation would be a good idea.
    Now, one could argue that people should give more of their money to help poor people in the developed world. But that has nothing to do with either capitalism, or regulation (except for the fact that capitalism is what generates the money to give them). On the private side, there is no country, regulated or not, which mandates that its citizens donate money to the poor in other countries. On the public side, the decision of how much to give is a political decision that has nothing to do with the regulation of capitalism.
    There’s a general assumption that failure to give more money to the developing world is simple greed. Undoubtedly there is some element of that, but there is also a strong element of futility in sending money to many parts of the developing world; without the institutions to support it, aid does little but enrich the corrupt government officials who control the money. People have been trying to solve the development puzzle for 50 years, but if you read the literature, you’ll find that little of that failure can be attributed to “unregulated capitalism”
    In fact, there’s a strong argument to be made that “unregulated capitalism” is what the developing world needs more of. Poor countries have a lot of historical problems, but the biggest obstacles to their development are things like economic controls, over-powerful governments, and endless and conflicting regulations that intrude into every corner of economic life. These serve to enrich the government or the corrupt bureaucrats who help people evade bad law at the expense of the populace, and make economic activity above the level of subsistence farming extremely hard to sustain. Most of the decrease in poverty in the world over the last ten years have occurred because China and India began eschewing regulation in favour of capitalism.

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  2. thanks, Megan.
    While there may not be unregulated capitalism within the Gulf States or Sri Lanka, certainly on an international level, we have a system of unregulated capitalism. There is no global force emposing limits or laws (or enforcable ones at least) on the individual nations. No global force thinking through long term, collective goals. It really is an excellent way of looking how individuals behave in a pure capitalist system. No?
    What you have going on in Sri Lanka is not only individual women sacrificing themselves for their kids, but it is the government itself that is selling their women. Sri Lanka has nothing else to sell to other nations, but its women. It arranges for maid classes for their women. It hides the abuses. It provides no protection for them. It needs the capital that they bring home. In order to compete with other countries for the maid/slavery business, it purposely hides the seriously maimed women who return home after severe beatings.
    Is this situation better than starving? I don’t know. Your call.
    And it’s also really bad business. When these women leave, their children are forced to fend for themselves. Many are then targets for child abusers. The future of these countries is being traded for a couple of dollars.
    What to do about this situation? perhaps that’s for another post.

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  3. Megan took the words out of my mouth. Since when are the Gulf states examples of “unregulated capitalism?” And laws restricting the mobility of people have a pretty strong record of counter-productivity.

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  4. Laura: It isn’t that these situations aren’t terrible. It’s that the solutions to the problems involve better policing and more economic growth, which will accelerate the day when these women have the power to make freer, more fulfilling choices.

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  5. Some unregulated capitolism IN Sri Lanka would help too – the amazing stories of Grameen Bank micro-lending in Pakistan enabling women to make their livings at home are worth heeding, maybe the model can be exported there. The De Soto work on the value of being able to get real, transferable title to your assets. A lot of problem comes in countries you can’t go into business without permits which take bribes, and you can’t get the money to start up.
    The women in Sri Lanka are making a reasonable response to their desperate situation, I think. Why is their situation so desperate? Partly because of developed-world trade barriers to their potential exports, now somewhat coming down. Partly because the situation at home is rigged to keep local elites in power.

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  6. I wouldn’t call what happens globally unregulated capitalism either, which would, as another commenter pointed out, imply free movement of capital and labour. Most governments restrict both; those restrictions are often a source of, rather than an alleviant to, poverty. They also usually try to reduce competition, another pillar of capitalism.
    There’s an implicit assumption in your post that “regulated” means “regulated in such a way that helps people”. But it seems to me that the history of most regulation (yes, even in developed countries) is that it helps in-groups at the expense of out-groups, not the society as a whole. This is not necessarily because those proposing the regulations mean to set things up that way. I sincerely doubt, for example, that the folks proposing rent controls in New York started out saying “Hey, what if we set up a system that shoved poor young people out of the housing market while providing unnecessary subsidies to middle class professionals with connections?” Yet that is what they created.
    You blame the government of Sri Lanka. Perhaps they are evil. But perhaps Sri Lanka, like those mothers, finds itself in a terrible bind: a desperately poor country with a large number of mouths to feed is trying to increase the only export it has (labour) in order to feed all those hungry people. I don’t know that this is the case; I have no doubt at all that at least some of its members are simply personally profiting. I would certainly rather they tried to alleviate poverty by deregulating at home, but that’s a long term process, and those women and their children are hungry *now*, plus anyone who’s ever studied the proud history of the US Mohair Subsidy knows how hard it is to reform even the stupidest programmes that benefit even the tiniest special interest groups.
    On a visceral level, it breaks our hearts that Sri Lankan mothers have to leave their children in order to provide for them. It should. We are unconscionably rich, considering how many people in this world exist in a daily struggle to keep their bellies away from their backbone. But we do not help the poor by closing off the heartbreaking choices they make, for surely the choice they made is better than whatever denying it would condemn them to. We help the poor by giving them better choices. Capitalism, mostly unregulated, seems to have the best record of doing this.

