US Economic Growth vs. Immigration: Who Will Fix the US Labor Shortage?

As unemployment rates hit historic lows, the United States is currently in the midst of a severe skilled labor shortage. Coming on the backend of the longest continuous job creation in US history, the United States is facing its biggest shortage of workers in more than 20 years. The latest figures have seen the unemployment rate rise up from a record low of 3.8% to 4.0%. Various American industries and companies, particularity in the information technology, transportation, agriculture, construction and manufacturing sectors, are suffering from a range of shortages. Back in January 2017 The Associated General Contractors of America (AGCA) conducted a survey where 73% of businesses said they had a difficult time finding qualified workers and 55% identified worker shortages as bigger concerns than federal regulations and low infrastructure development. The U.S. bank did another study in 2018 in which 61% of small businesses said, “they were experiencing extreme to moderate difficulty in finding quality skilled workers in order to expand their businesses.” 

Erin Clemens, Vice President of Beach Nut Nutrition, one of the leading brands in baby foods in the US, said that, “There is definitely a [skilled labor] shortage in the Mohawk Valley [New York]…we’re exhausting the labor pool. The population is not growing. Unemployment is low.”

Apparently the transportation industry is also experiencing major consequences as it reported a shortfall of 51,000 truck drivers in 2018. Trucks account for approximately 70% of goods and services transportation across the United States. In order to keep their drivers some companies are having to firmly increase wages with Us Xpress, based in Tennessee, announcing $50,000 bonuses and four weeks holiday for certain driver teams. In an industry where the median annual income for a truck driver is US$43,000 and a typical driver is on the road more than 300 days of the year, this is unheard of. According to chief economist, Mark Zandi, at Moody’s Analytics, “Business’ number one problem is finding qualified workers. At the current pace of job growth, if sustained, this problem is set to get much worse… these labor shortages will only intensify across all industries and company sizes.

Now some may argue that the labor participation rate is currently at a slump and that one of the answers to the skilled labor shortage may be to reach outside the skilled labor pool and attempt to address labor and skill shortages internally. In doing so, there are four major domestic areas in which an economy could look in order to increase its labor shortage, as represented in the diagram below.

Currently there are various issues with attempting to solve the skilled labor shortage by reaching into these other talent pools.

Ø  Retired/ Older Workers - One first places employers turn to when looking for more employment are retired and older workers, but unfortunately for the United states, they face the reality of an aging population whose workforce is already at capacity. Currently in the United States 4.4% of individuals 85 or older are still working, which is the highest number on US record. The proportion of workers over the age of 55 in the workforce has also been at a historic high, after in 2016 it was reported that 22.4% of the workforce was over 55, while projections see it rising to 25% by 2024. As the oldest baby boomers already started retiring in 2011, a significant amount of workers from that era are above or around the age of retirement and while these figures show a lot of them are still working they represent the fact that the potential for an increase in retired workers entering the labor force, is most likely very near capacity.

Ø  Under Age / Part – Time Workers – The teen unemployment rate saw its lowest mark since 1969 at 13.3%, mid last year. Over the past three years Starbucks, according to Starbucks Senior Vice President John Kelly, has hired 50,000 workers between the age of 16 and 24 who weren’t in school or working. Even lawmakers are trying to expand the labor force as Minnesota state representatives are trying to change the law disallowing teens from working construction sites as there are such a limited number of workers available in the current labor market. In addition, the underemployment rate, measuring the amount of part – time workers seeking full time work was at 7.8% in June 2018. This was the lowest rate recorded since before the GFC in 2008, thus identifying severely strained pool of part – time workers.

Ø  Restricted Demographic – In certain critical cases the employers turn to largely overlooked labor pools, specifically those with criminal records. Surprisingly, some employers have reached such an extreme that according to the Financial times, “Labor shortages in the US Midwest are prompting employers to hire prisoners, ex – convicts and former drug addicts as they relax recruitment standards to fill vacancies.” This gives insight to the idea that employers are leaving no stone unturned in their search for workers, as their desperation levels are reaching an all time high.

