You’ve probably heard by now that 16 Nepali mountain guides, Sherpa, as they are commonly known (though ‘Sherpa’ also denotes membership in a Nepali tribe, many of whom are mountain guides, but not all mountain guides are Sherpa), died on Mt. Everest in a recent avalanche. The guides were moving up the mountain to set things up so that Western adventurers waiting at a base camp could then be guided up behind them.
Expeditions to climb Mt. Everest can cost anywhere between $30,000 and $120,000. Climbing Everest is a notch in the belt of any serious mountaineer, or is an extravagant plume for any bored Western capitalist who wants to be the center of cocktail party attention back home. Everest is not the hardest of all peaks to ascend. K2, in Pakistan, is reputedly the most difficult, though it misses being the highest peak by a few hundred meters. Everyone in the West knows about Mt. Everest, obsessed as the Western mind is with whatever is first in whatever category is at issue. Everest is the best because mountains are categorized according to height and it is the tallest. Climbing Everest, for a Western adventurer, which is to say, for a Western narcissist who wishes to be held in awe by his peers, has cache that K2 just doesn’t, which is particularly true if the adventurer’s peers back home know nothing about mountain climbing. Roughly 3,000 people have now reached the summit on Everest, not counting the Nepali guides, who do it routinely. Less than 300 have so far scaled K2.
The Nepali guides make anywhere from about $3,000 to $6,000 in a climbing season. They take on the bulk of the risks to climbing the mountain. The guides who recently died were preparing a way through the treacherous Khumbu Icefall, generally agreed to be the most dangerous part of the trek to the summit. They were erecting the ladders and ropes necessary to make it possible for two or three hundred Westerners to summit in the short climbing season (essentially for the adventure climbers, the month of May). A guide might risk life and limb through several, even dozens, of passes through the icefall. The bored Westerner will typically pass through it twice.
There would be no Everest outfitting industry promising rich Westerners a chance to summit the mountain were it not for the Sherpa, yet the Sherpa are paid piteously for the risks they undertake. Being a Sherpa, an Everest climbing guide, is surely one of the most dangerous jobs in the world—far more deadly than, say, fishing for crab in the Bering Sea off the coast of Alaska. Yet a crab fisherman can make enough in their short season to live a middle class life in the US for the rest of the year. And there is no one else in the world who can do what the Sherpa do. But the Sherpa make barely subsistence wages, nothing more. The Nepalese government and Western outfitters have conjured a deadly conspiracy for the purpose of exploiting the Sherpa, paying them a pittance to do a dangerous job only they know how to do, while getting rich charging Westerners for the Sherpa’s expertise. The Sherpa have decided to fight back. They are doing what exploited workers have always done, and are en masse refusing to work until they get better pay and benefits, including more than the pittance of about $415 the Nepalese government offered the survivors of the avalanche victims.
The Sherpa suffer exploitation of the much the same character as their lowland brethren in poverty, the Bangladeshis. The Bangladeshi government essentially sells its indigent laborers to Western capitalists, or to domestic capitalists with Western clients. The workers are paid the bare minimum necessary to keep them alive, while little to no concern is paid to their safety. You may remember the horrific collapse, almost exactly a year ago, of a Bangladeshi garment factory which killed over a thousand workers. A consortium of Western clients have made halting progress in at least learning of the conditions under which the garment workers labor, entering accords (that some might liken more to collusion) among themselves to set the problem right. Much like turn of the century industrial agreements to voluntarily clean up factory effluents in the water and air singularly failed without a government jackboot on the necks of the industrialists, the accords haven’t changed much for the life of the average garment industry worker in Bangladesh. If there is one company continuing to exploit the lowest cost conditions, all believe they must. And Western consumers mainly ignore the exploitation, scraping a few cents off every Bangladeshi’s back each time they shimmy into a new pair of skinny jeans.
