Property is so ubiquitous in society that it can be difficult to recognize its artificial status. Thus poverty is commonly viewed as a kind of natural and (merely) “unfortunate” lack, like lacking the strength or intelligence that could boost one’s opportunities. We thus (mis)conceive of the poor as lacking the ability to achieve their ends, as if their misfortune were a purely natural rather than social imposition. An illustrative thought-experiment may help us to see things in a new light.
G.A. Cohen asks us to imagine a society where people are issued with legal “tickets” specifying their liberties, i.e. what actions they may perform. Armed officials intervene to thwart attempts to do something not licensed by one’s tickets. Cohen continues:
But a sum of money is nothing but a highly generalized form of such a ticket. A sum of money is a licence to perform a disjunction of conjunctions of actions – actions like, for example, visiting one’s sister in Bristol, or taking home, and wearing, the sweater on the counter at Selfridge’s.
A poor person has the capacity to approach and board the train to Bristol. But security guards would intervene to physically prevent this, were she to attempt it. Thus, “as far as her freedom is concerned, this is equivalent to ‘trip to Bristol’ not being written on someone’s ticket in the imagined non-monetary economy.” This illustrates how poverty is a socially imposed unfreedom, and property a socially constructed "right". The poor do not suffer any natural lack or inability. Rather, our institutions are such that poor people will be physically prevented from performing actions that would otherwise be open to them. There's nothing in the object's nature which confers ownership to some other individual. Its status as "property" is conferred on it by us.
That's not to say that "anything goes", or that any system of legal rights instituted by a society would be equally legitimate. Any system which allowed the rulers to arbitrarily seize all a worker's holdings and leave them to starve would be plainly immoral. The system must be set up in a fair and equitable manner. But we needn't assume that this means absolute property rights over all of one's holdings. Indeed, I previously argued that taking mild redistributive measures, say via a basic income guarantee, are the only way to ensure that one's post-tax holdings will be rightly inviolable.
Extremist propertarians like Timothy Sandefur are led to the absurd conclusion that "taxation is theft" because they fail to recognize the social character of property rights. As I explain in the linked post:
On this more holistic view, you cannot see pre-tax income as your "natural" or "deserved" earnings. 'Pre-tax' is a misnomer: tax is not an imposition on some prior economic system, it is a fundamental part of the system. A sales tax is simply part of the price of what you buy. Income tax is just a factor that determines your earnings. "Ownership" is not a natural relation between you and an object, but a social relation between fellow citizens: it is an agreement to refrain from interfering with the socially-recognized (i.e. "post-tax") holdings of each other.
Any limitations built into the institution of property rights are confused by propertarians with subsequent (post-institutional) violations of those rights. Sandefur writes, "there is no moral distinction between a robbery committed by one robber, and one committed by a large group of robbers" -- as if the state were breaking laws rather than creating them! It is theft to take that to which another is entitled. But entitlement derives from institutional rules, and our institutions are so set up that individuals are entitled to (only) their post-tax holdings. We may dispute the merits of alternative institutional systems. But that will take some argument, rather than closing down debate by presupposing a groundless pre-institutional conception of "natural" property rights.
A few other quick points in response to Sandefur's post:
1) He claims that to tax someone is "exactly like forcing him to labor for you". That's transparently foolish, of course, the guy knew about the tax rate when he signed his employment contract. He could have chosen to stay at home and abstain from any labour at all if he so wanted. Perhaps he would have starved. This could lead one to the more reasonable claim that the proletariat are forced to work for a taxed wage, in the sense that they have no reasonable alternatives. But note here that the 'work' is every bit as forced as the 'tax'. And I assume Sandefur would deny that the proletariat are forced to labour for capitalists, even though they would otherwise starve. So I challenge him to meet the charge of inconsistency I once levelled against one of his co-bloggers. The full argument can be found here.
2) Sandefur writes: "The citizen is being forcibly deprived of the earnings he got in exchange for his work — that is, an important part of himself."
Is what an employer gives you in exchange for your work really an important part of yourself? More plausibly it is the labour which is central to the self here. So what should really concern us is not taxed wages, but the fact that workers are effectively forced to prostitute their labour to begin with. (This clearly ties in with the above point.)
3) Sandefur claims that a citizen's "wealth... represents his liberty." I certainly agree, as should be clear from my above use of Cohen's 'ticket' thought experiment. But then I'm puzzled by why Sandefur is so unconcerned by the huge disparities in liberty afforded to different citizens. And given the diminishing marginal utility of money, we could expect some moderate redistribution to yield a net increase in vital human liberties. It would seem perverse to hold that one's liberty to obtain caviar is more important than another's liberty to obtain basic sustenance, for example. (Note that a basic income guarantee would likely have especially beneficial consequences for substantive human freedom.)
4) Sandefur asks how we can justify state involvement in economic but not religious matters. The answer is simple enough on indirect utilitarian grounds: freedom of thought and religion is crucial for human flourishing. Freedom from taxation isn't. Quite the opposite, in fact: we need some degree of redistribution in order to ensure that every person can meet their basic needs. (The freedom to eat takes priority!) So the analogy is entirely superficial.
