My Take on How Minimum Wage Laws Work:
Capitalism is regarded as a just system by its proponents because it is voluntary. That voluntary nature is the virtue of capitalism. As John Galt says in his “Trader Principle” quote from Atlas Shrugged, capitalism is based on consent rather than arbitrary commandments from some ruler or coercion from anyone in society. Consumers are free to buy products they want for the prices they find acceptable. Producers are free to sell what they want, produce what they want, and hire who they want. And workers are free to work where they want as long as they are hired and an acceptable wage is found. But, how minimum wage laws work is they throw all of that out the window and replace consent with coercion.
Raising the minimum wage is a bad idea. It is a tool the socialist tyrants in charge are trying to use to bludgeon to death the private companies that always beat public programs. Those socialists are just upset that private companies are so much more effective than the government.
Furthermore, they are trying to use money to buy votes, as Benjamin Franklin warned about. But in this case they aren’t even using government money to buy votes, which is what de Tocqueville was concerned about American politicians doing. Instead, they’re doing something that is somehow far worse. They’re attempting to buy votes with private money in private hands. They’re robbing Peter to pay Paul, but in an indirect way. If that isn’t replacing consent with corruption and coercion, then I don’t know what it.
So, we’ve established that minimum wage laws replace consent with coercion. But, I haven’t quite answered the “how minimum wage laws work” question. Here’s how:
- First, the capitalist system builds a mutually beneficial and consent-based system (described well by Adam Smith in The Wealth of Nations) to handle the production and sale of goods.
- That system becomes more and more efficient and everyone in society becomes wealthier as more is produced more efficiently, as described in the best book about the Gilded Age, The Republic for which It Stands.
- Then, those who took the most risk start reaping the biggest rewards (which is why wealth inequality isn’t a problem) and their employees get jealous, so the minimum wage debate begins.
- Politicians take advantage of worker dissatisfaction to push for idiotic policies like a $15 an hour minimum wage in an attempt to buy votes.
- Workers vote for money, which Benjamin Franklin said would doom our democracy, and the politicians demanding a higher minimum wage are elected.
- Those politicians replace the efficient, market driven system of consent with one of coercion.
- The market becomes inefficient and prices rise as workers are fired or replaced with robots.
- Millennials blame capitalism and support socialism, thinking that will help.
If you’re like me, that process of how minimum wage laws work looks and sounds awful. I would much prefer a capitalist system of consent to a socialist system of coercion and government force.
Support capitalism, not minimum wage laws. Capitalism will save us and build a better society, if only we embrace the magic formula of economic success and let capitalism work.
By: Gen Z Conservative