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  7. I’m not sure that we will ever come to an agreement about our perceptions of regulation. The glass half empty thing. For every program that you pointed to that didn’t reach its target audience, I could point to another that did or at least got to enough of its target audience to satisfy me. For every middle class loophole that you found, I would just say, “okay, then make it better. Plug that hole and try again.”
    I guess I just don’t have enough confidence that without some human control, capitalism will float all boats. I don’t believe that after a country endures a period of human slavery, it move to the next historical stage of exploitation in a Nike factory, and then it will graduate to the final historical stage of pure capitalism with flat screen TVs and Sketchers for all. I don’t see how depopulating their country of mothers, Sri Lanka will improve its economic situation in the long haul. It’s just digging itself into further poverty.
    I’m not a communist or anything. Capitalism is fine and good, but we have to have some control over events. We can’t sit back and let wrongs occur and just assume that progress will improve things.
    But what do we do? I completely agree that we shouldn’t impose controls on Sri Lanka preventing them from exporting the maids at this time. And I agree that the poor need more choices. So, where are these choices? The magic market hasn’t handed them any choices right now. I don’t any envision any showing up in the near future.
    Can we help nudge things along there to give them more options? Regulate not by imposing laws, but by sending over smart ideas with money funneled into the right areas. Regulate the Gulf States not by imposing restrictions (what good what that do?), but by embarrassing the hell out of them. Big signs outside their embassy should cite the number of women killed while employed as household servants. And the US should decide who its political and trade friends are not only by what they can offer us, but also by their human rights record.
    Why should we improve the dire situations of countries like Sri Lanka which are so desperate that they ship off the mothers? Well, if the sheer injustice of the situation doesn’t get you, then how about the fact that those countries are breeding grounds for terrorism.

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  8. Sri Lanka is a breeding ground for Tamil terrorism, which doesn’t pose much of a problem for the US. The Gulf States are indeed breeding grounds for terror, but I don’t see how trying to embarass them into giving up their maids will quench that.
    As I tried to say above, I think that we should help Sri Lankans get out of poverty not because it’s in our self interest, but because it’s the right thing to do. But having spent a fair amount of time writing about and reading about development economics, I’m not sure what the best way to go about this is. The evidence is that if countries lack adequate institutions, aid is at best worthless, at worst destructive to the environment and social structures–and generally serves to further entrench the awful governments that keep their citizens poor.
    Aside from some environmental and financial regulations, I’m hard pressed to think of any instance in which regulations–as opposed to cash transfers–have even arguably served the general public rather than a small group of entrenched insiders. I’d be happy to trade regulatory stories with you; I’m pretty sure that you’ll run out of successful regulatory stories well before I’ve reached the middle of the economic regulatory alphabet that runs from airlines to zoos. It’s all very well to say “plug that hole and try again”, but the economic fact is that most attempts to plug loopholes create more complexity which further helps to entrench insiders who understand the regulations at the expense of outsiders who don’t. To look back at rent control, decreasing the supply of housing, lowering the quality of the housing stock, and raising prices for those who are outside the system are inherent, inevitable qualities of any system of housing price ceilings. Telling an economist to design a system of rent control that does not include those qualities is like telling an engineer to design a bridge made out of ice, but with the strength and stability of steel.
    But that’s neither here nor there, really. If you want to blame “unregulated capitalism” for the problem of Sri Lankan women leaving their children to work as maids, you must first, prove that the problem is capitalism. The problem in Sri Lanka is emphatically not capitalism, which Sri Lanka doesn’t have. The problem is grinding poverty, which it does. The abuses you highlight–the Sri Lankan government misleading people, the Kuwaitis getting away with killing their maids–are not economic failures; they’re political failures. Yet you blame them on the economic realm, and then demand that a political system which is producing the abuses intervene in the economic system in order to stop them. Even if there were some action which *could* be taken (which I can’t see, given that the economic system doesn’t seem to be the culprit), it’s obvious that it *wouldn’t*–you’re asking the fox to guard the henhouse. Even if we tried to intervene, we would have to work with these governments. If you look over the history of the UN, the World Bank and the IMF, you’ll see that international institutions are basically completely ineffective at inducing change in local political systems.
    It’s not enough to just say “do something!” If you think that the problem is “unregulated capitalism”, then you have to propose some regulation that would actually make the problem better. I have an idea of what would–economic development in Sri Lanka–but I also have a pretty strong sense from the development literature that this will not happen until the government changes. If it does, then the Phillipines and Mexico indicate that mothers working abroad as maids will actually provide a pretty good economic boost through remittances of foriegn capital (I don’t know whether or not this is worth the cost to the family, but that’s a decision I think the women should make). And if it doesn’t change, at least those mothers will be feeding their children, something that other parents in Sri Lanka currently have a hard time doing.