Ø  Unskilled Workers – One of the options employers have is to attempt to retrain and educate unskilled workers in order to fill skill and labor gaps. This is already happening as General Electric Aviation’s staffing specialist, Betsy Enderle, said the situation is “very dire” and the company is more aggressively recruiting in high schools and lowering skill standards for jobs as there simply aren’t enough candidates with the right skills applying for the positions needed. Some companies are even trying to train students in the earlier high school years while attempting to put them in the workforce by their senior year, but the other issue with education and retraining is the time factor. One example of this, is the US’ current dire need of STEM related degrees and qualifications as June 2017 reported the US economy having 600,000 unfilled technology jobs. The time taken to educate, and train unskilled domestic workers will take money and time the US doesn’t have, as labor markets grow tighter and economic growth is being compromised.

One of the biggest issues with the current state of the labor market is that it is constraining economic growth. This year has already seen consumers starting to suffer from increases in food prices, longer wait times for products, and uncompleted services. The Federal Reserve released a report on January 17^th, 2018 stating that, “Most Districts cited on-going labor market tightness and challenges finding qualified workers across skills and sectors, which, in some instances, was described as constraining growth.” According to the Federal reserve in particular, increased labor costs which have been associated with attracting workers have been restraining growth in a number of its districts, especially in manufacturing, construction and transportation.

In addition to these problems, the current overall US labor market is shrinking as the population of eligible working age individuals is diminishing. Over the past 10 years the World bank reports that the percentage of working age individuals within the United States has decreased 1.2%, standing at approximately 65.74% of the population in 2017, which is its lowest rate since 1998. With a decreasing working population and increasing demand for goods and services, trouble is brewing for the future growth of the United States.

If there was any room left in the labor market domestically there would not be huge wage growth pressures in the United States as those outside the labor force, in the categories listed earlier, would see the given opportunities, and quickly enter. As stated by Jeffry Snider of Global Investment Firm Alhambra Partners, “there would be a clear rush of those not in the labor force to join it. Those millions right now outside the official numbers would be moving back into them if they were given a legitimate shot at fruitful employment.” Thus, with more readily people available employers would have options to hire more incoming workers, but this is not the case. Earlier in 2018, Bloomberg reported that the United States has seen the highest rise in wages in a decade, as  average hourly earnings rose 2.9% in the United States between January 2018 and January 2017.  Various CEOs have acted in alignment with these trends as they have made numerous wage related investments:

A further danger associated with high wage pressures is high risk of inflation which will significantly increase the prices of goods and services, subsequently costs of production, and evidently have a constrained negative effect on economic growth. Therefore, given the reports and related statistics, the United States is in the midst of a severe skilled labor shortage and increasing the labor participation rate, looking at domestic labor pools, will most likely not solve this issue. For solutions, immigration, may be part of the American answer.

What many people don’t realize is that many of America’s most successful individuals are not only foreign but originate form emerging economies and developing nations. For instance, Madeline Albright, the first woman to become US secretary of State in 1996, was from Czechoslovakia, which today is known as the Czech republic and only received developed status well after her appointment in 2006. Jan Koum, the co-founder and former CEO of WhatsApp, who started off as a cleaner in a grocery store is from the Soviet Union Ukraine. Patrick Soon – Shoing, the co – discoverer of Abraxane, one of the world’s top – performing drugs treating breast, pancreatic and lung cancer, and Elon Musk, currently the world’s 6^th most powerful entrepreneur, founder and CEO of PayPal, SpaceX and Telsa, are both from South Africa. Furthermore, PepsiCo’s current CEO, Indra Nooyi, is from India, while even American sports heroes like Dikembe Mutombo and Freddy Adu are from the Democratic Republic of Congo and Ghana. And the list can go on…. The point being that immigrants, particularly from emerging economies, can massively benefit the United States, and as mentioned, have significantly done so in the past.