Update: Timothy Sandefur pretends to respond, though it isn't clear that he read any further than the term "social construction" before reeling out his stock anti-positivist rant. Since I'm not a positivist, I'm not too sure of the relevance to my post. I quite plainly wrote that "That's not to say that "anything goes", or that any system of legal rights instituted by a society would be equally legitimate." But it would seem too much to ask of some people that they actually read (and, ideally, comprehend) what one writes before insulting it -- as "idiotic and deserving of the bitterest ridicule", no less! How embarrassing this must be for his (far more reasonable) co-bloggers...
Posts
I've been thinking about libertarianism for a while, ever since some commenters and I had an exchange on my blog, and I've come up with an idea.
ReplyDeleteLet's suppose that all current governmental systems were abolished and we started over again with a libertarian system in which people could purchase property and enact whatever rules they wanted for those who used it. Let us further suppose that most property owners who controlled large tracts of land where others wanted to live would, quite understandably, set a fee in exchange for the right to dwell there. And let's further suppose that, since living and working on someone else's land would entail you making a continual profit, the property owner sets that fee as a percentage of what you produce, rather than a fixed amount. And finally, let's suppose that the property owner chooses to use those proceeds to offer services to others who might move to his land, such as health care or military defense, as incentive for them to live there and increase his own profit. All natural developments, and all according to a libertarian conception of property, meaning that there's no theft involved at any stage for even the most hard-core libertarian to object to.
So, my question is this: How does that world meaningfully differ from the one we actually live in? It seems to me that, by following the libertarian worldview all the way through, we end up with a situation pretty much exactly the same as what exists now, complete with taxation. If anything, our current situation is better, because it allows us more control - more freedom - over the laws of our land of residence, via the democratic process. A private country ruled dictatorially by a single individual offers no such freedom. It seems to me that a consistent libertarian should actually prefer the current state of affairs.
Extremist propertarians like Timothy Sandefur are led to the absurd conclusion that "taxation is theft" because they fail to recognize the social character of property rights.... Sandefur writes, "there is no moral distinction between a robbery committed by one robber, and one committed by a large group of robbers"...
I respect Timothy Sandefur, but really, this contention of his is just ridiculous. A gang of thieves offers you no input into how much money they take from you, nor do they give you the opportunity to walk away rather than pay. A democratic society offers both of those things. If a libertarian would rather not pay taxes, they are free to leave their current country and take up residence elsewhere. Perhaps everywhere else charges taxes too, but in my experience libertarians have always held the position that a forced choice is no less genuine for being forced (as you touched upon, Richard, with the 'work or starve' option).
Wow, the tone of this discussion has become a bit harsh. I don't like your use of the word "foolish," but Sandefur's use of "childish," and his mocking tone throughout, are too much.
ReplyDeleteI wonder why Sandefur doesn't recognize the obvious extension of his own argument. He writes:
And those rights and regulations can be changed, within the broader boundaries of natural rights. Civil rights, such as the right to a trial by jury, are not natural rights, but are created as mechanisms for protecting our natural rights (in that case, the natural right to liberty—the right not to be falsely imprisoned). So, too, rules governing how you can leave your property to your heirs can be changed, so long as they do not go so far as to deprive people of the things that they have earned.
It seems like a heck of a leap to go from what seems like a fairly good starting point, that we have a right to "own" ourselvs (though the language in which that is phrased is pretty loaded, with the use of the word "own" ), but how does that get extended to property external to yourself? He uses the word "earn" to make that extension, but what constitutes "earning" can't be anything but a social construct, as what it takes to earn something is socially determined (by markets, by law, etc.). Why can't property rights be seen as civil rights that protect the natural right of self-"ownership?" If that is the case, then we can rightly criticize any government action that so limits property rights that, in doing so, it limits self-ownership. Certain levels of redistribution would never do that, and would, in fact, further protect self-"ownership."
Wow, I got that out without once lobbing an insult. And it wasn't even that difficult.
let me just say that, while I didn't like "foolish," I thought the tone of your post was very civil overall, and in stark contrast to Sandefur's.
ReplyDelete"Unnatural"
ReplyDeleteI hate that word.
Yes I dont like unnatural or prostitute (or similar loaded but information poor terms).
ReplyDeleteAs to the topic -I agree but if everyone agrees we don’t have critical debate sooo..
1) its a mighty poor person who cant afford a train ticket (i.e. fundamentally cannot get enough money no matter what they are willing to sacrifice)
A capitalist might say your definition of freedom is not a good one because in a sense you are not free to take a train if you are to lazy to get out of bed BUT in theory I am in control variables I could (in theory) allow me to take a train.
There is thus a debate over what is free and what isn’t and exactly where to draw the line.
Similarly imagine if pricing of train tickets was "perfect" so that every seat was always occupied (no wasted resources!). At this point money denies the individual person access but it is just capacity that denies the group that cannot go access. In that sense you could argue that if capitalism is the efficient way then not having it is a denial of substantive freedom as well as individual freedom..
Of course one would still expect some sort of minimal support for a UBI or a inheritance tax (followed by redistribution) to at least ensure theoretical capability to do most things on these grounds.
