James Leroy Wilson's blog

Saturday, July 22, 2006

Minimum Wage

This is the kind of literature that makes me identify with the "Libertarian Left." From Sheldon Richman:
It is essential that principled opponents of the minimum wage not appear insensitive to the plight of low-income workers. Some people of course are responsible for their economic plight, but many others are put at a disadvantage by the mercantilist, mixed economy we live in. (Let's not forget, it's not laissez faire out there.) In opposing the minimum wage we should champion the disadvantaged by emphasizing that:
Any regulation, tax, and trade restriction that stifles the formation of new businesses, and thus competition, reduces the bargaining power and self-employment options of workers -- low-income workers most of all. Less bargaining power equals lower wages.

Every intervention that raises the price of housing, clothing, food, and medicine harms low-income people most of all.

Every land-use rule and all government landholding keeps the price of real estate and rents artificially high, harming low-income people most of all.

The actions of the central bank devalue people's money, harming low-income (and fixed-income) people most of all.

A rotten education system harms the children of low-income people most of all.
Simply put, every interference with free people in the free market is first and foremost an attack on the poorest, most vulnerable in society. But notice that each intervention has its beneficiaries; together they constitute the privileged class. The chief enemy of the vulnerable is the corporate state, the system of mercantilist privilege for the politically connected that constrains the creation and diffusion of wealth. In this light the welfare state (the minimum wage and such) is revealed as a way to keep the vulnerable from catching on and rocking the boat. The Manchester liberals Richard Cobden and John Bright put these considerations at the heart of their nineteenth-century peace-and-free-trade movement.

People of good will never stop voting for the minimum wage until they realize, first, that economic laws are implacable; second, that pretending the laws don't exist hurts those they wish to help; and third, that the best way to help is to sweep away all government privilege. Genuine liberals must rededicate themselves to making their movement a people's movement.

1 comment:

  1. Minimum wage is not the first thing I'd cut if I were king. I'd start with the corporate privileges and work down to the minimum wage.