Tuesday 1/29
Chapter 19 Minimum Wage Laws

I came to this chapter with my eyes open because I have always had a negative opinion of minimum wage but when my son asked me why I sounded a little weak.

You cannot make a man worth a given amount by making it illegal for anyone to offer him anything less. You merely deprive him of the right to earn the amount that his abilities and situation would permit him to earn, while you deprive the community even of the moderate services that he is capable of rendering. In brief, for a low wage you substitute unemployment. You do harm all around, with no comparable compensation.

I thought that first line hit the nail on the head. You cannot make a person worth what they are not worth.

This is perhaps as good a place as any to point out that what distinguishes many reformers from those who cannot accept their proposals is not their greater philanthropy, but their greater impatience.

The above quote also seemed to me to explain some of my confusion. We call our impatience philanthropy. I am guilty of this in my own small sphere as I tend to be impatient.

So government policy should be directed, not to imposing more burdensome requirements on employers, but to following policies that encourage profits, that encourage employers to expand, to invest in newer and better machines to increase the productivity of workers — in brief, to encourage capital accumulation, instead of discouraging it—and to increase both employment and wage rates.

The final paragraph of the chapter was an excellent summation. Our family has owned several small businesses over the years. By the time we obeyed all the laws, especially in NJ, and insured ourselves against litigation, we were absolutely unable to make a profit. Our employees made money but our business did not.

The next chapter is on labor unions another economic subject that has touched our family.

Chapter 20 Do Unions Really Raise Wages

The thing that frustrates me about our own economy and he hits on it in this chapter on unions is that productivity is really not on the table at all. It has always been my belief that good workers are desired in industry and those who work hard and learn quickly will rise to the top. Increasingly, it appears that this is not the case at all and perhaps American industry is really about just spreading jobs around without any real concern for productivity. Where can this be heading? I personally believe that the current college situation where 80% of the population attends college is just a way to keep workers out of the work force because the economy doesn’t need them. The economy does need to support a massive higher education structure. Therefore not only is productivity not necessary but true education is totally beside the current college point. I don’t suppose anyone who reads this blog will be surprised that on my last few days of blogging I bring up this point.

Chapter 21 “Enough to Buy Back the Product”
Chapter 22 The Function of Profits
Chapter 23 The Mirage of Inflation
Chapter 24 The Assault on Saving

In the final chapter, The Lesson Restated Hazlitt borrows the story of The Forgotten Man:

The reader will remember that in Sumner’s essay, which appeared in 1883:

As soon as A observes something which seems to him to be wrong, from which X is suffering, A talks it over with B, and A and B then propose to get a law passed to remedy the evil and help X. Their law always proposes to determine what C shall do for X or, in the better case, what A, B and C shall do for … .. What I want to do is to look up C…. I call him the Forgotten Man…. He is the man who never is thought of. He is the victim of the reformer, social speculator and philanthropist, and I hope to show you before I get through that he deserves your notice both for his character and for the many burdens which are laid upon him.

There is much to this forgotten man that goes even beyond economics. If I may digress completely for a minute I can’t help but think of all the ordinary Christian husbands who are the victims of the Utopian ideals of the men their wives follow.

The last part of this book seemed easier to read, probably because it hit closer to home. The agrarian model is helpful here because it lets us glimpse a different sort of economy. I am not sure it is an actual solution. Although, if we have political and economic collapse we may all quickly resort to agrarianism. Once again, I am not one to hold out hope that things will change apart from a general collapse. I tend to see my job as educating myself and my children for a time when rebuilding begins. How weird is that?

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