Business Insider reports that between 1997 and 2013 the top three countries granted the most H – 1B visas (work visas for immigrants) were India, China, and South Korea. Brookings Institute senior analyst Neil Ruiz states that one of the reasons for the majority of H – 1B visas going to Indian applicants is because, “India has a competitive advantage in the global IT industry,” and therefore many places such as Silicon Valley have taken serious advantage of their skillsets, due to the lack there of in the domestic market. The American skilled labor shortage is particularly serious amongst the absence of STEM (Science, Engineering, Technology, and mathematics) field qualified workers. So much so, that even amongst the current ambiguity in American immigration policy, in July 2017 the United States government provided STEM related F1 – student visas in America an extra 6-month extension on their work authorization ability. This now provides foreign students in the United States studying in STEM fields with the opportunity to work a possible total of three years on their student visa before having to apply for a H - 1B work visa. This is an additional 24 months or two years longer than any other type of F1 – Student visa work authorization period. Economists from the National Bureau of Economic Research (NBER), ranked as the 2^nd best economic instution in the world, conducted a survey and found that, “immigration increases both labor participation and average wages for U.S. workers, but only when there is a difference in skill sets between U.S. and foreign workers.” As it may be, the current scenario is most likely a reflection of this disparity amongst skillsets and various labor shortages and thus immigration potentially holds various benefits for the U.S. economy.

America’s current policies are hindering the possible benefits which immigration could bring. H – 1B Visa applicants over the past two years have been led through strenuous amounts of red tape, paperwork and “extra evidence requests”. Even highly qualified individuals such as Frida Yu, who is from China and had earned law degrees in China and at Oxford, worked in Hong Kong as a lawyer at a top international firm, received an M.B.A from Stanford and landed a job at a start – up in Silicon Valley, working on promising new technology to improve the use of data, was denied a H – 1B working visa and at time of notice, was given 17 days to leave the country. The United States government even recently released a report proposing the intended removal of the International Entrepreneur Rule. This is a current policy, which was a late Obama program, aimed at luring the world’s most successful, elite, and intelligent entrepreneurs to America. It is a merit-based program which only 0.00004% of the world’s population is eligible for, while also having the potential to create 300,000 jobs for U.S. workers.

Other countries have implemented successful skilled and merit based – immigration policies, such as Australia. Australia has a unique program which targets immigrants with certain qualifications and experiences, aimed at filling skill gaps within the Australian labor market. Currently skill stream migrants account for approximately 70% of Australia’s total migrant intake and are dominantly from emerging economies. The top seven origins of Australian permanent migrants are from India, China, United Kingdom, Philippines, Pakistan, Vietnam, and South Africa. In April 2018, joint research conducted by the Australian Treasury and Department of Home Affairs cited that the International Monetary Fund estimates that Australia’s migration program will add up to 1% of annual GDP growth from 2020 to 2050, particularly because it limits various economic impacts, including those of an ageing population.

Thus, in conclusion, the United States is facing a severe labor shortage, which will most likely not be fully solved through increases in the labor participation rate and by reaching into domestic talent pools. While immigrants have already played a notably impactful and beneficial role to the United States, skillsets and talent pools in emerging economies can aid America in addressing its tight labor market. While current policies in the United States are not supporting the ideology of skilled immigration, given the kickoff of the US Presidential Campaign in the next 18 months, it is likely to see a renewed perspective on immigration from the United States based upon the presented scenario and projective consequences. If officials do not alter regulations and change their views on immigration, the U.S. economy could face detrimental constraints on economic growth in the near future.  

How can Emerging Economies Diversify their Export Portfolios?

Over the past 10 years, emerging markets have been solely dependent on extremely volatile commodities. In recent years specifically, they have seen great hardship and it is for this reason that they should move towards diversifying their export portfolios. Studies have shown that there are positive outcomes in relation to export diversification. Early studies done in 1987 by Love discovered that by investing in export diversification a country can avoid high levels of instability within its economy, thus damping the effects of large fluctuations in commodity prices. Later studies in 1997 by Acemoglu & Zilibott and by Cadot, Carrere & Strauss-Kahn in 2011 also found that export diversification could lead to an increase in income. This is done by expanding opportunities and spreading investment risks over a more extensive portfolio, which in turn leads to a positive relationship between export diversification and economic development. Some emerging economies such as Mauritius have been able to take on the concept of creating a more diverse set of country exports. Mauritius in particular, has gone from having sugar as 69% of their exports in 1980 to approximately 6% in 2010. This has allowed them to become one of Africa’s most successful economies. ⁽³⁾

This produces two interesting questions:

1.      How can emerging economies diversify their export portfolio?

2.      What strategies can they adopt in order to reduce their reliance on commodity exports?

There are three types of diversification: horizontal, vertical, and diagonal. Horizontal diversification occurs within the same sector such as primary, secondary or tertiary. It encompasses an adjustment within the country’s export portfolio through the addition of new products. These product additions are within the same sector thus hoping to counteract international commodity price fluctuations and instability within markets.  This ultimately spreads the risk as well as foster job creation within various areas of the sector. They could also invest in other sectors within the economy such as tourism, services, or healthcare which would further decrease their exposure to risk of fluctuations in commodity prices and the severe impact it has on their economies today.

