Tuesday, December 02, 2008

Econ 101

From I John 2:

15Do not love the world nor the things in the world. If anyone loves the world, the love of the Father is not in him.

16For all that is in the world, the lust of the flesh and the lust of the eyes and the boastful pride of life, is not from the Father, but is from the world.

17The world is passing away, and also its lusts; but the one who does the will of God lives forever.

"The lust of the flesh, the lust of the eyes, and the pride of life." Years ago, a Sunday school teacher summarized the ethic for me thusly:

I want it.

I need it.

I deserve it.

Is there any doubt that this describes the ethic that brought our economy to the edge of the abyss? From the borrowers who bought more house than they could afford and spent their inflated home equity on consumer goods to the politically connected Fannie Mae execs who greenlit dangerous risk while collecting seven-figure bonuses: all are implicated in the ethic of entitlement that will pass away with the world it governs.

I thought of this the other day while reading Bobvis' post on the minimum wage. Before it degenerated into name calling, commenter Biloo's defense of a minimum wage relied specifically on this ethic of entitlement: he wants it, therefore he must deserve it. Indeed, he can't imagine any other basis:

[I]f it's not about what people "deserve" or have a "right to" why have such an intervention in the first place?

I can't think of a better reply than Bostonk's:

You can't have a "positive freedom" without essentially entailing some other unnamed party(s) to provide it, probably free of charge.

I have, late in life, developed a Burkean skepticism of the rights-based paradigm as an approach to social philosophy; however, if there is such a creature as a "right", surely the "right of property in oneself and the fruit of one's own labor" must rank as the most fundamental.

But as I have said before, I am no libertarian. Since my blog is an unlikely hangout for doctrinaire libertarians, no thoroughgoing refutation of libertarian philosophy is necessary, but I will say this: rights may be possessed individually, but they are secured collectively, and that collective requires accommodations that in practice are worked out politically. If indeed a collective (by which I mean political community) is to be a bulwark of security rather than an engine of predation, it absolutely, with 100% certainty, must be composed, not of a random collection of individuals, but of a community with a shared sense of its own destiny. For the same reason that a buffalo has no "rights" enforceable against a lion, so too the members of a community only have "rights" to the extent that the rights serve the interests of all rather than some.

The reason I am much more sympathetic than I once was to calls for a minimum wage is that our governing elites have forgotten this. Through a combination of legal, regulatory, trade and immigration policies, they have systematically driven the demand for low-skilled labor overseas while importing massive numbers of low-skilled laborers. The result is exactly what the supply-and-demand curves would predict: "the fruit of one's labor" isn't nearly as fruitful as it once was for the lower end of society.

Thus has our community of interest been fractured, and nowhere is this more evident than in the assertion of "rights" against the labor of others. Indeed, such assertions are the antithesis of rights, but rather the demand that the political community become an engine of predation. The libertarian may yelp all he wants; so too may the buffalo. Both are powerless without a community.


Brandon Berg said...

Since my blog is an unlikely hangout for doctrinaire libertarians...

What am I, chopped liver?

What do you think of the argument I advanced in the same thread over at Bobvis, that even if we regard subsidizing the wages of the working poor as desirable, the minimum wage is a lousy way to do it, and that the main reason it's popular is that it appeals to anti-capitalist prejudices?

Also, your argument seems a bit off the mark, as the vast majority of even low-skilled workers have jobs paying well above minimum wage. Even before the last minimum wage increase, earning less than $7.25/hour would have put you in the bottom 2-3% of adult full-time workers. I suspect that these are people who are marginally employable even in the best of circumstances; foreign competition is likely the least of their problems.

trumwill said...

as the vast majority of even low-skilled workers have jobs paying well above minimum wage.

Be that as it may, doesn't the raising of the minimum wage have something of a ripple effect? It seemed that most jobs that hovered anywhere near the minimum wage went up when the minimum wage went up to $5.15 an hour because jobs that paid $.50 than minimum wage wanted to keep that slight advantage and jobs that paid $.50 more than that wanted the $1.00 advantage over minimum wage and so forth.

Φ said...

Brandon: I concur that there are potential drawbacks to raising the minimum wage, and does nothing for the guys making $10/hr in a job that once paid $15.

Trumwill: your speculation about a "buoyancy" effect on wages further up the chain is certainly plausible. I'd like to see a study, of course, but one of the things that bother me about minimum wage increases is that they seem to be undertaken willy-nilly without anyone asking these kinds of questions. For instance, do they lead to job cuts? I don't know, but the Really Smart People in Congress don't seem to know either, or particularly care.