The Economics of Exploitation

The Economist: Cultural economics focuses on how societies earn and thrive from the land, and in terms of labor, most fall under several economic modalities. All appear to involve exploitation.

There is a dichotomy within my ancestral families.  My mother’s side has ties to slave ownership while on my father’s side we find post-Civil War carpetbaggers. Contemplating these disparate realities, I see a common thread—human exploitation of one type or another. In the case of slavery, the exploitation is obvious. With carpetbaggers it’s more subtle. Being a carpetbagger has become a pejorative term describing an outsider filling a political or economic void unscrupulously at worst; or taking advantage of an opportunity without sharing the bounty among local participants at best.

Cultural economics focuses on how societies organize to earn daily bread from the land, and hopefully thrive in futures defined by their cultures. In terms of labor, most participants historically fell under one of several economic modalities. All appear to involve exploitation. These include forms of serfdom, peonage and slavery. Invariably, serfdom involves social hierarchy where people are born to a certain status and someone, or a small group, is in charge (typically elders or lords). In the best of circumstances, the rulers have a reciprocal obligation to care for servants. Then there is peonage where through some means or another people owe those they work for. If fortunate, the debts are paid, thereby freeing the peons, as was the case with indentured servitude. Then there is slavery, which typically arises when one tribe conquers another tribe and forces them into labor; or sells the conquered people to others who pay a price based upon the expected productivity that can be gained over time from the slave labor. In the best of cases some slaves are treated reasonably by their captors.

What happens when labor under these modalities achieves freedom? Sometimes the labor migrates to other areas merging with new groups. In other cases the traditional relationships persist, except a wage is paid in one form or another, such as tenant farming. In our modern age I sometime think the lord of the manor has been replaced by the state, and some degree of upward mobility is afforded lower classes. In other cases, the “slave wages” paid are insufficient to incentivize work. The modern saying, “I owe, I owe, so off to work I go,” sounds like postindustrial peonage. These are all “free” reciprocal relationships among people and economic entities, and exploitation is subject to debate.

Unfortunately, extreme exploitation exists today in the form of human trafficking, which is commonly defined as “the illegal trade in human beings through recruitment or abduction by means of force, fraud, or coercion for the purposes of forced labor, debt bondage or sexual exploitation.” Based upon excerpts from Eric Williams’ “Capitalism and Slavery,” it appears the recruitment process has not changed much since the 1500s and 1600s when many poor people in England and Ireland were trafficked to the New World. Modern slavery frequently starts with desperate people such as migrants and runaway youth looking for any opportunity only to find themselves recruited by traffickers. In the United States, two-thirds of reported victims are U.S. citizens, with women and girls representing the majority through sex trafficking.  Approximately 25% of victims globally are children. Forced labor is more common among men and boys. The most common industries where human trafficking is found include construction, hospitality, manufacturing and agriculture. Globally, a significant percentage of chocolate and palm oil is produced with slave labor. Overall, estimates range from 0.3% to 0.5% of the global population (21 to 41 million people) is held in some form of bondage. According to the National Hotline for Human Trafficking (1-888-373-7888), Nevada has the highest rate of reported U.S. cases; Colorado ranks 22nd at three per 100,000 people.

Exploitation goes hand in hand with opportunism. This can be challenging, as being opportunistic to advance our individual wellbeing is a solid American value. The slave-owning branch of my mother’s family tree goes back to Richard Lee, who arrived poor (possibly as an indentured servant himself) to Virginia in 1639. Through England’s colonial land grant process, which rewarded freed servants for living on Indian lands, he was able to accumulate 15,000 acres in a short time. At first his workers were indentured servants, but when economic challenges and crop failures arose in the 1650s, Richard Lee switched to slave labor from Africa. According to Michelle Alexander in her book, “The New Jim Crow,” this was at a time when indentured servants and slaves were joining forces to rebel against planters, and Virginia passed laws to segregate the two groups. Given my father’s family history, I’m grateful my parents were ignorant of the past as my mother once exclaimed her family would never have allowed the marriage had they known he was descended from carpetbaggers.

While we have no control over the past, we can work to understand it from multiple perspectives. More importantly, we should work diligently to improve the future by confronting blatant exploitation—even when it is economically or politically convenient to look the other way.



Tom BinningsTom Binnings is a senior partner at Summit Economics in Colorado Springs. He has more than 30 years of experience in economic and market research for public policy, strategic planning, business analytics and project finance. He can be reached at:



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