 Vertical diversification is the process of shifting economical focus and investment between sectors. For instance, creating and developing stronger industries within the secondary sector rather than the primary, moving from export of raw crude oil as a commodity to building refineries and exporting it as petrol/gas. This form of diversification is particularly important for commodity reliant economies due to the fact that many are so rich in certain commodities. Therefore, by expanding market opportunities for these raw materials it could drastically enhance growth and stability within their economies. ⁽²⁾ By taking on vertical diversification, these emerging markets could start to develop more advanced forms of production and start moving in the direction of an industrialized economy which focuses rather more on manufacturing of certain goods and services. One of the problems associated with this could be restrictions of exporting secondary manufactured products. Such as the sanctions imposed on Pakistan by the United States for cotton clothing exports but not cotton as a commodity.

Finally, there is diagonal diversification which encompasses of a shift from taking advantage of imported input and transferring them into the secondary and tertiary sectors. Ultimately sustainable long term growth demands a combination of all three types of diversification. One last aspect to consider is the level of diversification. Economies need to distinguish between diversification on local, regional, and national levels all of which would entail their own strategies and challenges. ⁽²⁾

There are also many strategies that can be developed in aim of achieving diversification by these methods. Government can provide incentives improving trade facilitation by setting policies to reduce costs. They could potentially move towards investing more in research and development activities which could help stimulate the creation or growth of new sectors within the economy. Eliminating external conflicts and improving governance would highly improve the way in which export industries produce in terms of efficiency and productivity. Adopting non-conservative fiscal policy would assist in ensuring macro-economic stability along with implementing trade policies promoting export diversification which could create shockwaves and have major positive effects on the economy. These are all strategies that I believe could greatly aid emerging markets into developing a much wider export portfolio and thus lead to much more stable and stronger emerging market economies.

             

References

1.      SAMEN, Salomon. A PRIMER ON EXPORT DIVERSIFICATION: KEY CONCEPTS, THEORETICAL UNDERPINNINGS AND EMPIRICAL EVIDENCE Salomon SAMEN, Ph.D 1 (2010): Growth and Crisis Unit World Bank Institute. Web. 30 Jan. 2016.

2.      Sannassee, Raja Vinesh, Boopendra Seetanah, and Mathew John Lamport. Export Diversification and Economic Growth: The Case of Mauritius. World Trade Organization, 2014. Web. 29 Jan. 2016.

Exploitation of Emerging Economies by Western Civilizations

Case Study:

Sierra Leone vs Britain

In order to investigate the exploitation of today’s emerging economies such as Sierra Leone, one must first start from a historical perspective and analyze some of its earliest beginnings. Originally, the British went to Sierra Leone to send freed slaves in the late 1700s and early 1800s, at a time when they had agreements with local chiefs and tribes and only stayed in area of Freetown. During the scramble for Africa in the later 1800s they attempted to colonize, rule over the rest of Sierra Leone and use it for a valuable trade post and exploit its resources.  The British intentions were to exploit is people and labor in order to gain control of the land in terms of trade and strategical vantage points due to high tensions between rival European nations such as France. They also later went on to further exploit its rich reserves of natural resources bauxite, diamonds and gold.

British Rule implemented policy referred to as “Divide and Rule” explicitly designed for the exploitation of the native country and its population mainly through the taxing and persecution of its people.

In Jarred Diamond’s Guns, Germs and Steel: The Fates of Human Societies he discusses how the Spanish explorer Pizarro captured the Inca’s King Atahualpa and demanded a ransom after he had already massacred thousands of the Inca men. Diamond explains how, “Atahualpa’s people brought mountains of gold to ransom him, but Pizarro had him executed anyway.” By, “Depriving the indigenous defenders of leadership,” Pizarro was implementing his, ““divide and conquer” strategy.”

