One of the oldest and perhaps the most misguided myths about capitalism is the notion that businesses and factories exploit the poor. Among the various anti-capitalist propagandas being touted by the Marxists, one of the most striking is the sad image of a sweat shop chock full of children slogging away at minimum wages for big companies and corporations such as Nike. Their argument against these big corporations and their sweat shops is simple and straightforward; sweat shops exploit these children to rake up huge profits, so they need to be shut down.
Arguments such as these are a staple of the pro-welfare argument. The oppressed, the downtrodden and the poor need protection and welfare to help them rise up and stand at the same level as us. The question that irks me here is whether the welfare programs set up by the government will really work or will the tax payer’s money just end up again in the hands of middlemen and government officials.
What we need to understand here is that government welfare handouts are not going to help these people. What they really need is opportunities. This is what will actually help them grow. Coming to sweat shops, how do you think shutting them down is going to help those children? They need those wages and closing down these sweat shops will take away the only opportunity they have. They might just as well starve to death, or worse – be forced into more exploitative professions, like girls being pushed into prostitution.
The answer to this conundrum lies in facilitating rapid growth in India’s per capita income, rather than condemning and penalizing sweat shops for providing opportunities. An increase in the per capita income will help parents send their children to school instead of sweat shops to earn daily wages. This is what happened to the sweat shops in the western world and this is exactly how sweat shops are going to end in India!