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  9. Thanks for coming back, Megan. I’m enjoying the debate. I didn’t mean to imply that you were enured to the injustice of the situation in Sri Lanka. Poor choice of words on my part.
    I still do think that Sri Lanka’s case mirrors what we see on the local level. Without someone stepping in to make the make capitalism more humane, someone always ends up as the prostitute. The prostitute might on the street because of drug dependency or stupidity, but her situation still requires attention. Do we write her off, because she’s mostly likely to spend any financial help on crack? I wouldn’t.
    re: regulation always helps the elites. Maybe. But deregulation helps the elites, too. They’ve got the system in the bag, don’t they?
    Totally agree that Sri Lanka really needs eco. dev., and a more stable gov’t. Of course, that’s better than any handout.
    Maybe the issue is that I think about regulation in a broad way. Regulation doesn’t have to mean a law that restricts activity. Regulation can mean positive incentives or even just energy focused in a particular area to help bring about change. I think that energy needs to be spent thinking through options to help countries like Sri Lanka. That we can’t have blind faith that wheels of economic progress will fix things on their own.
    (I would love to debate rent control. I think that removing those controls would just raise the rents for everybody. In my old neighborhood in Washington Heights, the only way that the Dominicans could stay in the newly gentrified area was through rent control. No. No. I don’t want to go down that tangent. I would love to read some posts by you on this topic.)

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  10. I’ll leave off rent control after saying this: the argument about rent control is not that it doesn’t help any poor people; the argument is that it hurts more poor people than it helps. And i agree that the short term effect is for rents to rise, because there’s a long lead time on housing development, particularly in New York–but that lead time is primarily due to housing regulations, and rent seeking by local community members who seek to block development to benefit themselves in terms of higher property values or better amenities, at the expense of newcomers to the housing market.
    The prostitute . . . we are rich; we are highly regulated; we still have prostitutes. Some of them are hopelessly screwed up, selling themselves for drugs or food; having worked in a homeless organisation, it’s my opinion that those are people who are resisting society’s help. Then there are high-class prostitutes, who may have been sexually abused, or may just be in it because there is no way they could make that kind of money doing anything else. I find prostitution very sad, but no American prostitute is doing it because she has no choice, unlike many women in Asia and Africa. Prostitution exists in Europe, where it’s even harder to argue that the problem is unregulated capitalism. As far as I know, there were few prostitutes in the Soviet Union (though even there, the number was non-zero, even excluding the women who sold themselves to party members for access to higher-class goodies) but the cure is worse than the disease. The state control in one’s life needed to make prostitution a poor economic alternative is more soul-crushing, for more people, than the prostitution. It is a fact of life that some people will make sad, bad choices, but I don’t think it’s unique to unregulated capitalism, even if they are seeking money–any more than I think that armed robbery is a feature of capitalism.
    I too would like to see more focus on development. But if you haven’t read them, I suggest reading a couple of books on development economics–William Easterly, Amartya Sen, Jeffrey Sachs and Hernando de Soto–along with Sebastian Mallaby’s fantastic biography of James Wolfensohn at the World Bank, and Paul Blustein’s recent book on Argentina and the IMF. I know I’m repeating myself, but the problem is not world capitalism; it’s Sri Lanka’s government and local institutions, and Kuwait’s government and local institutions. There are a lot of smart, committed people who are struggling daily to figure out how to build the institutions that economies need, often despite hostile governments. It’s an agonizingly slow procedure. If we don’t figure that out first, we can do real harm. Aid, for example, has arguably propped up Robert Mugabe, who is now doing his level best to completely destroy Zimbabwe’s economy, with absolutely tragic results for his people. The agony should be real for us, and it should spur us to action. But even if we find good, useful actions to take, we have to recognize that it will be years, perhaps decades before a country like Sri Lanka gets to teh point where it can stop exporting labor in exchange for remittances. India, after a decade of stellar growth, has a per-capita GDP of about $900 a year (purchasing power parity). People are still hungry and poor there–yet India alone has accounted for something over a third of the decline in the global number of people living on less than a dollar a day.
    There’s something that William Easterly said in his book that really resonated with me: that people wanting to know “what makes nations poor?” were asking the wrong question. Sri Lanka is the natural state of humanity. It is the rich nations that are the anomaly, which is why it is so hard to help others attain our wealth.