> On this more holistic view, you cannot see pre-tax income as your "natural" or "deserved" earnings.
To an extent I think this utilizes a tool that I would term the "force of nature" strategy. If you declare something a force of nature it ceases to be considered for moral judgment (classic examples of this are supporters of Israelis and Palestinians seeing their side as a force of nature and the other side as the side needing teaching) in this case the implication is that it is tax that is a force of nature. But doing that prevents you from having an intelligent discussion about how tax SHOULD behave presumably the people in question would want to say that legitimate tax tends towards zero. (although this may well be a fall back position) So the approach defines the answer you will get.
Not to say that it is legitimate to assume right to ownership either!
[This is Jason Kuznicki posting. I think Blogger comments, which are terribly annoying, may have eaten my previous comment.]
ReplyDeleteFirst, I must say I'm disappointed in both of you. I don't care who started it, but there was no need whatsoever for this discussion to have taken the nasty turn that it has. Carnival of Citizens, indeed.
Now, it seems to me that how one evaluates a system of economic distribution depends on two things: First, on one's abstract principles of justice, and second, on how well one thinks that the given system will live up to those principles.
Richard, you seem to be proceeding from a Rawlsian account of justice, in which society should strive to produce a setup wherein there will be the fewest possible ex ante unpleasant positions for hypothetical members of that society to occupy. (Do correct me if I'm wrong on this.)
Personally, I do not favor the Rawlsian account, as I tend to think that some degree of economic equality is both necessary and just. I think that striving to create a society where everyone will have roughly the same wealth sweeps under the rug the very real fact of human irresponsibility and shiftlessness, traits which do not deserve to be rewarded when they appear.
But, proceeding from what I take to be your starting point, I have to ask you the following:
First, have you considered that private property may actually accomplish something quite like what you are looking for? It may well be the system that does provide the most relative wealth for all -- even while leaving some room for inequalities that are, to my mind, legitimate ones.
Second, have you considered closely the process by which economic restrictions are enacted in a regime of "limited" private property? They aren't made by impartial sages sitting on mountaintops. They are made through the ordinary political process, and as a result, they tend to produce outcomes that favor the rich, the well-connected, and big businesses -- at the expense of the poor, the unconnected, and the entrepreneurs. This is the exact opposite of the outcome that you claim to desire. And it is, I think, pretty much unavoidable, because money will always buy influence.
Consider the public housing projects of the mid-20th century. Who championed these behemoths? Architects, construction firms, land brokers, urban planners. Why? Because they made a pile of money on them. The poor, meanwhile, were displaced into structures that are now generally considered unlivable (just think of the suburbs of Paris, for crying out loud). Often, they were forced into these dwellings because their previous housing was either destroyed, made unaffordable through zoning restriction, or made unobtainable through rent control. The poor lost bigtime here, and the rich laughed all the way to the bank.
I could go on, and add many more examples, from trade barriers that hurt farmers in the developing world all the way to drug laws that punish the urban poor while looking away from the "good" neighborhoods, where the rich and the lawmakers live.
So... In conclusion, while the "train to Bristol" example is a neat thought experiment, it much more often works in reverse: The government tends very strongly to make it harder, not easier, for the poor to better themselves. This represents a decrease in liberty, both in the most classical sense and in the sense that the poor will have far fewer "permission slips" to go around.
I concur with Chris: I think Richard has been far more civil on this end of the debate so far. He may have been a little harsh on Sandefur, but come on, at least he's not lobbing ad hominems at every turn.
ReplyDeleteI have a few comments for you here, Jason:
"This is the exact opposite of the outcome that you claim to desire. And it is, I think, pretty much unavoidable, because money will always buy influence."
It is hardly unavoidable. By definition, there will always be more poor than rich; and votes, not money, is the final arbiter in a democratic society. If the rich have prospered at the expense of the poor so far, it is only because the poor have been insufficiently well-organized or motivated, and that situation is by no means inevitable.
"So... In conclusion, while the "train to Bristol" example is a neat thought experiment, it much more often works in reverse: The government tends very strongly to make it harder, not easier, for the poor to better themselves. This represents a decrease in liberty, both in the most classical sense and in the sense that the poor will have far fewer "permission slips" to go around."
Come on. Do you really think that having less government control will result in a better situation for the poor? If anything, it will only remove what few protections they already have. As you'll be aware, we already tried this social experiment, in the period before there were things like labor laws and minimum-wage laws. Did the enactment of those things make the poor better off or worse?
[Jason again.]
ReplyDeleteCome on. Do you really think that having less government control will result in a better situation for the poor? If anything, it will only remove what few protections they already have. As you'll be aware, we already tried this social experiment, in the period before there were things like labor laws and minimum-wage laws. Did the enactment of those things make the poor better off or worse?
They made the poor worse off, and they continue to do so today, especially in the developing world, where the insistence that workers be paid a "fair" wage helps ensure that there are far fewer jobs to go around.
