Question: From reading about the Industrial Revolution and past attempts at laissez-faire capitalism, it seems that the latter led to extremely poor working conditions and an environment where the workers have essentially no rights in terms of the workplace. From the Objectivist standpoint, how does laissez-faire capitalism protect workers' rights? How does it combat against the exploitation of the workers? And how does it combat the poor working environments of the Industrial Revolution, as seen in the factories of the time?
Answer: Workers' pay in the laissez-faire era of the19th century rose steadily with the innovations that increased productivity and lowered prices. One has to realize that at the beginning of the industrial revolution, poor people chose to work under very difficult conditions, because that compared favorably to the alternatives available. We see this in the third world today, where the fortunate poor are "exploited" by capitalists, and the unfortunate poor scrounge for survival in shanty towns and on every-smaller plots of land in the countryside. The really fortunate live in well-run countries where "exploitation" takes hold long enough for development to take hold. Look at the history of Hong Kong for a 20th-century example of laissez -faire (or something very like it) at work. What happened to unemployment and workers' pay in Hong Kong between 1950 and 1990? The radical improvement was the effect of laissez-faire, as was the radical improvement in America over the 19th century.