Furthermore, in alignment with this strategy the Inca ruling family was ravaged by a disease epidemic, which originated from Europe, immediately creating a succession crisis. Civil war broke out within the Inca empire where, “Atahualpa led one side and is Brother Huascar the other. The witty Pizarro was able to play the two sides against each other, achieving the ultimate victory for himself. Each side in the Inca civil war saw the other as the greatest threat.” This is exactly what happened in Sierra Leone where the British divided the country based on its two largest ethnic groups, the Temne and the Mende, feeding on the already strong rivalries and playing each group against each other to gain the overall advantage and power over the region. Once divided they also had to pay extremely heavy taxes and were forced into labor maintaining roads which left them no time to engage in subsistence farming, thus threatening their livelihood and survival. As a result, each chief was left with no choice but to rebel.

 In response not only did the British resist against the rebel armies but opted for a “scorched earth policy” which meant burning entire villages, farmlands and terrorizing communities. Eventually the native population gave in and granted Britain full control of the territory. Their misrule and exploitation of the land, and its people to gain control of valuable territory and resources set a strong negative tone and has had lasting negative impacts in terms of political tensions, conflict and hate. It ultimately gave birth to multiple military coups and an eleven year civil war broke out in 1991, which devastated the country, leaving 50,000 people dead and displacing approximately half of the five million population. (This was well represented in Leonardo’s epic movie Blood Diamond, where he nailed the Zimbabwean/ South African accent.)

In the past, many emerging economies have especially been exploited on account of their land and large reserves of valuable natural resources, such as diamonds and gold, as in Sierra Leone’s particular case. More recently, Sierra Leone has been exploited by foreign mining companies such as the British companies London Mining and African Minerals mainly for their iron ore reserves. London Mining and African Minerals are carrying out the actions that are being practiced all throughout resource rich developing nations by western companies seeking to make large profit margins. Minerals are being stripped from the country and going overseas, with no reinvestment back into the country of its origin.

In 2010 the Sierra Leone government gave two big leases to London Mining and African minerals. Both Deals violated the Minerals and Mine Act introduced in Sierra Leone in 2009 which was specifically drawn up with international support to prevent mineral exploitation. The act was brought forward to prevent the reoccurrence of previous cases such as, in which Siaka Stevens, former Sierra Leonean Prime Minister, made secret extraction deals for his own benefit, leading to a rebellion, which was supported by Liberia and lead to a mass amount of Sierra Leone’s diamonds being pilfered, smuggled and sold in Liberia.

London Mining and African Minerals not only took advantage of these corrupt governments to strike deals that benefit themselves, they manipulated and squeezed all that they could from the government, the land and the country. London Mining and African Minerals claimed that without the generous support from the government they would not have invested in Sierra Leone and would have taken their business elsewhere. Unfortunately, due to the Sierra Leonean government being corrupt, economically unstable and desperate for investment this leaves them in no position to bargain and do what they can to attract foreign investment, despite its limitations. Therefore, the foreign British mining companies took advantage of them and use their power as multinational corporations and exert large amounts of pressure onto the Sierra Leonean government to sign contracts that highly favor these multinational mining companies.

There are three major concerns in regards to these new deals between the two British mining companies and the Sierra Leonean government, with the first being that Government has ignored the fact that mining companies must always pay royalties, as London Mining has been exempt from paying when it is in a tax-loss position. The second is that the Government has severely lowered tax rates of both companies, while simultaneously introducing a tax on goods and services that has led to an increase in consumer prices. Not only does this put more pressure on the already struggling 60% of the population living below the national poverty line, but it result in huge outflows from the country and its economies. With the low tax rates and failure of these companies to reinvest into Sierra Leone large amounts of money are not being invested back into the country’s economy and instead leaking out to the British and global markets, thus depriving Sierra Leone of potential stimuluses that could be used to improve the country’s standard of living and overall well-being.