Just as in the United States today, and in Dickensian England in an earlier age, the capitalists rely on the government to provide a social safety net for their laborers, while reaping the windfall of profits that come from exploiting the workers as if they were slaves. For the capitalists, it is a better system than outright slavery, which would impose ownership responsibilities, and require an investment in the workers which needed protecting. The capitalists in Bangladesh can get all the benefits of slavery, that is, extremely cheap laborers who can essentially be treated as draft animals, without the costs of ownership, like food, medicine, housing, etc., that even farm animals and pets receive. It is much better to be a dog in the United States than it is to be a garment factory worker in Bangladesh, or for that matter, than it often is to be a food service worker in the US. The capitalists, obsessed over property rights and the virtues of an ownership society, refuse to own the problems created with their exploitation. Their exploitation of workers in this manner is every bit as much a free rider problem as belching smoke stacks once were in the age of industrialization.
It is unfortunate, but hardly surprising in this Age of Intentional Stupidity, that the problem of exploitation of workers is couched, at least for Westerners, in the vocabulary of inequality. Disparity in income is an effect, not a cause, of what is going on. The cause is the capitalist’s relentless quest for cheaper inputs, including labor, in creating his goods and services for markets. His quest accrues generally to the good, as it fosters a compulsion to efficiency in supplying goods and services to the market. But when labor is treated as indifferently as machines, capitalists are snugging tight the noose with which they will hang themselves. Capitalists don’t produce goods and services to supply machines with the needs and wants of life. They produce goods and services to supply human beings with the needs and wants of life. Consider a bit of Kantian moralism: If all capitalists treated their employees like the capitalists in Bangladesh treat theirs, how then would the market for clothing fare? Indeed, it would be a fraction of itself. Without rich Westerners to buy the clothes produced on the cheap in Bangladesh, there would hardly be a need for a clothing industry. This is not a sustainable model. As factories and services are farmed overseas to exploit slave wages allowed by governments willing to pimp their populations to Western capitalists, the number of rich (as always, a relative value) Westerners with jobs who can afford to buy the output from abroad will steadily decline until there is little demand to supply. The new clothing industry workers can’t afford what they produce, and neither can the laid off Westerners they displaced. The capitalist is left with huge amounts of excess productive capacity. Collapse is inevitable, but not because of income equality, but as a feature of income and wealth concentration that capitalism inherently fosters through its quest to find the lowest costs.
The foregoing scenario was a part of each of the last two significant economic contractions—the Great Depression in the 1930’s (from which the nascent labor movement became firmly established) and the financial crisis and recession of late. In the latter instance, Western workers, particularly Americans, having endured stagnating wage rates for decades due in some measure to the exploitation of overseas workers, could no longer afford their lifestyles without becoming heavily indebted. When subprime mortgages started going into default, it became abundantly clear that they had got outrageously overleveraged, and couldn’t pay. Just a few bad mortgages revealed the utter rot at the core of the economic system. The capitalist exploitation of workers across international boundaries that arose with post-Cold War globalization ended up destroying much of the wealth, at least for a time, that capitalists had managed to accumulate. The lesson should have been to share the wealth; to quit exploiting, and to try partnering with employees. Instead, they doubled down on exploitation the globe over while searching for efficiencies that quantized human laborers as little more than machines made of skin and bone.
Marx understood that capitalism was an inherently unstable system because of the concentrations of wealth that it fostered. It is along the continuum of concentration where accumulations of wealth become too vast to defend that capitalism fails. But the wealth is so concentrated because the competitive markets in which capitalists operate practically demand the exploitation of workers if exploitation is possible. It is the job of the capitalist government to rein in the capitalist impulse to exploitation, to make the capitalist pay full value for the inputs of his operation, be they human or environmental. Unfortunately, it is too often the case that governments don’t oversee and rein in their capitalists, but become addicted to the cut they get of the profits and end up instead being overseen and reined in by the capitalists.