I hesitate to add too many links to a post for fear it will be deleted as spam, but consider this as an example of what I mean:
http://www.mises.org/fullstory.aspx?Id=1707
When socially-conscious consumers reduce their demand for Taco Bell products, they reduce the demand for Taco Bell's inputs, like tomatoes. Lower demand for tomatoes in turn means lower demand for tomato-pickers, which means lower wages for tomato pickers. Reduced demand for tomato-picker labor means fewer tomato-picking jobs at lower wages, which is exactly the opposite of what the Taco Bell boycotters wish to accomplish.
This may create a market for "fair trade" tacos. This is again preferable to state intervention, but it still hurts workers who sell "unfair trade" tomatoes and rewards people who may be wasting resources. Unfair trade tomatoes are good substitutes for fair trade tomatoes, so people who buy "fair trade" tomatoes and other goods are bidding resources into tomato production unnecessarily. Not that there's anything wrong with that—we should do nothing to impede voluntary exchange—but we must recognize that the fair trade tomato picker's gains are coming at the expense of would-be tomato pickers who must pursue other options.
If a person wants to sell his labor, then I think he should be allowed to do so on terms that are mutually agreeable, and not only on the terms set by the state. I think this will benefit both laborers and consumers, and, while I know that my unconventional position allows you to howl with indignation -- (Come on. Do you really think... ) -- I must assure you that yes, I really do think this way.
Lastly, as to democracy not being influenced by money, I am surprised to hear such a thing from someone I take to be a liberal. But I think you should consider the findings of public choice theory a bit more closely (google it if you must), and note that special interests, and especially those who stand to make money from the government, will inevitably lobby harder, contribute more to campaigns, and otherwise help shape economic redistribution policies to their own benefit. This cannot possibly be good for the poor.
The poor often vote against their economic interest; often, in fact, are induced to do so by those in power (see the current Republican administration for examples). But you're right, ebon, too few regulations/programs can be just as bad as too many. The rich can stomp on the poor through the political process, but they can just as well, and easily, do it through the market.
ReplyDelete"When socially-conscious consumers reduce their demand for Taco Bell products, they reduce the demand for Taco Bell's inputs, like tomatoes. Lower demand for tomatoes in turn means lower demand for tomato-pickers, which means lower wages for tomato pickers. Reduced demand for tomato-picker labor means fewer tomato-picking jobs at lower wages, which is exactly the opposite of what the Taco Bell boycotters wish to accomplish."
ReplyDeleteWhat you're essentially saying, Jason, is that these companies have taken their poor employees hostage. Even if the wages that tomato-pickers are paid are not enough for them to ever have any realistic hope of economic advancement - even if the wages they're paid aren't enough for even the basic necessities of life - we should keep funding the companies that pay those wages via our purchases, because otherwise those people will lose their jobs altogether, and being paid even a pittance is better than nothing. Am I understanding your position correctly?
Well, I don't negotiate with hostage-takers. If we follow your reasoning and continue to buy non-fair-trade tacos, maybe that will save the jobs of the underpaid tomato pickers for now, but in the long run it is consigning them to endless wage slavery. It is better to boycott those companies, because although it may harm their workers in the short run it has far better consequences in the long term, not just for those workers but for all the ones who come after them. (And, incidentally, I reject the false dilemma that we must choose between demanding that companies pay their workers a living wage and creating suitable employment for all who seek it.)
And for what it's worth, this passage, from the link you provided, makes an argument that is just ridiculous:
"If people are interested solely in Taco Bell tomato-picker welfare, they shouldn't boycott the restaurant. They should stop eating at other restaurants and eat only at Taco Bell. For that matter, they should stop cooking and eat every meal at Taco Bell. This will increase the demand for tomato-pickers and, therefore, will increase tomato-picker wages and tomato-picking opportunities."
There is a huge flaw in this logic. In this scenario Taco Bell might hire more workers to expand its production capacity, but for what reason do the writers think that they would increase the wages of individual farm laborers? If anything, this will drive wages down, because in the absence of protective regulation we end up with a race-to-the-bottom effect, as I describe below.
"If a person wants to sell his labor, then I think he should be allowed to do so on terms that are mutually agreeable..."
Do you really believe that jobs that do not pay a living wage are "mutually agreeable"? The reason people work at these jobs is not because they want to make less money - it is because they have far less negotiating power than the wealthy and have no real alternative.
In the absence of minimum wage laws, what we end up with is a race to the bottom - a Prisoner's Dilemma situation where people who are willing to work for less can undercut the ones who aren't. Without any regulation to level the playing field, the employer can freely fire any employee to replace them with another who's willing to work for just a few less cents per hour, and then fire that person for someone who'll work for even less, and so on. At each step down, the newest hire stands to benefit personally by undercutting their predecessor and obtaining employment, even though doing so hurts not just them but everyone else as well in the long run. Prisoner's Dilemma logic in such circumstances really is unbeatable: you're always better off defecting at each step, though overall it makes you far worse off. And if we follow this downward spiral to its logical conclusion (and why shouldn't we?), what we end up with is the complete collapse of the market, as wages in all sectors decline to near-zero. On the other hand, a guaranteed basic level of wages will enable everyone to buy back into the system, reinvesting the fruits of their productivity in society, and result in greater economic prosperity for everyone in the long run.