In doing an analytical analysis we can see the amount money being lost to these power and money driven multinational corporations. After lowering the taxes as well as violating the Minerals and Mining Act of 2009, as mentioned earlier, London Mining negotiated a 6% corporate income tax rate for its first three years of operations in Sierra Leone compared to the required 30% as stated in Sierra Leone’s Tax legislation. Both London Mining and African Minerals have also been granted full exemption from goods and services tax, as well as taxes implemented on imported capital goods, vehicles and equipment or Customs tax. The National Revenue Authority has estimated that these exemptions accumulate to a total loss of approximately $US224million in 2012 which was about 8.3% of the country’s GDP. Christian Aid, who maintains a high presence in Sierra Leone, estimated that between 2014 and 2016 the government would have lost a total of $US131million in revenue, which is an average of $US44million per year. This $US44million can be used to education 2.9million children which could educate ¾ of the total population of children under18. As it is extremely evident and is well summarized by Christian Aid worker Joseph Ayamba, “The granting of tax incentives to mining companies, especially African Minerals and London Mining in the country has resulted in massive revenue losses to the government and largely hinder the government capacity to support its development priorities such as health, education and agriculture.” These companies are clearly manipulating their own power, exploiting the country’s resources and leaving a long term trail of poverty and devastation.

 Finally, the third concern is that specifically with African Minerals, it is not clear if government is enforcing the section of the mining act, demanding that all extractors are required to setup an independent fund to rehabilitate the environment. This has already led to detrimental effects on the environment and the populations in the surrounding areas. Mining has caused massive dust pollution which has affected many communities, and created vital health problems. There have also been accounts of flooding which have crippled communities in the Lunsar townships which are located in the Northern Province of Sierra Leone. The mining itself and some of these affects have also had detrimental impacts on farmlands which have had repercussions for an already starving population. Along with decades worth of reckless diamond mining these companies are destroying the Sierra Leonean natural environment. Mining has led to soil erosion, deforestation, and the complete breakdown and loss of whole ecosystems, which also forced populations to relocate. This can be connected to the work of Pope Francis in Laudato Si where he discusses many ecological issues that our ever-changing world is facing. He mentions in his first chapter the loss of biodiversity which is exactly what the companies such as London Mining and African Minerals are doing, after striking corrupt deals with the government that exempt them from certain environmental restrictions. Pope Francis also commented further on the issue of water, noting that mining companies are not only causing flooding, threatening people’s lives, because of their minimal restrictions deforestation and land degradation, resulted in heavily polluted water systems and created large amounts of stagnant bodies of water. These specific conditions, especially the stagnate bodies of water, very similar to what was seen in the movie we watched about the Zika virus epidemic in South America, prove to play lethal roles in the spreading of epidemics such as malaria. Sierra Leone saw approximately 1.7million cases in 2013, in a country consisting of a total population of approximately six million. Collectively, this all contributes to one of Pope Francis’s last major issues which is the decline in the quality of human life and the breakdown of society. Unfortunately everything is connected and one lapse in the chain-link fence, can cripple the whole system. Despite many of these issues such as malaria and environmental degradation already existing in countries like Sierra Leone poor government policies allow these foreign companies to enter the country of their choosing, cut special deals, exploit the country’s resources, destroy it’s environment, and have a overall negative impact on the population’s well-being and country’s economic standing. They take advantage of these poorly - structured emerging economies, who actually need help and assistance, rather than attempt to create a positive long-lasting impact, seek to benefit from large profit margins. As said in the words of a London Mining Supervisor when interviewed by a reporter for the London School Economics Newspaper, “Exploit and go love, that’s all we’re here to do, exploit and go.”

I believe that the exploitation of Sierra Leone and its resources can also be analyzed with in relation Karl Polanyi’s The Great Transformation: The Political and Economic Origins of Our Time(1944). Polanyi believed that a market economy must include markets for all resources including labor, land and money. Polanyi discusses how the one of the two major developments of the 19^th century was the rise of market capitalism and how the market society in which industrialization was situated, was the key for disaster, as a result of the fictitious commodities of labor, land, and money.  He further exclaims how a commodity as in regards to labor, land and money is, ““entirely fictitious,” and that this fiction, “supplies a vital organizing principal, which is that anything that inhibits the functioning of these markets as if they are commodity markets should be prohibited.” Polanyi defines a commodity as something that is for sale in markets and explains that, “labor is an essential human function that is not always intended for sale, land is nature and therefore is not produced for sale and finally money is produced at all except by banks.” Polanyi argues how large-scale production and the investments needed to provide the conditions necessary for a capitalistic market created new risks and as a result required businesses to secure supplies of labor, land, and credit. This was only possible if these resources, land, labor and money, could be purchased in markets, but as defined by Polanyi, these commodities are fictious and cannot be produced for sale in markets. Therefore, attempting to trade them in markets and allocating them through the price system is an unnatural development leading to the destruction of society. Labor cannot be exploited or underutilized without affecting the nature of the person or population, and land similarly cannot be exploited without harm to the environment, if commodified these consequences are inevitable. Therefore, in reaction to the rise in market capitalism and protection of economies and societies Polanyi discusses the reality of the double movement which was, “the widespread expansion of “real” commodity markets accompanied by protective actions to limit the consequences of commodifying land, labor, and capital – the “fictitious” commodities.”

