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Posted By Don Boudreaux On December 4, 2013 @ 12:57 pm In Charity,Civil Society,Crony Capitalism,Growth,Other People's Money,Reality Is Not Optional,Seen and Unseen,Trade,Work | Comments Disabled

My former graduate assistant at GMU, Mark Perry, rightly applauds the Washington Post for speaking out against Uncle Sam’s long-standing policy of enriching politically influential sugar producers by imposing heavy taxes and prohibitions on American buyers of foreign sugar [1].  A slice from Mark’s comment on the Post‘s editorial (emphasis and link original):

Might be a good time to quote Frederic Bastiat,  [2]who sent this message to a friend four days before the noted, free-market French economist died in 1850: “Treat all economic questions from the viewpoint of the consumer, for the interests of the consumer are the interests of the human race.”

Here’s John Stossel on genuine charity [3].  A slice:

I applaud those who give to charity, but let’s not forget that it’s capitalists (honest ones, not those who feed off government) who do the most for the poor. They do more good for the world than politicians — and more even than do-gooders working for charities.

Shikha Dalmia – citing Deirdre McCloskey – is among those who are justifiably disturbed by Pope Francis’s stumbling and fumbling excursion into economics [4].  A slice (original link):

Indeed, far from promoting Social Darwinism that thrives on “the survival of the fittest, where the powerful feed upon the powerless,” as the Pope claimed, capitalism does the opposite: It fosters economic competition among producers so that consumers don’t have to compete for scarce goods. In 1900, it took an average worker in the West about an hour to earn a half a gallon of milk. In 1930, half an hour. And today? Scarcely a few minutes.

If all the profits of the rich in America were handed over to workers, notes [5] economic historian Deirdre McCloskey, the workers would only be 30 percent better off. “But in the last two centuries we’re 3,000 percent better off.”

The minimum-wage harms the very workers it is aimed at helping.  One harm, of course, is that such legislation makes many low-skilled workers unemployable.  Another harm – one always recognized by opponents of such legislation – is that it worsens job conditions.  Check out this report about an Amazon.com operation in Great Britain [6].  (HT Chris O’Leary).  Here’s a long slice:

In the BBC documentary, an undercover reporter armed with a hidden camera was put through his paces as a “picker” in a vast Amazon warehouse in Swansea, Wales, collecting customers’ orders. He was directed by a handset that gave him a set number of seconds in which to collect items from shelves and tracked his performance.

The reporter, a fit young man in his early twenties, was expected to walk as many as 11 miles in a 10-hour shift, and find an item every 33 seconds. Meeting his targets – to avoid the sack – sometimes required running.

His exhaustion was obvious as he panted to the camera: “I’ve never done a job like this before … the pressure is unbelievable.”

An expert on stress at work, Professor Michael Marmot, told the BBC that this type of work led to an “increased risk of mental illness and physical illness.”

However, compared to working conditions at factories in emerging markets that produce much of Amazon’s inventory, UK-based employees are fortunate, not least because they earn a wage that is regulated by the government.

If minimum-wage legislation weren’t so cruel the irony of this last paragraph would be delicious.  It doesn’t occur to the author that the strict work conditions in Amazon.com’s plant likely are, in large measure, the direct result of the very same wage regulation that the author praises as an alleged source of good ‘fortune’ for workers.  Here’s part of Chris’s e-mail note to me:

Of course, the next step in the process is that people will complain about the working conditions (that Amazon has to put in place in order to get value for the money they spend on labor) and force Amazon to not push their workers as hard. That will then force Amazon to substitute machines for people.

Minimum-wage proponents fancy themselves to be especially “Progressive,” humane, caring, and economically sophisticated.  They are none of these things.  Oh, I’ve no doubt that consciously the great majority of minimum-wage proponents feel themselves to be humane and caring, and they are, I’m sure, genuinely humane and caring toward their families, friends, and co-workers.  But truly humane and caring people do not cavalierly (as do proponents of minimum-wage legislation) support a government prohibition on would-be workers offering to work for lower wages if these would-be workers can’t find jobs at higher wages – especially when such a prohibition is based upon questionable evidence, convoluted theorizing, and officious ethics.  Most minimum-wage proponents don’t have bad motives; they have insufficiently thoughtful motives.

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[1] My former graduate assistant at GMU, Mark Perry, rightly applauds the Washington Post for speaking out against Uncle Sam’s long-standing policy of enriching politically influential sugar producers by imposing heavy taxes and prohibitions on American buyers of foreign sugar: http://www.aei-ideas.org/2013/12/washington-post-takes-free-trade-stand-against-big-sugar-and-the-protectionism-it-receives-at-the-expense-of-us-consumers/

[2] quote Frederic Bastiat, : http://books.google.com/books?id=nubGlAlKY_IC&pg=PA61&lpg=PA61&dq=%22Treat+all+economic+questions+from+the+viewpoint+of+the+consumer,+for+the+interests+of+the+consumer+are+the+interests+of+the+human+race.%22&source=bl&ots=vBjj0QlwJE&sig=YxkXc-1IHn1z2S7XtVJtKWBcv3g&hl=en&sa=X&ei=Z_KcUuU7xPSRB8_EgcgE&ved=0CDYQ6AEwAg#v=onepage&q=%22Treat%20all%20economic%20questions%20from%20the%20viewpoint%20of%20the%20consumer%2C%20for%20the%20interests%20of%20the%20consumer%20are%20the%20interests%20of%20the%20human%20race.%22&f=false

[3] Here’s John Stossel on genuine charity: http://reason.com/archives/2013/12/04/real-charity

[4] Shikha Dalmia – citing Deirdre McCloskey – is among those who are justifiably disturbed by Pope Francis’s stumbling and fumbling excursion into economics: http://reason.com/archives/2013/12/03/the-popes-self-defeating-anti-capitalist

[5] notes: http://www.deirdremccloskey.com/articles/bd/franklin.php

[6] this report about an Amazon.com operation in Great Britain: http://www.csmonitor.com/World/Europe/2013/1204/Amazon-UK-A-tough-place-to-work-but-Brits-keep-clicking

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