Which leads to the other great failure of rational actor theory in libertarian economics: the artificial separation of government and the governed in a democratic society. At least in representative democracies, the government exists as a mutual compact of citizens who choose to prevent the ills and excesses of the coldhearted markets by funding a protective system of checks and balances, social programs, guaranteed infrastructure, worker protections, product regulations, and a host of other goods and services that reduce the ability of the powerful to exploit the powerless on the open market. The choice to pay taxes to regulate meat companies so that consumers don’t have to do the research and take on the purchase risk of which companies’ hamburgers might be tainted, is just as equally valid a decision as the choice between going to Burger King or McDonalds.
What does all this have to do with Bangladesh? Everything. No Bangladeshi chooses to work in a dangerous factory at risk of implosion. They do so because they have little other choice, and because profit-driven companies are more than happy to exploit them while charging top dollar for the products they create so cheaply. Certainly, in theory that is a risk that Bangladesh and its citizens may take because if they instituted stronger wages and labor protections, the sociopathic corporations that hire desperate overseas labor would simply move on to the next country. That’s the rational actor theory at work.
But in theory we as citizens of the world can also choose to not allow those corporations to engage in recklessly criminal behavior anywhere in the world.
Reminds me of Henry Wilcox’s line in E.M. Forster’s great novel of class Howards End: “The poor are poor. One feels sorry for them but – well, there it is.”