Moral Culpability: Exploitation for Some, Miniature American Flags for Others!

It's not always easy to drill down to one and only one exploiteur in a morally objectionable situation. I admit to some remnant childhood conditioning here. My American History textbooks had lithographs of political cartoons featuring robber barons caricatured as mustachioed villains, standing astride forests, oil fields and iron mines, bags of gold coin strewn haphazard at their feet. The myth is that greedy, rapacious titans of industry oppress and exploit scrappy, resilient, put-upon workers (or so goes the Pulitzer-era journalism), but is this true? Does it comport with basic moral intuitions?

Last week, I had the delightful opportunity to torment some of my dear friends and colleagues with the following thought experiment. The feedback I got was interesting, particularly in that the answer I got from my non-economist friends was closer to the neoclassical response. I'll offer a few reasons why I think this might be the case after I share with you the scenario. Which I shall do now (below the fold):