… is from pages 166-167 of the 1991 Liberty Fund edition of Bruno Leoni’s brilliant 1961 volume, Freedom and the Law:
Private owners are answerable to the community for the simple reason that they must depend on it both to sell their products and to buy raw materials, plants, services, capital, equipment, and so on, in order to produce what they intend to sell. If they refuse to meet the exigencies of the community, they lose their customers and cannot remain in the market. They must then give way to other, more “answerable” controllers of basic industries. On the other hand, the public authorities do not depend at all on the community in the same way, since they can impose, in principle, through laws [i.e., legislation] and orders, in a coercive way, prices of goods and services so as to take advantage, if necessary, both of other sellers and of other buyers. Moreover, they are not doomed to failure, as they can always compensate, at least in principle, for the losses they happen to cause to their industries by imposing further taxation on the citizens, that is, on the community they are purportedly “answerable” to.
Indeed so. In the case of minimum-wage legislation, proponents of this economically cruel policy add insult to the injury caused by government. The minimum wage condemns some low-skilled workers to the ranks of the unemployed and, hence, swells the rolls of people eligible to receive government welfare (even as, in doing so, it raises the household incomes of many affluent white suburban families whose teenage children have no difficulties finding jobs at the artificially high minimum wage). Yet Robert Reich and some other apologists for minimum-wage legislation blame private employers who continue to hire disproportionately large numbers of low-skilled workers for swelling government’s welfare rolls by not paying their workers even more.
So, in short, minimum-wage apologists such as Robert Reich assert, in effect, that (1) a government policy that reduces low-skilled workers’ employment options (i.e., the minimum wage) lightens the burden that government-welfare programs impose on taxpayers, while (2) employers, such as Wal-Mart, who actually employ lots of low-skilled workers, but (of course) only at low wages that reflect these workers’ low productivity, make taxpayers’ burden heavier. George Orwell could not have imagined such a twisted interpretation of reality.