It is better to boycott those companies, because although it may harm their workers in the short run it has far better consequences in the long term, not just for those workers but for all the ones who come after them.
ReplyDeleteI am torn about sentiments like these. On the one hand, I do think working for the greater good of everyone is an upstanding goal. My first instinct is usually to support such boycotts and "pro-social action."
However, I am not sure that anyone is actually qualified to make such a decision. Maybe it doesn't always happen, but often this sort of thinking would lead to a "The Ones Who Walked Away from Omelas" sort of situation, or even a belief that the Vanguard must slaughter all opposition in the best interests of the proletariat.
Of course, I speak hyperbolically, but the situations are analagous. It just seems like you're damned if you do and damned if you don't. Either way the poor are going to get the raw end of the deal. I wish, but despair, of ever finding a middle path which can respect individual autonomy while at the same time protecting the weak from strong.
[Jason again.]
ReplyDeleteWhat you're essentially saying, Jason, is that these companies have taken their poor employees hostage.
No, I'm saying that the companies and the employees have come to an agreement that they find relatively beneficial, particularly given the dire circumstances that the employees were in before their agreement, the lack of job skills that they brought to the agreement, and the clear demand that we all have for tomatoes. Considering that these people are entirely unskilled, I find it wonderful -- yes, wonderful -- that ours is one of the few economic systems where they can do as well as they do.
we should keep funding the companies that pay those wages via our purchases, because otherwise those people will lose their jobs altogether, and being paid even a pittance is better than nothing. Am I understanding your position correctly?
What would you rather have -- a pittance, or nothing?
No, really, I'm curious. If these were your ONLY two choices, then what would you rather have? I sure know what I'd take. A pittance IS better than nothing.
There is a huge flaw in this logic. In this scenario Taco Bell might hire more workers to expand its production capacity, but for what reason do the writers think that they would increase the wages of individual farm laborers?
Simple economics. Some small number of people can be induced to pick tomatoes for very cheap wages, but that pool is limited. If Taco Bell wants to hire more labor, it will soon find that it must raise wages to attract more people into to picking tomatoes. This isn't a flaw in the logic at all -- this is just the way elementary economics works, and if you find it strange that increasing demand for labor will raise wages, then I strongly suggest that you take some remedial economics classes.
Do you really believe that jobs that do not pay a living wage are "mutually agreeable"? The reason people work at these jobs is not because they want to make less money - it is because they have far less negotiating power than the wealthy and have no real alternative.
"Less" money? Excuse me, but the assumption under which we were just laboring was that these people had two choices -- a pittance or nothing. "More" isn't a choice here, as you've already admitted.
If the government (and not high tomato demand) forces employers to offer "more," then even tomato picking will cease to be a career option for these people (ie, the workers will get nothing). By claiming to champion "more," you will end by giving them "nothing," and we will be faced with another example of the do-gooder programs that end up hurting the poor, of the very type I've been complaining about.
In the absence of minimum wage laws, what we end up with is a race to the bottom - a Prisoner's Dilemma situation where people who are willing to work for less can undercut the ones who aren't.
Not so. Remember, there are buyers in the labor market, too, and these buyers must compete with one another to attract workers. How will they do this? By raising wages. A rough equilibrium is very soon reached in these situations.
Let's suppose that your assumption were true, and that *whenever* someone came along offering to work for less, the employer always took him up on the offer. (Meanwhile, there is apparently no competition whatsoever among employers for any sort of labor.)
If this were the case, then *everyone* would be paid *exactly* the minimum wage. And if the minimum wage were repealed, everyone would do an infinite amount of work for free, perhaps hoping that some spare change would fall out of the employer's pocket at the end of the day.
Fortunately, this scenario -- and your race to the bottom -- both rest on the massively faulty assumption that employees will never leave a job to take one with a higher wage, and that employers will never voluntarily offer higher wages to attract employers away from their competitors. Both are entirely false.
Competition among employers causes wages to rise, and the sheer fact that employers voluntarily pay more than the minimum for even slightly skilled labor is the proof.
Without any regulation to level the playing field, the employer can freely fire any employee to replace them with another who's willing to work for just a few less cents per hour, and then fire that person for someone who'll work for even less, and so on.
This, too, is false: Employers incur very real costs when they change employees frequently. In general, turnover is unwanted and uneconomical for them. It's far more profitable to cultivate a workforce that knows one another, enjoys some stability, and therefore has higher morale and productivity.
That someone who understands economics so poorly would presume to make such sweeping arguments about the nature, existence, and effects of property just astonishes me. To judge the institution of private property, one must first know what it is. And to know what it is, it's necessary to understand how it works. Regrettably, I must say I have seen little evidence of such knowledge in the above post. I've instead seen the kind of economic ignorance and hubris -- yes, hubris -- that has impoverished so many, all in the name of saving them from poverty.
"What would you rather have -- a pittance, or nothing?
ReplyDeleteNo, really, I'm curious. If these were your ONLY two choices, then what would you rather have? I sure know what I'd take. A pittance IS better than nothing."
