First lets take a look at a seemingly innocuous part of his claim. People would stop buying products they discovered were made by a company using child labor. I certainly wish that this was true, and I will get to why I don't think it is in a moment. What really concerns me about this statement is the "discovered" part. When I read this it tells me that this person, and people like him, fully acknowledge that child labor will become a part of the economy if we leave things up to the free market. They also realize that it won't be stopped within any particular company until it is discovered. I want to know just how it will be discovered? If child labor laws are repealed the government would have no interest in inspecting factories for child labor. If they found it they couldn't stop it because there would be no legal reason to stop it. It would be difficult for consumers to discover child labor issues because the general public isn't normally given free reign to wander around a working factory or distribution center. So if we assume child labor will exist until it is discovered, and we know without laws to regulate child labor it could prove to be more difficult to discover, how is it that child labor won't be a problem? Oh yeah, the market will fix it!
Let's venture back into reality for a moment. Libertarians and tea partiers might be able to argue that free market principles are good for the economy (it would be a false argument not supported by facts but that is something for a different article) but they really can't make any sort of a reasonable argument that the free market supports any level of social justice. The free market is about profits and meeting demand and it will meet that demand by any means necessary. One of the primary demands brought by consumers to the market is the demand for lower prices. Let's say you walked into a store and found a pair of pants that you really liked. You liked the color, the way the material feels, and the fit but the pants were priced at $75.00. Instead of buying them you decide to continue shopping and wind up going into a store across the street from where you found those pants. In this store you find a nearly identical pair of pants but from a different brand. The color, feel and fit are all the same but these pants are priced at $40.00. I think it is pretty safe to assume that most people would buy the less expensive pair and be happy to save $35.00. I assume this because while Walmart has thousands of locations across the US Neiman Marcus has less than 100 even if you count all of its outlet locations. Neiman Marcus carries clothing of higher quality than much of the clothing at a Walmart store but it is also considerably more expensive. Consumers in the US like low prices and good value and so Walmart sells vastly more articles of clothing than Neiman Marcus. It is quite possible that both stores may carry products produced overseas with child labor but that isn't normally a big concern with most shoppers, they simply want good value for their money. Even if it is a concern how would they know? I have never seen a shirt or pair of underwear with a label attached to it that said "Made by 8 year olds in Bangledesh!". The reason you don't see a label like this is pretty obvious, the manufacturer knows it would hurt sales and they aren't required by law to say if thier product was made by children. Sure, if business was conducted in a completely transparent way child labor around the world would probably be reduced, but the only way to make things that transparent would be through laws requiring it. Libertarians and tea partiers should see this conundrum but they don't or they choose to ignore it as they do so many other things.
One of the other things that they ignore is history. The first federal law designed to combat child labor in the US was passed in 1916. Problem solved, right? Wrong. In 1918 the law was over turned by the US Supreme Court for being in violation of the Commerce Clause. Surprisingly the case was brought to the court by a parent who wanted his young sons to work in the local coal mine. If a parent will defend child labor how is the market going to stop it? The thing is that people in the US knew that children were working in coal mines and textile mills and other factories but they didn't boycott these companies and cause them to change their practices. No, they just enjoyed the lower prices that came from cheap child labor while the owners of the businesses enjoyed higher profit margins than would have been possible with a better paid, all adult, workforce. Everyone benefitted except the children and since they had no real voice in the market and no laws to protect them they kept getting sent into the coal mines and factories by their parents. Child labor remained common in the US until 1938 when the Fair Labor Standards Act was passed, which was then challenged by a lumber company but who lost their case in the Supreme Court. This law severely limited child labor in the US but failed to eliminate it. Even today child labor is surprisingly common in America, not just in illegal sweat shops but also in perfectly legal forms in agriculture. I'm not talking about a kid working on the family farm under the watchful eye of their parents, no, in the US child labor is used to pick almost a quarter of the food produced in the United States. That's right, a trip to your local grocery store could be supporting child labor right here in the US just like a trip to the shoe store could be supporting child labor in Asia. Laws have greatly reduced the use of child labor in the US even if they haven't eliminated it completely, what has the market done to get rid of child labor? Not much of anything.
The market, free or otherwise, is not all powerful, it is not all knowing, it is not God and it is not capable of controlling the less than savory conditions it actually creates itself. It is only good at creating profits and funneling those up to the few people sitting at the top of the economic ladder. It isn't just child labor though, in China a company called Foxconn produces products for American companies like Apple. A few years ago the media widely reported that workers at Foxconn were poorly treated, forced to live, on site, at the factories, and were committing suicide at an alarming rate. Apple requested studies on the conditions at the factories and demanded changes but the suicides and accidents and poor conditions still continue. The only thing that has changed is that the sale of iPhones, made by Foxconn, have gone up. The market is aware of the problem but continues to support it. How many of you have actually changed your buying habits when it comes to clothing after hearing about the collapse of an unsafe building in Bangladesh used as a clothing factory in 2013 that killed over 1000 workers? Many of the items produced in that factory were sold in the United States but people in America still keep buying clothing produced in sweat shops under horrendous conditions because you can't tell how poorly the workers who made the garment were treated by its label. You can only see the price. The market can't solve these problems because the market creates these problems. It takes an outside force to address these issues and the only outside force capable of doing so is the government.
Adam Smith, a Scottish philosopher, wrote a book called "The Wealth of Nations" in 1776 which laid out the principles for capitalist economics and later for free market theory. While he was suspicious of government intervention in some ways he also realized that the market was made up of human beings who had only their own best interests at heart and who would ignore the good of society in favor of personal gain.
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.
Yes, even Adam Smith knew that some government regulation would be needed to stop the market from acting against the good of society. Why the father of capitalism and the grand father of free market ideology would find people who should be supporting his every word ignoring some of the basic principles he espoused (he also said that government only exists to protect the rich from the poor so it is really hard to understand why so many of the wealthy are so adamantly opposed to government intervention) is confusing. It is confusing until you realize that nothing the tea partiers or libertarians say about the economy makes any sense or stands up to inspection through a factual or historical lens. They do not follow a political ideology they follow a set of economic religious beliefs and like most religious zealots they will not be swayed. This does not mean that we have to support their goal of sending most of us into some sort of indentured servitude. We can reject their ideals, we can reject their political candidates, we can shine a bright light on their insane vision for the future by not shying away from conversations in which their concepts are promoted. It is said that it is not polite to discuss religion or politics in America, with free marketeers you are talking about one in the same. So it may not be polite, but sometimes you have to be a bit rude in order to get things done. This is something that needs to be done.