Tariq is a hand on the gantry cranes of the Sohar port facility I operate through a Muscat holding. He’s 22. He’s from Sylhet. His passport has been in my office safe for 9 months. Victoria Coates writes in Fox News this week to praise Oman’s bright economic future and its 19-place jump in the Heritage Foundation’s freedom index, warning against Iran’s silly little shipping tolls in the Strait. She’s correct to praise the future. She’s looking at the wrong ledger. The IMF estimates the GDP per capita at $21,645. That number is a masterpiece of averaging. It includes my dividend and excludes Tariq’s water. The real toll isn’t on the tanker. It’s on the wrist.
Let me put the freedom index where you can read it. The crude oil and the shipping containers full of your sneakers and your routers pass through my cranes. You’re holding the fruit of Tariq’s shoulders in your hands right now. You think you paid for it at the register. You didn’t. I priced the register. I priced the shipping. And I priced Tariq’s water. Read the next sentence twice. The gantry cab runs past 110 degrees in the July sun. The chilled-water station that would cool his cab costs me $412.
I haven’t bought it.
Tariq drinks the warm water he brought in his own plastic jug. His kidneys take the heat. I keep the $412. God loves a disciplined portfolio.
A visa-bound hand, by which I mean a young man whose legal residency expires the moment my thumb turns on the sponsorship transfer. That’s what Coates calls “opening up Omani businesses to greater foreign investment.” The foreign investor gets a perfectly captive labor pool. The worker gets the privilege of breathing. The apostle Peter anticipated the arrangement two millennia ago:
“Slaves, in reverent fear of God submit yourselves to your masters, not only to those who are good and considerate, but also to those who are harsh.” — 1 Peter 2:18
The text foresaw the harsh master. It didn’t authorize the Heritage Foundation to audit him.
Take the same law down the pier to the visa-processing annex. Rizwan is Tariq with a broker receipt. The same captivity, priced differently. Rizwan paid a broker in Dhaka $3,400 to get the job in my yard. I didn’t collect the fee. I don’t have to. The passport in my safe is the collateral. If Rizwan walks, he defaults on the broker. The broker sends his cousins to collect in Sylhet. I get a worker who can’t quit. The broker gets a debt that pays itself. The state gets a transformative advancement in economic competitiveness. 3 men. One chain. The chain is priced out of the worker’s own desperation.
Now walk the same pier to the rebar deck of the Vision-2040 hotel tower. Yusuf is Rizwan with a finance ledger. He came from Kerala. He paid a labor office in Kochi $1,140 for the visa category and a 4-month wait. He is 28 years old. He has been on my deck for 14 months. His wage is $260 a month. Then the deductions land.
Yusuf’s recruitment-debt service is $76 a month — paid to a Kochi finance house that remits to the agency that remits to the shell that owns me.
His labor-camp room is $41 a month.
His transport to the deck is deducted at source.
His meals are deducted at source.
His mandatory medical — for the visa renewal — is deducted at source.
After all of it, Yusuf clears $91 a month. He sends $70 of that to his mother in Thrissur. He keeps $21 for himself.
$76 is the price of Yusuf’s own bondage, paid monthly, in a country Heritage just ranked 39th freest on earth. Yusuf calls this his bondage. The agency calls it his investment. The Vision calls it his opportunity. I call it a transfer item. The deck doesn’t call it anything. The deck just pours concrete.
I want to be precise about what I celebrated. The Oman Vision 2040 labor reforms I praised at the time didn’t abolish the sponsorship. They didn’t give Yusuf the right to leave his employer. They gave him the right to pay for the privilege of leaving, at a fee the agency sets and the state collects. They didn’t raise his wage. They monetized his migration. Sit with that. Let me show you what 19 places looks like at the altitude where I sponsor it.
I pay $2,360 a month for the Omani citizen on the same crew. I pay $281 for Yusuf. The differential, across 14 workers and the 14 months of construction remaining on the tower, compounds to $109,442. That is what the labor-freedom reform was worth to me. The Index celebrated it as a climb. I celebrated it as a dividend.
Widen the frame. The Index doesn’t measure whether the worker is freer. It measures whether the worker’s freedom is priced. A country where the worker pays for his own recruitment scores higher than a country where the employer pays for it, because a higher score rewards the country whose market has been liberalized enough to surface the cost of bondage as a line item the bondage itself can be charged against. Oman climbed 19 places by climbing onto Yusuf’s back. This is the oldest trick in the liberalization playbook. Reclassify the employer’s overhead as the worker’s private investment, and watch the freedom metrics soar. I am not a glitch in Oman’s bright future. I am the load-bearing pillar of it. The architecture doesn’t change. Only the lighting does.
By their fruits ye shall know them. Mine are dividends.
The Strait of Hormuz is a geopolitical toll road. Iran wants to charge the tanker. I charge the man who loads the tanker. Iran’s scheme is a tariff. Mine is a theology. The historical arc is the same one I’ve walked before: the East India Company chartering the seas, the company town owning the dirt, the modern free-trade zone owning the visa. The per capita figure rose because the labor cost fell to zero. The state calls it resilience. I call it Tuesday.
Set that against the next number. The Strait they want free is free. The shipping lanes carry the oil. The tankers dock at the ports the regional cohesion built. The regional cohesion runs on the towers Yusuf’s hands poured. The Strait is the dividend’s distribution channel. The sponsorship is the dividend’s production floor. Both are running. I’m told the tankers that keep the Strait free will pass their cost to the pump at the station you filled this morning.
I haven’t traced the pump.
The dividend is the dividend. The tower’s margin is the only one I open. The port is very, very bright.
Sterling A. Varice holds the Hayek-Friedman Chair and serves as Dean of Instruction at Warden University’s College of Business and Economics in Richmond, Virginia. He is the author of three textbooks: Divine Mandates for Labor Utilization, Social Obligations for Profit Maximization, and Calibrated Deprivation: A Manager’s Guide to Employee Motivation.