You prove my point for me! You just openly stated your allegiance to the exact Prisoner's Dilemma logic I outlined above: in an unregulated market, a race to the bottom inevitably ensues as unemployed people undercut the ones who are already employed by being willing to work for less and less. Of course I would work for a pittance, if the alternative was to starve, as any rational person would. My entire argument is that this logic, which dominates in the individual case, nevertheless results in steadily worsening overall conditions for all workers, the same way as repeated cycles of defection in the Prisoner's Dilemma result in steadily worsening outcomes for all participants even though each one can prove that they are following the mathematically optimal individual strategy. The only way to break this cycle is for government to step in and guarantee a minimum living wage for every worker, so that repeated undercutting becomes impossible and the steady decline of wages stops.
"This, too, is false: Employers incur very real costs when they change employees frequently. In general, turnover is unwanted and uneconomical for them. It's far more profitable to cultivate a workforce that knows one another, enjoys some stability, and therefore has higher morale and productivity."
That is only true of jobs that require extensive training, and as you yourself stated, the fruit-picking market and other kinds of menial labor are not such jobs. What on earth is the cost incurred by a large corporate farm to fire one migrant worker and replace them with someone cheaper? Do you seriously think a tomato picker is not replaceable with the snap of a foreman's fingers?
"Some small number of people can be induced to pick tomatoes for very cheap wages, but that pool is limited. If Taco Bell wants to hire more labor, it will soon find that it must raise wages to attract more people into to picking tomatoes."
That would only be true if we reached a point where there were fewer workers than jobs, in which case companies would have to compete to find people willing to work for them. But that is a false description of the current situation; there is a vast pool of unskilled labor among Third World countries, unlimited in size for all practical purposes.
Let's see how your argument fares against reality. Wal-Mart, to name one example, is the biggest corporation in the world. How much has it been forced to raise wages and improve working conditions by the steadily increasing demand for its products?
http://www.ufcw.org/press_room/fact_sheets_and_backgrounder/walmart/sweat_shops.cfm
"USA Today, August 14, 2001, reported that, 'Wal-Mart has more than 1,107 international operations.' The newspaper also reports that, 'Bangladesh workers earn as little as nine cents an hour making shirts for Wal-Mart.'"
"Clothing sewn in China is usually done by young women, 17 to 25 year old (at 25 they are fired as 'too old') forced to work seven days a week, often past midnight for 12 to 28 cents an hour, with no benefits. Or that the women are housed in crowded, dirty dormitories, 15 to a room, and fed a thin rice gruel. The workers are kept under 24-hour-a-day surveillance and can be fired for even discussing factory conditions. The factories in China operate under a veil of secrecy, behind locked metal gates, with no factory names posted and no visitors allowed."
Your rosy logic does not appear to be borne out by real-world evidence. (I believe this is the sort of situation you called "wonderful"?) But by your argument, we should all continue to buy from Wal-Mart as much as possible, out of the hope that maybe someday they'll become so large that they'll just have to pay their workers more. Well, good luck with that. I intend to shop at companies that respect human rights. (See more stories about Wal-Mart sweatshops here.)
Jason (to address your original comment),
ReplyDeleteI'm more utilitarian than egalitarian. But close enough. I think we should set up our institutions in whatever way would best promote human flourishing. And yes, I do think property rights have an important role to play here. But I think they need to accommodate an unconditional basic income. (Tip to Ebonmuse: this is a better way to boost workers' bargaining power than heavy-handed wage and labour regulations. P.S. I liked your first comment -- I've sometimes wondered how libertarians would object to state action if they thought of the social contract as just another private contract.)
Note that the "train to Bristol" example doesn't purport to establish any practical conclusions, such as that government should intervene more to help the poor. The point is purely conceptual, establishing that property is a social institution (and that the unfreedoms arising from its "lack" are a social imposition). My point was that recognizing this conceptual truth can "open our eyes to the possibility of various different systems of property rights", which we may then argue about how to choose between. The point is to open debate on this topic, not conclude it.
Ebonmuse:
ReplyDeleteYou prove my point for me! You just openly stated your allegiance to the exact Prisoner's Dilemma logic I outlined above...
Entirely mistaken. I have only proven that unskilled labor earns a pittance, which should surprise no one. What *is* surprising is that it earns anything at all, even without minimum wages. For this, we have the free market to thank.
Now please, drop your allegiance to the prisoner's dilemma. It's a great metaphor for many forms of social choice, but not for market economics. I have already explained why it doesn't apply here; free competition for workers ensures that an equilibrium will be reached long before workers end up in slavery.
Consider this: Labor is a commodity just like bread. It is subject to the laws of supply and demand, exactly as bread is.
Now, apply your "race to the bottom" argument to bread. Is it really true that bread will one day be completely free -- simply because it's always in the interest of the bakeries to undersell the competition? How come we don't have free bread? And free everything, for that matter? This "race to the bottom" stuff is just economically ignorant; it entirely ignores half of all economics, for the sake of shoring up some preconceived notions. Please, you're making yourself look very silly.
What on earth is the cost incurred by a large corporate farm to fire one migrant worker and replace them with someone cheaper? Do you seriously think a tomato picker is not replaceable with the snap of a foreman's fingers?
