We often feel like heinous fiends when we purchase women’s underwear, men’s t-shirts, or unisex toques that come with the tag “Made in Bangladesh” or “Made in Indonesia.” Why? The odds are high that those goods were manufactured using child labor.

Thanks to free market innovation and capital accumulation, child labor has been eliminated in the U.S., Canada, Great Britain, and other wealthy western nations. That said, it continues to be a massive issue in many developing countries.

According to a new study by the International Labor Organization (ILO), 168 million children are in the labor market, down from 250 million in 2012. Child labor rates have been plummeting since 2000, but researchers are worried that the decline is happening at a much slower pace.

Here is a question: is child labor evil? Forced child labor is, but voluntary child labor may be a lifeline.

Stop Child Labor Now?

Across the U.S., a number of movements encourage consumers to no longer acquire items that may have been manufactured with children’s hands. Whether it is a pair of pants or a dress shirt, several organizations urge you to cease buying certain products.

This is a noble cause and should be commended. Unfortunately, like every other good intention generated by members of the public or government, there are unintended consequences – ramifications that inevitably hurt children.

By not consuming these products, you put these kids’ lives in jeopardy. It may indeed seem counterintuitive, but this is the reality of the situation for millions of boys and girls across the globe.

Most children who work in poor countries are employed in agriculture or household services, which often involve backbreaking labor, such as loading bricks onto trucks or cultivating farmland. Many others, especially girls, are forced into the sex trade. And none of us ever wants this to happen to any boy or girl.

Let’s say a company opens a new factory in a particular part of the country. In doing so, it provides a new employment opportunity for residents – including children. Sewing underwear, working 10 hours a day and earning a dime an hour is a reasonable and welcomed alternative for the minuscule minority. It’s also a relief from arduous labor or sexual enslavement.

Why are these kids burdened with work and not going to school? It’s simple: desperation. Their parents are unemployed, they’re hungry, and they have no money. When you’re starving and have no other means to support your family, you look for a job.

In the end, when we stop purchasing products made with child labor, it doesn’t alleviate poverty, it only exacerbates it.

Desultory Politicians Spring into Action

In 1993, Senator Tom Harkin (D-IA) proposed The Child Labor Deterrence Act, a piece of legislation that prohibited imports made overseas with child labor. He, alongside Democratic and Republican colleagues, averred that helpless children were working six days a week for 15 cents an hour. Senator Harkin also expressed his concern that American workers could not compete with slave wages.

At the time, Harkin was considered a hero for trying to end child labor. But did he? No.

Soon after the otiose bill was introduced, various Bangladeshi factories shut down, letting go about 50,000 children. When their jobs were lost, the kids took worse jobs, landed on the streets, or went into prostitution. Senator Harkin did not solve anything; he only made their situations worse.

Even the ILO understood this would happen, writing in a report in 1995:

“The precipitous dismissal of children who are already working can also endanger, rather than protect, those children. In addition, undertaking measures which concentrate solely on child labor in the export sector may have the effect of driving child labor underground, further into the shadows and into even more unregulated economic sectors.”

Glenda Giron of the Kennedy School later wrote:

“With all good intentions, the United States passed the Child [Labor] Deterrence Act in order to ban imports of goods made by children younger than fifteen. In response to this short-sighted policy, Bangladesh dismissed thousands of child workers from their jobs, who immediately ended up in the streets, mainly working as child prostitutes. I believe that the way we treat the most vulnerable members of our society reflects who we are, and the development and wellbeing of children should be a primary concern to all nations. Nevertheless, policy makers must understand that when faced with this complex human rights issue, simple moral indignation is not the best guide to effective public policy.”

The politicians tried to do the right thing, but sometimes that backfires.

Capital Eliminates Child Labor

We have seen images of children at the start of the 20th century performing a wide array of jobs. Breaking up coal at coal mines, selling newspapers and being chimney sweeps; they did a lot of work.

This is something that is unheard of today in the western world – but not because of government.

The left will state that the only way to eviscerate child labor is to implement bans. This is what the U.S. government did in 1938 when it adopted The Fair Labor Standards Act. But child labor rates were already coming down – only 6.4% of kids were employed, and 75% of them were in agriculture.

Why? Capital accumulation.

At the time the law was instituted, the gross domestic product (GDP) per capita was approximately $10,000 in today’s dollars. In other words, children did not need to work; households had earned enough to have the father work, the mother to perform the housework, and the children to get an education.

Another factor was human capital. Businesses sought workers with skills, experience, and education to operate their equipment and complete intricate tasks, which couldn’t be done with uneducated, unskilled, tiny people.

If you were to repeal child labor laws today, the average person would think children would be sent to the coal mines or return to being chimney sweeps. No, this would not happen. Not only would parents not allow such a thing to occur, the social media backlash would be so intense that hiring children would be suicide for American businesses.

The ultimate objective for any society is to have kids obtain knowledge, learn a trade, and gain employment to contribute to the division of labor once they’re grown. Unfortunately, many societies are not advanced or rich enough to achieve this goal – perhaps tomorrow, but not today. Until then, kids slogging at sweatshops in the middle of Bangladesh is superior to starvation, prostitution, homelessness, or all of the above.

Capitalism enables children to absquatulate these horrific conditions.

Do you think there should be child labor laws? Let us know in the comments section!

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Andrew Moran

Economics Correspondent at LibertyNation.com

Andrew has written extensively on economic, finance and political issues for a decade. In addition to Liberty Nation, Andrew writes for EarnForex.com, Economic Collapse News and LearnBonds. He is the author of three books, including “The War on Cash.”