      This is unfortunately exactly what went wrong in Sierra Leone. In its early history Sierra Leone was just conquered by the British and therefore there wasn’t much to be done, but that isn’t the case amongst recent matters. Since Sierra Leone gained independence in 1961 they have partaken in a capitalistic market and although having commodified the fictious commodities they have placed prevention measures to prohibit the exploitation of its economy, resources and people. A perfect example of this is the Mineral and Mining Act of 2009 which prevents environmental and economical exploitation of the country and its resources. Consequently, due to a weak economy, corrupt government and multinational company pressures the Sierra Leonean government by passed these protective measures on behalf the British companies. Therefore, allowing for the exploitation and degradation of Sierra Leone’s resources, environment, and economy and as stated by Polanyi, the ultimate deterioration of the whole society, thus preventing any form of human development.

The manipulation of emerging economies by western civilization is unfortunately still a reality in today’s world. Through the impact of colonization, globalization, and the capitalistic market system, without any protective measures, developing countries are continually exposed to high risk of further exploitation.

Bibliography

1.      "British Mining Companies' Exploitation in Sierra Leone." ONE. ONE, 07 Nov. 2014. Web. 24 Apr. 2016. <https://www.one.org/international/blog/british-mining-companies-exploitation-in-sierra-leone/>.

2.      "British Mining Companies Exploitation of Sierra Leone." Africa at LSE. N.p., 23 Dec. 2013. Web. 24 Apr. 2016. <http://blogs.lse.ac.uk/africaatlse/2013/12/23/british-mining-companies-exploitation-of-sierra-leone/>.

3.      Chasteen, John Charles. "Born in Blood and Fire." Google Books. W. W. Norton & Company, n.d. Web. 25 Apr. 2016. <https://books.google.com/books?id=fC90B5xkYyIC&pg=PA51&lpg=PA51&dq=Pizarro%27s%2Bdivide%2Band%2Brule&source=bl&ots=XorpxEy12Z&sig=Jdsug85Xe7iv8GwQwLojisJQaXY&hl=en&sa=X&ved=0ahUKEwiPtMTrrbDMAhUCMj4KHfguBy8Q6AEIPTAF#v=onepage&q=Pizarro's%20divide%20and%20rule&f=false>.

4.      Diamond, Jared M. Guns, Germs, and Steel: The Fates of Human Societies. New York: W.W. Norton, 1998. Print.

5.      Francis, Pope. "Laudato Si' Study Guide: Chapter One - The Tablet." The Tablet. N.p., 25 June 2015. Web. 29 Apr. 2016. <http://thetablet.org/laudato-si-study-guide-chapter-one/>.

6.      "Malaria: Fighting the Other Epidemic in Sierra Leone." MSF USA. N.p., 23 Jan. 2015. Web. 25 Apr. 2016. <http://www.doctorswithoutborders.org/article/malaria-fighting-other-epidemic-sierra-leone>.

7.      "Malaria: Fighting the Other Epidemic in Sierra Leone." MSF USA. N.p., 23 Jan. 2015. Web. 26 Apr. 2016. <http://www.doctorswithoutborders.org/article/malaria-fighting-other-epidemic-sierra-leone>.

8.      Mosselmans, Bella. "Stop British Mining Companies’ Exploitation of Sierra Leone." WE ARE RESTLESS. N.p., 25 Sept. 2014. Web. 29 Apr. 2016. <https://wearerestless.wordpress.com/2014/09/25/stop-british-mining-companies-exploitation-of-sierra-leone/>.

9.      "Sierra Leone: The Agonizing Experience of a West African State under British Colonial Domination." Standard Times Press. N.p., n.d. Web. 25 Apr. 2016. <http://standardtimespress.org/?p=6223>.