2014-02-03

A Kinder Capitalism

A problem being faced in my native country right now is a rigidly ideological laissez-faire philosophy that has come into fashion. It finds voice on the Net.

The statutory minimum wage in the States is currently 7.25 USD per hour; a recent proposal is to raise it to 10.10. Here is an argument an opponent of the proposal—let us call him Mr Snyder—made in a forum recently.

As Adam Smith said, two individuals will not enter into an agreement with each other unless they both believe that it will be beneficial to them.  Once they have reached an agreement what gives you or anyone else the right to change that agreement?  What makes you more special than the rest of us?

Notice the argument Mr Synder is not making. He is not saying that the current proposal on the table is an impractical idea at this particular point. He is saying all laws regulating employment conditions are illegitimate. Once two parties have agreed to a contract, no one has the 'right' to change step in and change the expectations.

My response follows.

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As you know, Mr Snyder, slavery is an extreme form of exploitation. But slavery is not the only form exploitation takes. Sometimes exploitation takes the form of a voluntary contract between two parties.

Extremity, misfortune, lack of options, desperation—these ongoing realities you cheerfully ignore. Sensible people take note of reality. And they see that some realities compel people to sign contracts that are lopsided.

Adam Smith understood this. People who quote him? Not always.

History shows that people in positions to take advantage of the desperate often do. When money stands to be made, the admonishment of conscience to treat another as one would be treated is often a poor enforcer. Those who exploit others are not bad people, understand. They just have pressures of their own. They must beat the competition. They must keep costs down. They are running businesses, not charities.

How 'free' is a lopsided agreement entered into by a person with little bargaining power? As free as any agreement can be that one makes with an ax at one's neck.
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A time existed in Europe and its territories when workers, for lack of alternatives, 'freely' agreed with their employers to labour for long hours in dangerous jobs for very low pay. The pay was so low that supporting a family on the income proved impossible. The employers magnanimously began employing their workers' children as well. So off the children went to work long hours in dangerous factories, in the process missing out on their chances at an education or any sort of childhood we would recognise as proper. The children would grow up to continue working in factories as they lacked skills for anything else. They would need to send their own children to work in turn, and the pattern would repeat for generations.

Workers who got injured, as many did, lost their jobs. There was no insurance, there were no pensions. Permanently disabled workers faced bleak prospects. Their wives would often turn to domestic service if they could, to prostitution if they couldn't, or to begging in streets if they could do neither.

Now, you can argue (as you may be sure factory owners of the time did) that these working families still reaped some benefits from all this. Weren't they paid wages? Didn't they get to eat? Didn't they enjoy honest employment rather than sinking to the level of thieves and beggars? Weren't they free to leave their jobs for other jobs? You could, if you want, call the arrangement ideal. Everything about it was the result of pure business logic.

Many people at the time, horrified, called the arrangement other things. William Blake shared his word for it in a poem titled 'Jerusalem'. Referring to a legend that Jesus of Nazareth had visited the British Isles as a boy, Blake asks:
And did the countenance divineShine forth upon these clouded hills?And was Jerusalem builded hereAmong these dark Satanic mills?
That was Blake's word for what he saw. Satanic.

Years later a philosopher, Karl Marx, looked upon an industrial situation that was little improved. Like Blake he was appalled. Marx decided the answer was to do away with profit altogether. Workers would have to band together, overthrow their employers, and take direct control of industry. As Marx imagined it, this would launch a new society with no bosses or governments; needs would be met spontaneously by selfless workers in a classless society. His vision was too utopian to be realistic, but Marx's dream was a comforting one in a world of nightmares on every side. And it has proven seductive.

Marx's biggest mistake, though, was this: he underestimated the power of open societies to reform themselves. As democracy took root, and with it an independent press, discussion continued about the factories. Outrage built and led to changes. People decided that cruel exploitation was a blight on a community. They saw that the waste of human potential was waste for which all paid a price.

Laws were enacted to limit hours in the work week, pay overtime rates to those who voluntarily took on more work, compensate the injured and disabled, outlaw child labour, and pay a minimum wage.

No worker, the community decided, should have to put his children to work in a mill in order to pay for food and a roof. The community found it reasonable to expect business owners to pay workers enough for their hard work that they could manage to stay out of desperate poverty. Any business that could not afford to do this much could damn well fail, and good riddance. Let those businesses take the lead who best meet human needs.
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Which bring us to today. The people who are talking about a living wage have paid attention to the lessons of history.

I notice that your opposition, Mr Snyder, is not to this or that hike amount, but to the idea of having a wage floor at all. You really are advocating a no-protection-for-anyone, let-owners-do-as-they-will society.

Unfortunately, Mr Snyder, your way of doing things has been tried. Previous generations saw that business will ever and only do what is good for business. It is up to a community to do what is best for a community.

You tell us we need more Satanic mills. We choose instead our bows of burning gold, our arrows of desire, our spears as clouds unfold, our chariots of fire.

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