Yes, I do think that there are costs. I will grant that the costs are obviously lower, but then, the overall cost of the labor is lower, too, so there may well be a proportionality to it all. (Meanwhile, if the ratio of wage-to-training expense is altered by raising the wage, the training expenses become relatively negligible -- giving another reason why minimum wages hurt the lowest waged workers: In these systems, it really *is* a good idea to dismiss them more quickly.)
there is a vast pool of unskilled labor among Third World countries, unlimited in size for all practical purposes.
Indeed there is. Yet these people are for the most part also eager to better themselves. And it is in their employers' best interests that they do so. Workers with better job skills are more productive and therefore more profitable.
Lastly, it is amazing to me -- literally jaw-dropping -- that you offer China as an example of the problems with the untrammeled free market. China is still a command economy, with economic and social regulations that are vastly more awful than the ones we have here. By citing China as a place with dreadful conditions for the poor, you have proven my point. In a country with truly free labor, with a free press and the ability to engage in free collective bargaining, public shaming, stockholder lobbying, and worker strikes would all go a long way toward preventing the abuses you mention. In China, however, they can't, because these rights do not exist.
The race to the bottom relates not so much to the situation within a single country and more to government related effects
ReplyDeleteFor example - the lack of mobility of labor where in you can't just pop over to Luxembourg to make money and then pop back to china to spend it. This means that in a free market it will tend to be a better strategy to favor capital over labour.
So there is always an incentive to tax just a little less or provide a little more subsidy to capital.
If the world was a single country the government might easily tax capital MORE with the idea that they did not want to provide a disincentive for labour.
Anyway in theory money will accumulate in the hands of the rich based on this and a number of other factors (it being easier to make money with money and economies of scale, and smart people - genetics and so forth).
But I guess this might not concern some- which I guess centers around whether the system falls over when all the money comes into the hands of a very small set.
> If the government (and not high tomato demand) forces employers to offer "more," then even tomato picking will cease to be a career option for these people.
The people must be eating something if it isn’t tomatoes it must be something else - they can pick that.
If you raise the demand for fair trade tomatoes you lower the demand for non fair trade tomatoes but you also displace production of some other fruit picking and generally inflate the prices of fruit pickers as a whole except for the non free trade tomato pickers. In theory (in the long run) you could make the unskilled job of tomato picking a relatively high paid job. Maybe some people want to do that - If you converted low demand skills into higher demand skills you could reduce income equality.
One could argue that it is a worthwhile goal to make certain rare skills less highly valued (e.g. being a talk show host) and certain common skills more highly valued (such as growing food or being a nurse).
> being paid even a pittance is better than nothing
One of the problems here is related to the point above - humans in general do not weight future events "correctly" they will in general forgo education or health care or otherwise morgage their future for present gains.
I also think strategically for a country (or many communities) it is a bad strategy to be very good at picking tomatoes. What happens is that you create systems and convert land and create tax structures and education systems that make you better and better inch by inch at picking tomatoes - eventually you are an awesome tomato picking country but your country by its nature is an inflexible farm.
Sucessful countries like Singapore recognised this and actually made and effort to BREAK from certain industries such as farming in order to be able to pursue manufacturing then It then Services and Biotech etc.
Jason writes: "what troubles me about both instances — the modest income tax and the prohibition on luna-cheesiosity — is the principle of the thing. Once a government has established that it may take away one belief, it has also established that it may take away any belief. All it needs to do (even among rational people like ourselves) is to establish that this belief is not so necessary as all that."
ReplyDeleteNo, it also needs to establish that the intervention is most likely to do good. (And since we have general reason to be wary of government interventions, and concerned about precedents and slippery slopes, we may demand fairly high standards of evidence here.) I have trouble thinking of a realistic scenario where there is a compelling 'public interest' reason to send out the thought-police. But as philosophers we can easily imagine outrageous scenarios where this would be so, and where indeed this would plausibly be the right thing to do. (Surely you wouldn't stand by your "principle" if that would lead to the torture and death of every living being. Absolutism is plainly insane when you consider such cases.)
In general, recall that I'm an indirect utilitarian. I don't think that government agents should be allowed to do whatever they think would maximize utility. As you note, that would likely lead to terrible results in real life. Principles have an important utilitarian role to play here, as you rightly note. But we need to decide what principles, or institutional rules, to establish in the first place. And here I think we do need to (carefully!) appeal to a utilitarian foundation. I assume most reasonable people could agree that a general ban on thought-police will likely have the best consequences. The economic case is less clear. We can argue about that, but as you know I think a market + UBI is the way to go. (Besides, the slippery slope here may well be less dangerous than your precarious pinnacle.)
Anyway, even if we disagree on some empirical details, it sounds as though you share my normative foundation (i.e. indirect utilitarianism rather than magical/natural rights).
"Now, apply your "race to the bottom" argument to bread. Is it really true that bread will one day be completely free -- simply because it's always in the interest of the bakeries to undersell the competition? How come we don't have free bread?"
