Self-Defeating Human Rights Policies (8): Modern Slave Redemption and Swords-to-Plowshares

“Slave redemption” is an effort to buy the freedom of women trafficked into prostitution, coerced domestic servants and other modern slaves. In essence, you offer to pay the slave-holder (the pimp for example) a price for the slave that exceeds his or her present and future value.

It’s a very controversial policy. Any individual who acquires his or her freedom in this way is obviously better off, but the policy may set up a self-defeating process:

When you have people running around buying up slaves, you help create a market demand for more slaves… It’s like paying the burglar for the television set he just stole. … The slave traders end up with more money, buying more guns and hiring more thugs to go out and take more slaves. (source)

A very similar process may take hold of another, more recent initiative. Fonderie47 is an

organization that buys AK-47s at above-market-prices in conflict zones and turns them into extremely expensive accessories, all in the name of helping Africa. Apparently, the logic is that this will increase the price of AK-47s, thereby decreasing their pervasive presence in conflict zones. (source)

Of course, and again, the very opposite is likely to occur. Gun dealers will just take in larger stocks of AK-47s – like the traffickers enslave more people – because of demand expectations and higher prices. Then they’ll find out that the guns-to-jewelry initiative can’t follow suit – and perhaps turns out to be a hype – after which the excess guns are dumped in war zones. Furthermore, even if the initiative keeps going and succeeds in bringing down the numbers of AK-47s in war zones, the dealers will just buy other weapons with the extra funds they now have thanks to the initiative.

You can read such stories in two ways, according to your pre-existing biases: either the stories teach us that marketization doesn’t solve everything and that we should tackle such problems with the use of force; or they teach us that we shouldn’t intervene in the market. What I personally learned from them is that people are very creative and human rights advocates are no exception. That’s a good thing, of course, but it’s often no substitute for structural solutions that aim for the root causes of problems.

More posts in this series here.

The Causes of Poverty (43): The Welfare State

Yes, that’s right: the welfare state… According to many conservatives, the welfare state is self-defeating and actually makes people poorer. Welfare and social security (and perhaps even private charity) unwittingly work to thwart their own goal – helping the poor – in two different ways. There’s supposed to be a supply side and a demand side to the so-called “perverse effects” of anti-poverty policies.

Take the supply side first. The delivery of welfare by the government and – indirectly – by the taxpayers is economically inefficient. It burdens the primary suppliers of the necessary funds, namely the individual and corporate taxpayers. Because of this burden, companies and individuals lose the incentive to be productive. If they have to pay large amounts in taxes in order to fund the welfare state, they can’t or won’t create the wealth that is the basis for redistribution. In other words, they can’t or won’t create a rising tide that will lift all boats. Ultimately, a tax-based welfare state will eat itself because it burdens the wealth creators whose wealth it wants to redistribute.

I’ve argued against this rejection of the welfare state before, and I won’t repeat myself here. Suffice it to say that the risks to incentives are overstated, as well as the benefits of trickle down economics. (For instance, companies may decide to be more productive in order to compensate for the losses from taxation).

Let’s now turn to the demand side of the anti-welfare argument. Again, the reasoning is based on incentives that ultimately result in a self-defeating anti-poverty system, but this time it’s about the incentives of the recipients of welfare. The argument goes roughly like this. Take unemployment benefits for instance (one part of the welfare state). These benefits supposedly discourage people from working. And when people don’t work, they fail to gain experience and to nurture certain values – such as discipline – necessary in order to escape poverty. Hence, unemployment insurance makes the recipients worse off.

Or take another kind of benefit: financial support for children born out-of-wedlock. This kind of support also triggers the wrong incentives. It encourages teenagers to get pregnant and it discourages adults to marry. Teen-pregnancies and single parenthood both make it more difficult to escape poverty. Something similar happens with scholarships or affirmative action for poor students. These so-called anti-poverty policies actually incentivize students to enroll in education programs that are above their capabilities, forcing them to drop out of school at some point, and hence forcing them into poverty. And, finally, there’s the argument about welfare dependence: when people get money from the government they tend to settle in their role as receivers and fail to take their lives into their own hands. Again the wrong incentives.

This demand side of the anti-welfare argument suffers from two fatal shortcomings. First, the data don’t (always) support it. For example, it’s not true that generous unemployment insurance leads to higher unemployment. And secondly, it’s classist in the sense that it offers an essentialist depreciation of the poor as a class. The poor, according to the argument, suffer from a series of typical deficiencies:

  • shortsightedness (in the case of the person being tempted by child benefits and ignoring the long-term costs of teen pregnancy or single parenthood)
  • a lack of self-judgment (in the case of the student accepting a scholarship and enrolling in a program beyond her capabilities) and
  • a lack of self-control (in the case of the person settling in dependency).

This classism is not only generally incorrect and unfair, but it also obscures the many other causes of poverty. The poor aren’t always to blame for their own poverty, and the welfare state doesn’t force them to make themselves poor. Moreover, and even worse, this classism can be self-fulfilling.