Adam Smith taught that the invisible hand of the market will lead market participants to do things which accrue to benefit the public at large, all while following their selfish impulses. The baker will bake his bread for his own selfish aim of making money but in the competitive process of doing so bread will be supplied to the public at the least possible cost. All that is well and good, but Smith did not envision the impulse the baker would have to lower his costs by exploiting the cheapest available labor, even to the point where the wages paid bakery workers impaired the overall demand for baked goods.
There is a better answer. It simply involves including the workers as valued partners in the enterprise, paying them a cut of the value they help to create. All the high value service industries, e.g., banking, medicine, law, etc., consider their employees to be partners in the firm’s wealth creation and pay them accordingly. Even restaurants do it, at least with the wait staff. Enlightened capitalism means the capitalist understands and rewards the value to his company that dedicated employees provide. The lowest income-statement cost is not always the lowest cost. But enlightened capitalism won’t happen on an international, wholesale basis without which governments get involved. So long as foreign despots willingly sell their laborers’ efforts to capitalists who offer the highest bribes (of some form or another), while other governments protect their laborers, capitalists will gravitate to places that promote exploitation. Then the answer becomes heavy tariffs for the importation of goods and services from countries allowing the exploitation of their workers.
Pope Francis has the right idea about the economics of exploitation and how everyone is better off when all people are treated humanely, as his politico-economic observations in Evangelii Gaudium make clear. Germany, arguably the strongest economic system in the world over the last decade, has worked a Wirtschaftswunder (economic miracle) through a system which treats employees and unions as partners in the economic organization, not as antagonists or simply inputs to the machine. Germany is a political state that understands the purpose for which an economic system is contrived.
The simple reality is that everyone is harmed when the few exploit the many. In the end, Marx was right, any system that does so is doomed to instability and self-destruction. It is not the case, as Thomas Piketty, a French economist being hailed by certain left-leaning political economists as the new de Tocqueville, argues in his new book, Capital in the 21st Century, that over the long run capital can achieve higher returns than labor, thereby increasing income and wealth inequality. Concentrations of capital ultimately yield to diffusions of capital, whether violently, as in the Bolshevik Revolution or with the Maoists in China, or relatively peacefully, as during the Great Depression and post-War era in the United States. Growing inequalities in wealth and income, i.e., eras when capital returns exceed those of labor, inevitably revert to a more equal distribution. We are all in this together, no matter how badly a hubristic Western capitalist might believe his excess wealth proves his superiority. And contrary to Piketty, it matters not a lot, in this globalized economic system, that one or more sub-economic system, particularly of fully developed economic systems, is unequal or not. What matters is the whole system. Exploitation anywhere is tantamount to exploitation everywhere.
The Sherpa probably won’t have much trouble asserting their rights to humane treatment. After all, they are the only people who can do what they do, and what they do is in high demand, and will be, so long as obscene wealth accumulations make life for Western capitalists and their progeny dull without which they indulge in a few narcissistic adventures. Bangladeshi garment workers, on the other hand, enjoy no such advantage in bargaining power. They will continue to be exploited so long as their government, and the governments of the countries in the West where the goods they manufacture are sold, turns a blind eye to their plight. Nobody will pay them according to the value they contribute to the enterprise, nor take care to see they are kept reasonably safe and secure unless some economic pressure is brought to bear, which could likely only come from Western consumers. If the stupid kids in Occupy Wall Street, stomping around bitching because investment bankers make a lot of money and they don’t, had really wanted to do some good, they’d have taken up the plight of foreign workers the world over who the 21st century labor and employment system is exploiting in unimaginably cruel ways.
But there is little doubt that if wealth accumulations and income concentrations that accrue as a result of worker exploitation continues apace, there will eventually arise a movement, or several, of exploited workers seeking humane treatment. The fact there are so many more of them than there are capitalists is what makes the present path of the global economic system unsustainable, and that which can’t go on forever won’t.