Does the Road Out of Poverty Run through Sweatshops?

Ben Powell, director of the Free Enterprise Institute at Texas Tech University, presented a great lecture last week to students in my Economic Expansion and Development class. Powell is on a tour promoting his latest book published by Cambridge University Press entitled Out of Poverty: Sweatshops in the Global Economy. Their function is not what you think.

Powell's primary goal is to educate people to the positive economic role sweatshops play in the lives of poor people who work in them. Additionally he hopes to encourage those who truly want to help the poor to do no harm mistakenly encouraging policies that will result in factories that close  because of rising costs and lower demand for their products. Such policies only make it more likely that poor workers in less developed countries have fewer opportunities and therefore will be faced with even worse working conditions and lower and less stable wages.

Here is Powell in a brief video that introduces many of the themes in the new book: