A tiny beam of light peered through the tarpaulin, the only opening in the packed darkness of the truck that transported bilberry harvesters. When I was eight or nine, my grandma would walk us through the forest mazes, marshes, and wetlands of Polissya. It was due to her knowledge of berry patches that I could make up to $4 a day. I had grown since then, but at least a third of it would have to go to the truck driver.
The memory of berry-stained fingers briefly resurfaced in the polished library of the School of Economics in Riga, when I borrowed a copy of The Undercover Economist. Somewhere between the witty remarks on lemon car markets and traffic navigation, I encountered the first argument for the necessity of sweatshops in economic development. Harford’s logic cut clean: the workers have no better alternative, and the demand for labor slowly pushes wages up. The government collects taxes and builds infrastructure, including health clinics and schools, thereby laying the path to prosperity. If the workers endure the conditions, the region's development will follow as the most natural consequence. A few years later, I defended his reasoning in another classroom, this time at Grenoble School of Management, when, during a case study, one of the students suggested cutting the supplier using child labor. “Perfect”, I sighed. “Now you left them with no options at all.”
Exploitation is palatable when it promises a brighter future. Harford cites South Korea, where, adjusting for inflation, modern workers earn four times as much as their parents did twenty-five years ago. He could have augmented the argument with Taiwan, Hong Kong, and Singapore - the Four Asian Tigers - whose meteoric growth became a case study for emerging economies. The Asian miracle depended on a multitude of complex factors. Still, it was widely attributed to macroeconomic stability, heavy state intervention, and export-oriented industrialization that went hand in hand with US support through free-trade policies, capital flows, and military backing. This growth occurred from the 1960s to the 1990s, following the Cuban Missile Crisis, widely regarded as the peak of the Cold War. US support stemmed not merely from a quest for new markets and cheap labor, but also from a desire for a stable capitalist foothold against communist expansion in the region.
It is hard to determine the extent to which US involvement stemmed from anti-communist ideology or pragmatic economic interest. To prevent communist insurgencies in rural Asia, the USA was directly involved in land reform in Taiwan, reducing rents and selling public land to tenant farmers. Taiwan’s state policies in the agricultural sector have been widely acknowledged as among the most successful state interventions among developing countries.
This narrative breaks down where the presence of Western companies seeking cheap labor and materials did not prove a blessing. In Guatemala, the American United Fruit Company became the largest landowner, postal service, radio, telegraph, and port operator. When the democratically elected President Árbenz attempted agrarian reforms that redistributed uncultivated UFC land at tax-reported value to poor peasants, the CIA orchestrated a coup. A 36-year civil war and a mass genocide followed the president’s ouster.
In Colombia, when workers demanded to be paid in money and not company coupons, six-day work weeks, and medical care, UFC pressured the Colombian military, which opened fire on striking workers and their families. Both incidents were explicitly framed as a response to communist danger rather than the preservation of US economic interests. The redistribution of unfarmed land from Taiwanese landlords to peasants was anticommunist. Redistribution of unfarmed land from an American corporation to Guatemalan peasants was a communist threat.
Anti-communism framing legitimized a covert coup for the American public and the international community. Harford’s decision to present the historically contingent case of Korea as a generalizable path of development absolves consumers of guilt and the need to question modern sweatshops. Korea’s path included conditions left unexamined: reinvestment incentives through inclusive domestic institutions, and Cold War alignment with the hegemon’s geopolitical interests. Neither condition is guaranteed nor transferable. Still, Undercover Economist sold over a million copies and was hailed by Steven Levitt as “required reading for every elected official, business leader, and university student”.
Hard work and cheap labor lead to sustained growth when there is an incentive beyond maximizing extraction capabilities. Asian Tigers benefited from US geopolitical interests; Guatemala and Colombia were held back by those. Where such interests are absent — peripheral regions, conflict zones, wastelands — places like my home region exist. Its lowlands are home to swamps, forests, and rivers that flood vast expanses, dividing the land into countless hamlets. Chornobyl's location laid bare the region's isolation from major routes and expendability. Polissya, in its wild forest beauty, remains largely agricultural, where people gather berries, illegally log timber, ruin the soil, and occasionally die while extracting amber.
They live in a reality that Harford missed: a peripheral zone without an institutional mechanism or a powerful state to care, where extraction is the endpoint, not a stepping stone.