© 2016 Michael Swickard, Ph.D. “Underlying
most arguments against the free market is a lack of belief in freedom itself.”
Milton Friedman
America’s “free markets” are more
free than markets in some other countries. However, our markets are not really free
because our government controls so much of them. Know this: markets cannot be
controlled and free simultaneously.
Let’s use two terms interchangeably:
free markets and voluntary exchange. Voluntary exchange is when people are free
to trade with each other without government interference. When the government
prevents voluntary exchange between citizens through rules and regulations, there
cannot be free markets.
In Venezuela there are daily riots
because the Socialist Government meddled in their markets until those markets
collapsed. Venezuela has gone from being one of the richest countries in the
world to one of the poorest in just a few years of mismanagement. They have
almost limitless natural resources. Without free markets their citizens get no
benefit from those resources.
The term, “profit” is seen by some
Americans as being bad. Much of our political dialog is about businesses making
too much profit so the government must intervene. Consider: if there is no
profit, then what’s there to tax? Importantly, without profits, what’s there to
continue the business?
In free markets if there are high
profits it inspires competitors who undercut prices to gain market share. So
where do “obscene profits” come from? They come when our government protects
one business over others so that competitors cannot compete. The “obscene
profits” problem is too much government control in the markets.
In Venezuela, with government
control of the markets, the shelves are empty. In our country they are full but
our government is moving towards the Venezuelan controls.
One destroyer of free markets is the
minimum wage. There should never be a minimum wage in a free market. Each person
should trade their labor for an employer’s money as they see fit. How did we
get the minimum wage?
According to economist Dr. Walter E.
Williams (and others) the minimum wage was created to further racism. (http://townhall.com/columnists/walterewilliams/2016/01/13/minimum-wage-dishonesty-n2102804)
In the 1920s, Blacks would work for
less money than Whites. Racist employers had a price to pay for being racists.
If they only hired Whites, it cost them more money. Political leaders passed
the 1931 Davis-Bacon Act to thwart Blacks undercutting Whites. It created the
minimum wage so both Blacks and Whites had to be paid the same. Then there was
no penalty for racism.
For Americans, the ability to
negotiate our own wages should be our right. But the government doesn’t allow
me to work for what I think is right to get a job even though I am a free
emancipated citizen. Many people caught up with progressivism do not believe in
freedom. Also, with the rising minimum wage comes rising unemployment. How is
being unemployed ever better than employed?
If the government doesn’t like what
someone is paid then reinstitute the 1973 Comprehensive Employment and Training
Act where the government paid part of an unskilled person’s wages to get them
job experience.
Requiring employers to pay more than
they think is justified, based on the return on investment in those employees, results
in unskilled labor not getting hired. Those potential employees then do not get
experience to get the next job. It causes discrimination against unskilled
labor, mostly young people.
The most ridiculous thing said is
that some people are not making a living wage. If people can live and continue
then it is a living wage. I have worked for very little money at times. I
learned as much as I could and then stepped up to a better paying job.
The government mandated minimum wage
is neither compassionate nor kind. It leaves the most vulnerable Americans in
perpetual bondage because they don’t get job experience. They need job
experience to prosper.
The government lives to control
people and markets regardless of the damage it does to our people and the
economy. For true prosperity Americans must have free markets. Otherwise our
economy will descend into a Venezuela. To start we must abolish the minimum
wage so young people get needed job experience.
To believe in free markets, we must
first believe in freedom.
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1 comments:
Astute! Remarkably well stated and insightful indeed.
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