Monday, June 11, 2012

Henderson on Zwolinski Asks Our Favorite Question.

Matt Zwolinski made a great little Learn Liberty video on sweatshops. David Henderson comments at Econlog. Key question:
I basically like the video, although I have one question and one disagreement. My question is about something he said at the 2:00 point. He says:

So long as sweatshop labor is voluntary, even in the weak sense of being free from physical coercion...
That suggests that there is a stronger sense of "voluntary." I don't know what that sense is. Does anyone reading this post know what that strong sense is? Matt?
That sense is euvoluntary, Professor Henderson. Sweatshop labor is not euvoluntary because of a disparity in BATNA. The alternatives to light manufacturing labor in small economies are truly dismal: subsistence farming (particularly when scrabbling to deal with food aid from abroad), begging, or prostitution just to name a few. There needs be no threat of violence by these employers, just the implicit threat to let them carry on with their otherwise unpleasant circumstances.

As a reminder, here are the conditions needed for an exchange to be euvoluntary:

Conditions for Exchange to be "Euvoluntary"
(1) conventional ownership
(2) conventional capacity to buy/sell
(3) absence of regret
(4) no uncompensated externalities
(5) neither party coerced by human agency
(6) neither party coerced by circumstance; the disparity in BATNAs is not "too large"

I hope this helps to answer your question.


  1. This is interesting and I have never heard of quite a few of these terms before. I agree with your stance that it should be voluntary if someone wants to join a sweat shop, mainly because the supply of labor is so high, but I still have a few questions. Why is there a distinction between euvoluntary and just voluntary? Shouldn't voluntary include everything of euvoluntary? What is conventional ownership?

  2. I don't exactly know what euvoluntary is. I just learned that labors join sweatshops because alternatives to sweatshops are worse. And the wage that was paid for a sweatshop worker is less than or equal to the amount he contributes to a firm's net revenue and more than the value of the worker's next best alternative. And the productivity of these workers is low.

  3. Prince, please read Mike Munger's journal article, available at Both of your questions are answered within.

    Thanks for your interest and for stopping by.


Do you have suggestions on where we could find more examples of this phenomenon?