What Does “exploit” Mean?

I recently had an interesting online exchange with someone supporting the expulsion of illegal aliens. His argument was that they were being exploited by being paid less than other workers, that that was bad and they should be expelled to prevent it. I responded that they were being paid more than they could make back where they came from, so being expelled would make them worse off. He agreed, still thought they should be expelled.

He did not argue, as others with his position do, that they should be expelled for the benefit of American citizens, that they were taking jobs away from American workers or pushing down wages or competing for housing or leaching off welfare or committing crimes. His view was that they were being exploited, exploitation was bad and should be stopped even if the result was to make them worse off.

That form of argument is not, in my view, absurd. I am not a utilitarian nor entirely a consequentialist, can imagine situations where I would oppose doing something with what I regarded as good consequences because doing it was wrong, violated rights. My problem in this case is understanding in what sense what is being described as exploitation does so. What does “exploit” mean? Why is doing it wicked?

I see two possible meanings for the word. One is that I exploit someone if I benefit from my interaction with him. In that sense I exploit my wife and she exploits me; that is why we are married. The other meaning is that I exploit someone if I gain and he loses by our interaction. That is in most contexts a bad thing — for an exception, consider someone interrupting a burglary, a transaction by which the burglar loses. An employer exploits his employees in the first sense but not in the second; the relation can be attacked as exploitation only by confusing the two.

That was the argument I offered to the person I was arguing with but it did not persuade him. I put the question to him of what he meant by exploitation and why it was wrong; he, and some others in the thread, tried to answer it. They offered two examples of an interaction that, in their view, exploited someone and was therefor wrong even though the person exploited gained by it.

The first was someone who spots a very rare trading card, buys it at a low price from someone who does not realize its value, resells it at a high price. The second, and to my mind more persuasive, was someone who comes across a man lost in the desert and dying of thirst, sells him water in exchange for a deed to his house.

My reaction to the first case is that it is wrong only if the buyer has some obligation to the seller. If they are friends, that is not how friends are supposed to treat each other. If the buyer has deliberately misled the seller or has represented himself as offering a price close to the full value, that is fraud. Absent such conditions, in an arms-length transaction with a stranger, I do not think the buyer has done anything wrong. I offered an alternative scenario where I spot a valuable jewel in an antique shop whose proprietor has misidentified and badly underpriced it. I do not think I have any obligation to inform him of his error before buying it.

The lost in the desert case is a harder one for my moral intuition. I discussed versions of that in a note to my Law’s Order, concluded that it was a situation where someone could be made worse off by a legal rule of freedom of contract although not a likely one. The transaction feels wrong to me. But I have a hard time putting that intuition in a form that lets me distinguish it from the trading card or antique jewel case, which don’t.

The person I was arguing with put it in terms of the disproportion of gains. In the trading card case, the seller gets, say, five dollars from the transaction, the seller five hundred, which feels unfair to him. Similarly, he argued, the employer gets a large gain by employing the illegal alien for much less than a citizen would charge for the same work. As best I could tell, what he meant by “exploitation” is a transaction from which one party gains less than he should, with “should” defined by the assumption that the gains from the transaction should be divided about evenly.

If that is his definition, I suspect that he has his facts backwards. The gain to the illegal immigrant worker, the difference between what he is paid here and what he would be paid back where he came from, is large, as demonstrated by the costs and risks illegal immigrants are willing to pay to come. If the employer who pays ten dollars an hour was getting twenty dollars worth of labor some other employer would offer a little more; there is competition to hire illegal as well as legal employees. A legal worker might cost twenty, but neither the employer nor his competitors are hiring legal workers to do that job. Possibly at that wage it would not be worth doing, possibly, in a world with no illegals, it would be, with a higher price for what they are producing. But that isn’t relevant to how much this employer in this world makes by hiring this worker.

My opponent might argue (but didn’t) that the illegal’s exploitation should be measured by not only the profit of his employer but also the gain to the employer’s customers of the lower prices they are charged due to the availability of low wage labor, that we are all exploiting them. I agree that we are benefiting — that is one of the reasons I am in favor of immigration. But the immigrants are also benefiting by the transaction and I see no reason to assume that our benefit is larger than theirs. I suspect that my opponent’s intuition is driven by an egalitarian sentiment, that he observes that we are much better off than the illegal immigrants and sees that as meaning that we are getting much more from the interaction than they are, ignoring the fact that if they did not come we would still be much better off than they are. If I am correct in my economic arguments, my opponent is wrong in his conclusion, is being misled by the moral equivalent of an optical illusion. By his definition of exploitation, the illegal immigrants are not being exploited.

Oddly enough his definition of exploitation, if I correctly interpret it, works for the cases where I don’t find persuasive, the trading card and the antique, but not for water in the desert. The gain to the seller is a house, the gain to the buyer is his life minus a house. I expect most people value their life at considerably more than their house.

But what interested me in the exchange was not the economic issue but the moral issue. Interrogating my moral intuitions, what is wrong with the water in the desert case is not the disproportion of gains, since that does not bother me in the other two cases — and the gains are not obviously disproportional. Part of it is that, while water to save your life in exchange for everything you own is a gain relative to the situation an hour earlier, it is a large loss relative to the traveler’s normal situation, which makes me intuit it as a loss — and my gaining by your loss is exploitation in my terms.

It is not only that. Suppose I add one additional assumption to the scenario. The water seller has a wife who needs a very expensive medical procedure to save her life; everything the traveler owns is what it will take. Now the price no longer feels extortionate. Yet I would not take that as justifying the husband in kidnapping the traveler, now no longer assumed dying of thirst, and charging the money for the operation as ransom, so the seller’s need does not, by itself, justify the transfer. It feels as though my intuition is driven by some combination of feeling as though the payment is a loss, not just a failure to gain, and that the seller is being unreasonably greedy in the terms offered. Eliminate either of those and the transaction no longer feels wrongful.

Discussing the question off line, I got an interesting explanation of the equal division position, one based on game theory not moral philosophy. From time to time we find ourselves playing the game that economists and game theorists call bilateral monopoly, bargaining over how to split the gain from a transaction. If we do not agree the transaction does not occur and the gain vanishes. One tactic in such bargaining is persuading the other party that if he does not agree to your terms the deal will fall through. The danger of that tactic is that if the shares the parties have committed themselves add up to more than all of the gain, neither gets anything.

That suggests a commitment strategy: Persuade yourself to never accept less than half the gain. The commitment is reinforced by the belief that giving you less than that is wicked, unjust, that accepting less is shameful, wimpy. Having convinced yourself of that, you naturally generalize to other people’s transactions as well.¹

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1. For a different example of a commitment strategy, consider that I am committed to sending out a post every three days at noon California time, a commitment made for my benefit not yours.