What Do You Have Against the Poor; L.E. Read

528 THE FREEMAN September so long as there's freedom of com petition the consumer has his choice not only of which product to buy but who to believe. And notice what is the alternative in this world of imperfect human beings. The alternative, of course, is government control - still by imperfect human beings. So there is no way to render oneself invul nerable to the possibility of false, fraudulent, deceitful messages. It would be nice to live in a world where no deceitful men were present. It would be cheaper . You could believe any message re'" ceived. You wouldn't have to check out the credentials of every advertiser. But that is not the world in which we live. You check out the credit standing of individ uals, the character of people with whom you deal; and this is an un avoidable, necessary cost. To blame advertising for the imper fections and weaknesses of man kind is unfair. Advertising would exist under any. type of free mar ket system. Advertising would be less deceitful if men were less de ceitful. It would be more ethical, less offensive, if men were less offensive and more ethical. But advertising itself is an integral, inescapable aspect of the market economy. I) WHAT DOYOU HAVE THE POOR -----------LEONARD E. READ----------WHENEVER he hears someone de mand a minimum wage law or any other impediment to freedom in transactions, my friend asks in all seriousness, "What do you have against the poor?" His point is well-taken. Unquestionably, many sponsors of welfare schemes - the long-run effect of which is to kill the goose that lays the golden eggs - are well-intentioned. Their hearts, if not their heads, are in the right place. The idea that they are doing offense· to the very per sons they wish to help is a shocker - hopefully, an eye-opener.

1972 WHAT DO YOU HAVE AGAINST THE POOR? 529 Perhaps the first shock would stem from the thought that a minimum wage law might do in jury to anyone at all. Possibly to the wealthy employer, but surely not to the poor!· The fact,· however, is that those who have little to of fer in the way of marketable skills are marginal producers at best; their services are wanted by others only at very low wages. In deed, the total disappearance of such marginal producers would scarcely affect the overall econ omy. So my friend is quite right. It is primarily, if not entirely, the poor who stand to lose if wage rates are pegged artificially high; those who sponsor minimum wage laws behave as if they hold a grudge against the poor. The fact that a fair share of these sponsors act from motives of sympathy or pity - that they bear no grudge - in no way changes the consequences of their actions .. Nonetheless, they victirp. ize the poor. They hurt most the ones they love - and all because they fail to recognize these simple facts: 1. The eternal problem of eco nomics is to overcome searei ty.

2. Plenitude is achieved by the application of human energies to natural resources and to the ex change of the numerous speciali zations. 3. The value of anything to anyone is always a subjective judg ment - whatever one is willing to give up or trade for something else. 4. Freedom of production and trade - the free market - is the goose that lays the golden eggs and all impediments to this proc ess, to the extent of their force and coverage, are destructive - ob stacles to plenitude. 5. Minimum wage laws of say $2.00 leave unemployed all persons whose services are not of that much value to others. 6. To the extent of the produc tive potential thus unemployed, to that extent is the number of gold en eggs reduced. But far worse: to that extent is everyone who can not produce up to $2.00 an hour decreed waste and relegated to the economic scrapheap. Wage Floors Hurt the Poor Nearly all who think of them selves as professional economists, regardless of their differences on some matters, agree that mini mum wage laws inflict injury first and foremost on the poor. Even the avowed socialist, Gunnar Myr dal, the celebrated Swedish econo mist, turns thumbs down on this economic monstrosity.! The writ ings of economists in support of 1 See The American Dilemma (rev. ed.) by Gunnar Myrdal (New York: Harper & Row, 1962).

530 THE FREEMAN September this point are plentiful, indeed. However, not all sponsors of minimum wage laws are "good guys" lacking in economic sense. There are countless thousands, perhaps a majority, whose motiva tions are mercenary . The first type is to be found in labor un ion "leadership." The motivation here is to keep these low-wage, marginal producers off the labor market, that is, to eliminate them from. competition. Permit no one to wait on table for, say, $1.00 an hour, even if he wishes to do so, and the union gains a monopoly of waiters' jobs. Call this crass ma terialism or what you will, it is not inspired by sympathy or pity. The second type is to be found in political "leadership." The mo tivation here is to climb on the bandwagon of labor union popu larity in order to get elected to office. Sympathy? Hardly! As a novelist says of one of these characters, "He had learned to love the poor, profitably!"

Minimum wage laws generally call to mind only those legislative edicts bearing the label. In 1938 the minimum was 25 cents; in 1945, 40 cents; and since has risen step by step to $1.60. Presently, the proposal is $2.00. These edicts, however, are only the obvious. Every arbitrary wage coercively imposed by labor unions, over and above whatever the free market wage would be, is really a mini mum wage. The minimum wage for a captain of a 747 jet is $57,000 annually. Try to get the job for less! But stop not here. The tariff and all other restric tions to free and unfettered ex changes are, in a strict economic sense,minimum wage laws. Those who condemn minimum wage laws, so called, and lend support to other infractions of the free market such as wage and price controls are proclaiming their inconsist ency. Everyone of these fixities and rigidities - these closures of the market - wreak their hardship on consumers; and the poorer the person, the greater the hardship!

