Regarding your first point, I’ll share some recent comments by a friend of mine who is writing a book on sweatshops:

1) The process is not instantaneous. It takes time. In the early east asian tigers (Taiwan, Hong Kong, etc) it was a couple of generations to move from sweatshops to middle income. It’s happening faster now but is still a process.

2) Real wages have been improving in China but it’s also geographically specific. Many regions in China have been left behind. Look at the “marketization index” that examines individual regions in China. Those that have granted the most freedom have seen the biggest increase in incomes. It’s not surprising to see low standard/wage factories in some regions of china and better wages in others (and some rural regions without sweatshops still). There was just a nice feature I read on how sweatshop workers improved their lives in China. I think it was Time online but I’m not sure and can’t find it in my email right now.

3) Sweatshops are a stage in economic development when institutions allow for growth. In countries with low economic freedom they might not move much past sweatshops until they improve their institutions.

The key problem we face is that we have practically unlimited wants but finite resources, particularly labor. Thus we need to find a way to make that limited labor productive enough to meet as many of these wants as possible. Capital equipment is what accomplishes this. There is a clear and obvious connection between the amount of capital equipment per capita and the standard of living of the population.

You then argue that the whole population should be replaced by robots if this were true. First of all, you need to show me why the logic in what I said is mistaken before raising the prospect of Robot World. A world in which robots do everything – e.g., give massages, drive trucks, provide financial advice, give aerobic instruction, write newspaper articles, and build and maintain more robots – is rather unlikely for obvious reasons, but were we to approach it, we would actually be approaching a world in which with relatively little human exertion all our material needs would be met.

The artificial substitution of capital for labor occurs when the state makes labor so artificially expensive that firms desperately search for substitutes. Spain is a perfect example – firms are paying a 50% tax per employee! Is there anyone on earth thick enough not to see the depressing effect this has on employment? As a result, McDonald’s is looking to replace its cashiers with machines. This will be costlier than employing people at a market wage to perform this task, but not so costly as employing them under the Spanish system.

Regarding social democracy, I have a blog post on the front page of the site on Scandinavia that answers this oft-heard objection. With welfare states collapsing all over Europe, I hardly think this is a decisive objection.

Regarding bank transparency, banks were far, far more transparent 100 years ago, when the regulatory apparatus was much smaller, than they are now. They had to be. No one would trust them otherwise.

As for workplace safety laws, you are really missing the point of what I’ve said. No one is saying that workplace safety laws are incompatible with prosperity. I am saying that they are superfluous at best and harmful at worst. I realize I am contradicting my eight-grade teacher in saying so. I recommend this piece by George Reisman.