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  11. Megan has forgotten more about this topic than I have ever known, but I’d just interject re: your comment about sweatshops is that – as terrible as it sounds – there are plenty of examples of nations progressing from the sweatshop stage to a much higher level of prosperity, despite widespread skepticism of the possibility of such progress. (South Korea is the best recent example.) So can we get behind a consensus that what Sri Lanka needs is more sweatshops?
    And re: your comment
    “regulation always helps the elites. Maybe. But deregulation helps the elites, too. They’ve got the system in the bag, don’t they?”
    Well, if they’ve got the system in the bag either way, why bother? The question is which is more likely to help the non-elites – regulations wholly shaped by the elites (you’re a political scientist; who shapes Congressional and/or regulatory action in this country? And let’s not get into “regulatory capture.”) or deregulation that at least presents the possibility of new power centers outside the elites’ control?

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  12. “Sri Lanka is the natural state of humanity.” That’s a downer, but probably true. I haven’t read Easterly, but I think I’ll go pick it up now.
    I think there is a lot of common ground between us. Both of us are naturally repelled by extreme poverty and how poverty can force people/nations to make some impossible choices, ie. slavery or starvation. Even on a smaller scale, I think that both of us believe that the poor need to be able to afford housing in American cities.
    That’s all I really care about. All I care about is the ends, which is to improve the situation of those who need it most. I’m flexible about how you get there. If you can show that eliminating rent control will provide more affordable housing for the lower and middle class and create mixed income neighborhoods, then I’m with you. I’m skeptical, but I’m with you. I think that vouchers have the potential to help inner city kids. I’m not wedded to the economic method. Sometimes one method works and sometimes another works. You need to experiment, test, study, and try again. There must be some human agency involved in deciding when to impose regulations and when to let go. We also have a moral obligation to keep trying no matter how difficult it is turn the Sri Lankas and the Zimbabwes of the world into livable places.
    Can’t. Help. Myself. By eliminating rent controls, that wouldn’t stop the local residents from protesting new development. That would stay constant. Also add to the barriers to housing development in NYC: the high cost of building in Manhattan, the lack of space, the teamsters, and the competition to use any free space for other uses, ie. football stadiums. Rent control seems to me to be one of a huge list of variables that explains the lack of new development.

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  13. Megan has forgotten more about this topic than I have ever known, but I’d just interject re: your comment about sweatshops is that – as terrible as it sounds – there are plenty of examples of nations progressing from the sweatshop stage to a much higher level of prosperity, despite widespread skepticism of the possibility of such progress. (South Korea is the best recent example.) So can we get behind a consensus that what Sri Lanka needs is more sweatshops?
    And re: your comment
    “regulation always helps the elites. Maybe. But deregulation helps the elites, too. They’ve got the system in the bag, don’t they?”
    Well, if they’ve got the system in the bag either way, why bother? The question is which is more likely to help the non-elites – regulations wholly shaped by the elites (you’re a political scientist; who shapes Congressional and/or regulatory action in this country? And let’s not get into “regulatory capture.”) or deregulation that at least presents the possibility of new power centers outside the elites’ control?