A More Helpful Approach What is the alternative? What advice shall we give the person who earnestly desires to help "the poor?" First of all, he must recognize :3nd respect as an individual the one he would love - which means to encourage but in no way to in terfere with that person's capac ity, will, and effort to help him self. In other words, afford him every opportunity to earn. his way. How earn it? By serving others, of course. How else does anyone earn anything! And what is the most likely opportunity for a poor man to earn his way? By selling his services to the highest bidder 1972 WHAT DO YOU HAVE AGAINST THE POOR? 531 in open competition. Let. buyers compete for his services - which means, in general, that the highest bidder will be the employer who can most profitably use that per son's services. That employer will earn a profit, not because he is ex ploiting anyone, but because he is most efficiently using scarce re sources for purposes that consum ers want and can afford. And "the poor" will reap benefits both as employees and consumers as they move upward out of poverty.

The question is this: how can these countless thousands in the labor union and political cate gories so flagrantly abuse the poor and be applauded rather than con demned .for their actions? The an swer is that labor union people and politicians who sponsor this nonsense are doing precisely what most citizens believe to be right. The overwhelming majority of cit izens, operating on good inten tions, fail to recognize that im pediments in the market must frustrate their objective. Were the consensus free-market oriented, the political meddlers would not get to first base with their schemes; they would be thrown out of office. The next question is, what shall be done to bring more light into this darkness? Perhaps it boils down to this: more individuals than now learning to respect the preferences of others as well as their own. If I prefer to wait on table for $1.00 an hour, why should not this disposition on my part be as much honored as that of another who prefers to be President of the U.S.A.? Maybe you prefer teaching for the sheer joy of it - psychic gain - to run ning a cannery where you might make a fortune - monetary gain.

I say, blessings on you and on all others whatever their preferences, so long as you and they are peace ful. This is no more than simple justice, and anyone who acts to the contrary dons the robes of a dictator, intending to run the lives of others. A Fount of Wisdom This simple justice and the aforementioned simple facts would seem to be within the grasp and the practice of a majority of citi zens. It is my contention that these are attainable achievements in the moral and economic realm. By and large, however, they are not attained. Why? What is the im pediment that hinders us from ac tually attaining the ends which in fact are within our power to at tain? A priceless answer if it can be discovered! Let me share a thought that is becoming more and more a conviction. The essense of this thought was expressed by Ralph Waldo Emerson: 532 THE FREEMAN September We lie in the lap of immense intel ligence, which makes us receivers of its truth and organs of its activity.

When we discern justice, when we discern truth, we do nothing of our selves, but allow. a passage of its beams. (Italics mine) I have quoted this before, cer tain that it expressed an impor tant truth. However, it took the remarks of a recent acquaintance to .help me realize its full mean ing.This individual, as we met for the first time, acknowledged how helpful my writings had been, and then added, pointing to the head, "It, is all here. You have merely helped me put together and to bet ter understand that which is al ready within me." This is an in sight that rivals Emerson's! Emerson's point now seems clear to me and it helps to explain what stands between the attain able and its attainment: a failure to realize one's potential or an unFrom Within willingness to discover and to heed the truths within. As Emerson so eloquently phrases it, we do, indeed, "lie in the lap of an immense intelli gence." As with all radiant en ergy, this intelligence is in con stant movement and it flows through all life. The problem of gaining understanding is one of arresting "its beams," of inter cepting or appropriating that which already is within us or is passing through us.

We can be helpful to one an other, not by posing as this in telligence but by using, express ing, sharing such of this mysteri ous energy as we may be fortunate enough to intercept. Once this way to enlightenment is perceived and practiced - a near reversal of present methods - then we may befriend the poor, not merely in proclaimed intentions but in real ity. Our hearts and heads will be working in harmony. ~ JDEAS ON LIBERTY No CHURCH has ever gone into politics without coming out badly smirched. Individual Churchmen may be, and ought to be, if they are well informed, interested in schemes of social legislation; but to advocate a sloppy socialism~ under the name of "Christian pol itics and economics" is, in my opinion, an impertinence .... Christianity aims at saving the soul-the personality, the na ture of man, not his environment. In direct opposition to Marxian socialism, we are taught that from within, out of the heart of man, comes all that can exalt or de,file him.

WILLIAM RALPH INGE A Closer Look at CHARLES E. WEBER WHEN WE CONTEMPLATE the gold coins from previous centuries we are painfully reminded to what extent modern man has lost his monetary freedom and hence an important aspect of his economic freedom. For thousands of years, with only relatively few and brief exceptions prior to 1915 (or 1934 in the case of the United States) nearly all nations in the main stream of human progress have enjoyed the advantages of the use of gold coinage as a monetary me dium. Cowrie shells, stone wheels, rolls of bright bird feathers, salt, bronze ingots and the like were Dr. Charles E. Weber received his Ph.D. from the University of Cincinnati in 1954 on the basis of a dissertation on the incunabula (books printed prior to 1501 A.D.) in the German language. After military service in World War II, at times as a member of intelligence units, he resumed his education and started his teaching career at the University of Missouri and the University of Tulsa, where he has been teaching since 1956. except for four years at Louisiana State University (1962-1966).