The economics of slavery

Author: Haroon Mustafa Janjua

Ancient thinkers have concentrated mainly on the ethical aspects of slavery. Aristotle considered, for example, that “some men are by nature free, and others slaves, and that for the latter slavery is both expedient and right” (Aristotle, Book I). The global integration of economies, including labour markets, has brought many opportunities for workers and businesses. Despite the past years of economic crisis, it has generally spurred economic growth. However, growth in the global economy has not been beneficial for all.

Classical economists believed that slavery was unprofitable. Adam Smith, for example, was of the view that free labour was more motivated, more productive and more profitable. In The Wealth of Nations he explained that, “The work done by slaves, though it appears to cost only their maintenance, is in the end the dearest of any. A person who can acquire no property can have no other interest than to eat as much, and to labour as little as possible.” Today, about 21 million men, women and children are forced into labour, trafficked, held in debt bondage or work in slave-like conditions.

The 2014 International Labour Organisation (ILO) report on the economics of forced labour takes the understanding of forced labour, human trafficking and modern forms of slavery to a new level. It builds on earlier ILO studies on the extent, cost and profits from forced labour. For the first time, it looks at both the supply and demand sides of forced labour, and presents solid evidence for a correlation between forced labour and poverty. Furthermore, it provides startling new estimates of the illegal profits generated through the use of forced labour as well as new evidence of the key socio-economic factors that increase the risk of falling victim to coercion and abuse.

The ILO Committee of Experts on the Application of Conventions and Recommendations (CEACR) has provided guidance on the scope of the definition of forced labour, stressing that it encompasses trafficking in persons for the purpose of labour and sexual exploitation, as defined by the Palermo Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children. In the 2012 survey, the ILO estimated that 20.9 million people are involved in forced labour globally, trafficked for labour and sexual exploitation or held in slavery-like conditions. The vast majority of the 20.9 million forced labourers — 18.7 million (90 percent) — are exploited in the private economy by individuals or enterprises. Of these, 4.5 million (22 percent) are victims of forced sexual exploitation and 14.2 million (68 percent) are victims of forced labour exploitation primarily in agriculture, construction, domestic work, manufacturing, mining and utilities. The remaining 2.2 million (10 percent) are in state-imposed forms of forced labour such as in prisons or in work imposed by military or paramilitary forces.

Estimating the profits of forced labour, the ILO’s 2009 data depicts that, excluding forced sexual exploitation, the total costs of coercion were approximately $ 21 billion, with the total amount of underpaid wages estimated to be $ 19.6 billion, with the remaining $ 1.4 billion attributed to illegal recruitment fees. The 2012 implied annual profit from slave labour is estimated to be $ 96.5 billion; this figure might include the under payment of wages and cost involved in the recruitments.

The 2014 ILO report evaluated that 21 million victims in forced labour and the more than $ 150 billion in illegal profits generated by their work exceeds the population and GDP of many countries or territories around the world. Yet this vast nation of men, women and children, along with their resources, remains virtually invisible, hidden behind a wall of coercion, threats and economic exploitation. However, it is a clear fact that in the past slavery both increased production and reduced the world’s prices of cotton, sugar, coffee, tobacco and other commodities, leading to a massive expansion in transatlantic trade.

Gender is an important factor that determines the likelihood of being in forced labour, especially in relation to specific economic activities. According to the ILO’s Global Estimate, about 55 percent of all victims are women and girls. In forced sexual exploitation and in domestic work, the vast majority of victims are women and girls.

The globalisation factor has reduced slavery, bondage and forced labour. The broader extent of international trade could generate revenues leading to economic development and hence it has less incidence of overall forced labour. On the other hand, determinants of cross-border sex trafficking finds empirical support for the view that destination countries tend to be more open to globalisation. Measures are needed to strengthen laws and policies, and reinforce inspection in sectors where the risk of forced labour is high. This should be linked to an early identification system of victims and their effective protection. Labour rights violations should be swiftly punished and criminal sanctions should be imposed on those who prey on particularly vulnerable workers.

Empowering workers by providing social protection to sudden economic drifts and debt bondage can prevent them from suffering serious hardships in their work. Access to education can enhance the bargaining power of the labourers, preventing them from falling into the hands of fraud immigrants and later becoming slaves for sex work. Profound migration with effective governance can enhance the positive development impact of migration and prevent the exploitation and abuse of migrant workers. The continued existence of forced labour is a curse for society and the exploitation of its victims and slavery of any form should be eliminated from the world on a priority footing.

The writer is an award-winning columnist. He tweets @JanjuaHaroon and can be contacted at Janjuaharoon01@gmail.com

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