Also, hasn’t the recent financial crisis shown that wealthy people, especially bankers, are equally short-sighted, self-deluded and lacking in self-control? And even if it’s true that those vices are more prominent among the poor (as is claimed here for example), wouldn’t that be a good argument for welfare rather than against it? If the poor can’t rationally take care of their own fate because they are self-deluded and unable to plan for the long term, shouldn’t the rest of us try to help them?

Self-Defeating Human Rights Policies (2): Child Soldiers

Human rights policies don’t always work out the way we want them to. Almost any significant action has unintended consequences, and in some cases these consequences can turn out to be the exact opposite of what we intended. As Kierkegaard said, life can only be understood backwards, although it must be lived forwards. Some of the best intentioned human rights activism just perpetuates the rights violations it wants to combat, and perhaps even makes things worse.

I now found another example in an interesting paper by Blattman and Beber. The paper is about child soldiering and looks at some of the things governments can do about it. Child soldiers are often recruited by insurgent groups. Governments can decide to increase counter-insurgency efforts in order to stop the insurgents from recruiting children. But this counter-insurgency increases the minimum force size requirement for the rebel group, hence also the rebel leaders’ incentives to abduct children.

Now suppose the government reaction is not to step up hostilities but to develop educational and economic opportunities for children so that children have larger outside choices which make it more likely that they escape from and less likely that they are lured by the rebels. However, according to Blattman and Beber, intermediate levels of development of such choices could push the optimal age of recruitment of child soldiers downwards. And if outside choices increase, the incentives for the rebel group to take over the country also increase. If rebel group incentives increase, the incentives to recruit children also increase.

Types of Human Rights Violations (4): Boomerang Human Rights Violations

We usually see human rights violations are zero-sum: a rights violation is a harm inflicted by one person on another, for the benefit of the former. I mentioned before that this isn’t always the correct way of viewing rights violations, but it’s adequate in most cases. One case in which it’s only superficially adequate is what I would call the boomerang human rights violation: you think that violating someone’s rights may produce some benefit for you, and it does so initially, but the actual and final results mean that you become worse off. There’s the obvious and uninteresting example of the dictator using extreme oppression and causing revolt, but here are some other, more intriguing examples. The first one has to do with the right to work.

Gene Marks is … a small business owner (he sells customer relationship management tools), who is attempting to speak to other small business owners, all of whom, presumably, are also delighted that the potential hiring pool is so chock full of talent desperate to be exploited right now. But one wonders who exactly is supposed to purchase all those products and services from the small businesses of the world, if unemployment creeps up to the 10 percent mark or higher? High unemployment means low consumer demand. Which usually means small businesses end up going out of business, or at the very least, laying off more employees, who push the unemployment rate even higher. And so on. (source)

If, as a “capitalist” (i.e. employer), you want to take advantage of unemployment – or the risk of unemployment – to put downward pressure on wages and workers benefits – and thereby violate workers’ rights (a fair wage is a human right, as are favorable working conditions) – you’ll end up shooting yourself in the foot because neither hard working laborers who don’t earn a lot nor the unemployed will consume many of your products or services. I can see the appeal of the statement that generous unemployment benefits discourage people from finding a job, but such benefits do have advantages that go beyond the mere self-interest of the direct beneficiaries.

An ideal policy … would allow people to collect unemployment insurance indefinitely, and let the unemployed borrow or save money. This way, unemployment insurance would not merely be a financial band-aid letting people take risks on the job market and endure some jobless spells, but a critical source of “liquidity,” allowing the unemployed to keep spending reasonable amounts of money — which in turn helps create demand, something sorely lacking from the economy at the moment. (source)

And here’s another example, related to gender discrimination. In many countries, there’s a son preference: male offspring is considered more valuable than female offspring, for reasons to do with gender discrimination and social, cultural or religious views regarding the proper role of women in society. One of the consequences is the “missing girls” phenomenon. The sex ratios in many countries – India and China stand out – are out of balance. Some estimates say that 90 million women are “missing” worldwide. In somewhat overwrought rhetoric this is called gendercide. Girls are often aborted in selective abortions (a one child policy can make this even more widespread), and young girls are often prejudiced against when it comes to nutrition and health care resulting in higher mortality rates. The son preference and the missing girls phenomenon have their roots mainly in cultural beliefs, but economic considerations also play a role. Some professions are open only to men; girls marry “into” other families and hence can’t continue the family business; there’s the dowry problem etc. However, these economic considerations don’t stand on their own and are often the result of discriminatory cultural beliefs. When we accept that gender discrimination and the will to sustain patriarchy is the cause of the son preference and the missing girls phenomenon, then we are dealing with a human rights violation. And also this rights violation can come back to haunt those responsible for it.

A societal preference for boys here has become an unlikely source of power for Indian women. The abortion of female fetuses in favor of sons — an illegal but widespread practice — means there are more eligible bachelors than potential brides, allowing women and their parents to be more selective when arranging a match. (source)

Rather than cementing patriarchy, the son preference and the resulting unbalanced sex ratios give women more bargaining power. These and other boomerang rights violations are variants of what I’ve called self-inflicted rights violations: people violate other people’s rights, and in so doing they ultimately violate their own rights.