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Talk About Labor-Market Power Continues to Be Cheap

Here’s a follow-up letter to a new correspondent:

Mr. D__ G__:

In your follow-up e-mail to this post you write that “The purpose of Daniel Kuehn’s point is not a defense of the labor theory of value or condemnation of [Adam] Smith. He merely is pointing out that the greater power that employers these days have over workers is the power of capitalists to exploit workers along the same lines which Marx warned about.” You conclude that Mr. Kuehn’s point is one that you “find very convincing.”

With respect, convince me that you’re convinced. Act on your conviction by going into business for yourself. If many workers in America today truly are underpaid, overworked, or both, by employers with too much labor-market power, you’ll be able to hire workers at bargain wages. You’ll then earn high profits as you bid up workers’ pay. Further, your lucrative practice of putting your time and money where your mouth is will perhaps inspire Mr. Kuehn – and others like him who insist that American labor markets are polluted with monopsony power in ways that can be countered with minimum wages and other government-imposed restrictions – to do the same. You’ll all do well by doing good.

Mr. Kuehn, alas, has for years asserted that many workers in America are exploited. Yet as far as I know he refuses to act on this alleged conviction by actually putting his money and effort where his mouth is. Because his assertion about exploited workers, if true, is pregnant with the potential for personal profit, Mr. Kuehn either doesn’t really believe his assertion about worker exploitation or, much more likely, his thoughts about the matter remain incomplete or shallow.

Again, if you’re really convinced by Mr. Kuehn’s assertion, prove it through your actions. Otherwise, don’t make a hypocrite of yourself by continuing to assert with your mouth and keyboard that you believe something to be true as you demonstrate with your time and effort that you obviously don’t hold such a belief.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030