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  14. Laura: you’re correct about rent controls being just one of many factors that have reduced the New York city real estate market to the pathetic state it is in now, but that’s no reason to support them. Just your experience with Manhattan real estate should be an eye-opening experience about the real world results of heavy government regulation: expensive, substandard housing, lack of supply, a reluctance to move, rigid restrictions which have the unintentional effect of preventing certain renovations of apartments, etc.. The list goes on and you are just as familiar with these effects as anyone. Please draw the conclusions from your own experience.
    Check out this attached definitive article by John Tierney.
    http://eric.home.sprynet.com/Rent%20Control%20by%20Tierney.htm

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  15. I’m kind of stunned that none of your other commenters has noted this article from today’s NYTimes: http://www.nytimes.com/2005/05/12/business/worldbusiness/12cambodia.html? – broadly, the theme is that Cambodia is holding off China in a niche in the clothing business by selling clothes made by workers getting a good deal (for Cambodia, at least) and that they are competing with other LDCs for garment business by allowing unions and trying to limit government corruption and bribes.
    The International Labor Organization seems to be having a positive effect, too. All the old dinosaurs are in there, actually doing what they are supposed to. A developed-world shame campaign with some effect. Can this be generalized?
    I can’t resist my own scales-falling-from-my-eyes story about rent control, a landlord I knew in Cambridge Mass told me that two of his Harvard MBA student tenants in a rent-controlled apartment were giving him advice on how to speculate in krugerrands… Yes, some poor people are helped, but the efficiency is dreadful!

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  16. Thanks, Dave, for passing on that link. Heartening info.
    re: rent control. Yeah, there are probably many people taking rent controlled apartments that don’t deserve it. I’ve heard that Paul Simon has one of those placesd on the upper West Side. But I honestly believe that more benefit.
    Jult, based on own personal experiences in a city neighborhood that underwent gentrification, if rent controls were lifted, entire families of Dominicans would have been forced out over night. They have lived in rent controlled apartments for years and pass them on to family members. Their $300 per month one bedrooms would go to $1,500-2000 over night. They would be forced to move to another community where nobody spoke Spanish or double up families in studio apartments in Hunts Point, Bronx.
    Would getting rid of rent control lead to more development which would lower the costs of apartments for everybody? I seriously doubt it. The obstacles to building reasonable priced apartments in NYC are too numerous.
    But, like I said, I think it is a mistake to get too wedded to one approach. I’m up for experiment. I would be in favor of removing rent control for one location in the city to see what would happen.

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  21. Re: all the previous
    If the market doesn’t decide–than WHO DOES? And what standards will be used to make those judgements–and WHO EXACTLY will decide the form, shape, scope and size of the standards? As a political scientist you should be able to see that we are back to the usual suspects here, aren’t we?
    As far as subsidized housing goes, if one throws enough money at a problem one can build lots of ANYTHING–but the question is, are there even more pressing demands for those dollars else-where and should it be the tax-payers dollar in the first place.
    As far as the morality of it goes, why is it a God-given right that ANYONE “deserves” to live anywhere–and do so on other people’s money. I personally think that because of my good looks, native intelligence, and advanced degrees that I “deserve” to live in a Bill Gates-like 40,000sq.ft pad (sorry, better get current:”crib”) in Rio, but somehow I don’t think my neighbors are going to open up their wallets anytime soon. Systems wherein I can manage to coerce others so that I can indulge myself in that way without having to pay for it are called “totalitarian.” Or “highly authoratarian” at the minimum.
    If I would tell you that we could solve the housing needs of the poor overnight (and cheaply as well) by putting them all in quonset huts at the edge of town where they live, I would be accused by many of setting up “concentration camps.” People would keel over backwards fainting dead away. So why is it not morally acceptable to do THAT, when I myself lived for three years in a Quonset-hut on an Air Force base in England as a highly trained, combat experienced (at tax-payer’s expense) officer? Right along with several hundred other fellow officer’s up to the rank of LtCol. Why are such living conditions considered by society to be acceptable for US, but NOT for grade-school drop-outs earning the minimium wage or on welfare? When you can can give me an answer to THAT moral question (as opposed to the practical question of what the out-come of any given political process dictates) than perhaps the dialogue can be advanced. That is, of course, unless you would agree with me that Quon-set huts are perfectably acceptable(I’m talking theory here, I well realize there are major real-estate “footprint” problems in metropolitian areas,etc.)

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