Commenting on this post – in reply to an earlier comment (at the same post) by GMU Econ student Jon Murphy – Ronald Warrick writes:
Jon Murphy: Relying solely on market operations and incentives would appear to reduce poverty by killing off poor people. I think that is cheating a bit, don’t you?
Mr. Warrick’s comment (assuming that it is not offered in jest) displays deep ignorance of history. Forget, here, the fact that no force in history has done as much for the poor as have market operations and incentives. Nothing comes close. Read McCloskey. Read Hartwell. Read Ashton. Read Mokyr. Read Deaton. Read Phelps. Read even Braudel or Marx & Engels.
Instead – and because the Cafe Hayek post that spawned Mr. Warrick’s comment is on minimum wages – focus on the reality that the original impetus for minimum wages in the United States and Great Britain came from late-19th and early 20th century “Progressives” who proposed minimum wages as means of pricing ‘undesirables’ out of the labor market and, hence, from working and, in turn, surviving independently to have and to rear children. Read Leonard.
As pointed out often by those of us who are familiar with the history of minimum wages and who know the economics of this policy, these “Progressive” (and pro-apartheid) scoundrels got their economics right: they correctly understood that the ability to compete for jobs on the basis of wages was, for ‘undesirable’ workers, a key means of getting into the workforce and then being able to move up through its ranks. It is precisely because competitive market forces were understood to befriend ‘undesirables’ – who were, overwhelmingly, also poor – that “Progressive” (and pro-apartheid) scoundrels supported minimum wages.