Monday, January 22, 2007

"Minimum-wage laws are the enemy of the disadvantaged"

Via the Von Mises Institute, George Reisman demolishes the arguments of minimum wage advocates. Warning: those offended by rationality and common sense enter at your own risk. The London Fog is not responsible for any worker's uprisings or party purges that may result as a consequence.

When it comes to matters such as the theory of evolution and stem-cell research, so-called liberals—i.e., socialists who have stolen the name that once meant an advocate of individual freedom—ridicule religious conservatives for their desire to replace science with the dictates of an alleged divine power. Yet when it comes to matters of economic theory and economic policy—for example, minimum-wage legislation—these same liberals themselves invoke the dictates of an alleged divine power. Their divine power, of course, is not the God of traditional religion, but rather a historically much more recent deity: namely, the great god State.

Traditional religionists believe that an omnipotent God came before all natural law and was not bound or limited by any such law, but rather created such natural laws as suited him, as he went along. Just so, today’s liberals believe, at least in the realm of economics, that the State is not bound or limited by any pre-existing natural laws. In the case in hand, the State, today’s liberals believe, is free to decree wage rates above the level that would exist without its interference and no ill-effects, such as unemployment, will arise.

[..] What is present in this analysis is merely an application of Henry Hazlitt’s one-sentence summary of his great classic Economics In One Lesson: Namely, that “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”
Do be sure to read the whole essay.