Libertopia: A Political Fable

Integrity is the first casualty. Robert Bell of Libertopia has A Political Fable to tell. It involves an agency out to do good ends through questionable means. Suddenly, it faces the fruits of it's labor--and balks:

Once upon a time, there was a political movement afoot—one in which do-gooder Lefties sought to use state coercion to compel employers to pay ‘unskilled’ workers far more than the market will bear. The stated goal was to replace the ‘minimum wage’ with a more robust ‘living wage’.

"The living wage movement has been around for about 30 years, and has generally been led by union interests. But City Journal credits another organization - the Association for Community Organizations for Reform Now (ACORN) - for the recent spate of successful city ordnance campaigns across the country. Left-leaning weekly The Nation describes ACORN as one of "two national organizations outside the union movement that have been particularly active in promoting the living wage movement."

Things seemed to be going along swimmingly for ACORN, until practical economic realities interrupted their ideological bliss.

In 1996, ACORN's California offices actually filed suit to exempt the organization from the state’s minimum wage laws- at the time, just $4.25/hour.

Suddenly, they're haunted by their own words:

"In its ‘Activist Guide’, written by Wayne State Professor David Reynolds, ACORN dismisses claims that higher minimum wages force business to cut jobs for its lowest-paid workers. That's 'low road' thinking, Reynolds scolds, the kind of philosophy that 'seeks short-term increases in the bottom-line by directly lowering costs and casts high wages, benefits, and other worker protections as obstacles to competition.'

Now read what ACORN wrote in its brief to exempt itself from California's minimum-wage law:

'California's minimum-wage laws…affect the quality and quantity of staff which Plaintiff can retain….the more that ACORN must pay each individual outreach worker…the fewer outreach workers it will be able to hire.'

Nothing like falling back on one's principles when faced with a hard decision. Ah, the wonderous example of the Reasonable.

Those interested in justice would do well to master economics. Scarce resources have alternative uses. People engaged with other people in mutually beneficial exchange tend to make the most efficient use of these resources. Why? Because people are motivated to make the best deal for themselves. They focus their expertese on ensuring they're not taken. Buyers research the product or service they wish to use. Sellers research the best way to deliver highest quality at lowest price. Thus, they manage their resources to minimize loss and maximize gain. Government planning can't do this. Why? No bureaucrat is as invested in efficiency as participants in a market exchange. Regulations count, not incentives. Budgets need to be spent with the proper forms i-dotted and t-crossed. Besides, does a bureaucrat have the expertese in the multiple sectors of the market to make informed decisions about product/service cost? Whether or not a price is a "fair" price or not? I doubt it.

The role government can play is to ensure that the playing field between buyer and seller is level. This applies to employer and employee as well. Every potential worker should have every opportunity to negotiate as competative a salary as his skills allow. Should he not have them, he can get the training necessary to acquire them. This is another way in which government can help. Should the market fail to provide such training, the government can contract with the best providers of this expertise and have them offer their services to those in need.

In other words, if government intervened to suppliment the market and regulated it to curb it's abitrary excesses, then perhaps it could better protect those citizens most hurt by a market economy. Too often, however, those that seek social justice have welfare state on their mind. Unfortunately, the most needy are not helped by discouraging the most proactive producers in an economy to go underground or stop producing. Welfare statism has this curious effect on the participants in the market. Laws and regulations may not change people's incentives. If laws demand a wage that employers believe is above market value, then employers will hire less people.

Even ACORN has found this out. Perhaps Social Justice enthusiaists can learn from them. If they're interested in achieving authentic social justice, then perhaps it's time to give up 30 years of failed policy and embrace new approaches. Long after the last War on Poverty law hit the books, the poor remain with us. Isn't it time to get going with something else?