ReplyDeleteThe raw materials and resources required to produce bread have a degree of inelasticity, in that they cannot be obtained for arbitrarily low prices. Making bread requires growing the wheat, fertilizing and watering the fields, harvesting the crop, milling the wheat to make flour, purchasing fuel for the oven to bake the flour, and so on. No matter what the baker would like to charge, these steps require a certain minimum amount of labor, resources and capital, and he cannot sell his bread for less than that if he wants to make money. The costs incurred at each step are passed on to the next step, and those costs would remain even if the human beings involved in the process were paid nothing at all.
On the other hand, unskilled labor can be obtained for arbitrarily low prices, because the companies hiring these people paid none of the costs incurred to bring them into being. If every baker just had a truckload of bread show up on his front door every day, for free, then yes, there would be a race to the bottom in the price of bread.
"Indeed there is. Yet these people are for the most part also eager to better themselves. And it is in their employers' best interests that they do so. Workers with better job skills are more productive and therefore more profitable."
This rose-colored view, again, finds no support in the facts. As I have pointed out, and as I have cited examples to prove, it is actually in a sweatshop's best interest that its workers remain poor, unskilled (beyond the very minimal set of skills required to do their job) and ignorant - because that dissuades them from doing the organizing that might otherwise result in them recognizing the inequity of their situation, gaining bargaining power and demanding better wages. As you'll see in my previous citation, Wal-Mart factories in China are known to fire all employees who reach the age of 25 or who discuss on-the-job working conditions. By your logic this should be counterproductive, because they are throwing away their most experienced workers. By my logic, it makes perfect sense.
"Lastly, it is amazing to me -- literally jaw-dropping -- that you offer China as an example of the problems with the untrammeled free market. China is still a command economy, with economic and social regulations that are vastly more awful than the ones we have here."
I did not offer China as an example; I offered Wal-Mart as an example. Wal-Mart does business in many industrialized, capitalist nations, and as I said, it is the largest company in the world. If your claim is correct that buying more from a company will cause it to treat its workers better, we would have to see that effect occur in Wal-Mart if it was occurring anywhere. But it has not occurred, which was my point. Wal-Mart is still racing to the bottom, paying its workers a pittance and moving most of its operations to countries where it can get away with doing that. (No one forced them to set up factories in China.) Unless you are saying that a company must be even bigger than Wal-Mart before improved working conditions kick in, I suggest that you admit your argument was mistaken and withdraw it.
[Jason, once more.]
ReplyDeleteEbonmuse, you are still mistaken about labor being essentially a free input. It is not, and I'm tired of repeating the obvious.
As to people in the developing world working to better themselves, have you taken a look at the numbers of people pursuing higher education in, say India, China, and Mexico? They are astonishing.
As to China, I will only repeat that Wal-Mart's business practices -- as they practiced in China -- would generally be illegal and/or impractical in a society that did not feature so much state intervention into the economy. Here, the special favors that the government extends to foreign investment -- that is, the state's corporate welfare -- permits Wal-Mart to restrict the liberties of its employees in ways that are obviously improper and that would never be permitted under a truly laissez-faire system.
And yes, I continue to talk about China, not Wal-Mart, because if Wal-Mart did not take advantage of the unfair situations in China, some other corporation would. This is why it is important to watch governments as closely as I do.
I reject your suggestion that I withdraw my argument. China is the source of the problem, because it forbids free association, restricts the right to travel, curtails press freedoms, outlaws collective bargaining, ignores legitimate complaints about worker abuse, and does not enact the safety standards that even I think are incumbent to all decent governments. The minimum wage? A distraction, compared to all of that.
I hope we don't entirely ignore the fact that China is adressing it's issues in regard to raising wages and gaining power much faster than (almost?) any country in the world.
ReplyDelete"Here, the special favors that the government extends to foreign investment -- that is, the state's corporate welfare -- permits Wal-Mart to restrict the liberties of its employees in ways that are obviously improper and that would never be permitted under a truly laissez-faire system."
ReplyDeleteThat sounds like blatant self-contradiction to me. A laissez-faire system, by definition, does not interfere in how a company treats its employees.
"China is the source of the problem, because it forbids free association, restricts the right to travel, curtails press freedoms, outlaws collective bargaining, ignores legitimate complaints about worker abuse, and does not enact the safety standards that even I think are incumbent to all decent governments. The minimum wage? A distraction, compared to all of that."
The problem with this is that Wal-Mart sweatshops do not exist only in authoritarian China, but also in democracies such as Bangladesh and Honduras (source). Again, why has the enormous demand for Wal-Mart products not compelled it to treat its employees better? Your reasoning simply does not work in the real world.
[You-know-who.]
ReplyDeleteThat sounds like blatant self-contradiction to me. A laissez-faire system, by definition, does not interfere in how a company treats its employees.
A laissez-faire system would not allow companies or individuals to violate the rights of others. This is not a contradiction at all. Real laissez-faire is antithetical to the corporate welfare state, too.
As to Bangladesh and Honduras, while these countries are indeed democracies, the rights protections they have for their citizens are quite poor, and in each case, the state has a lousy history of economic intervention that has shown its effects today. I don't think they are relevant counterexamples either.
Again, why has the enormous demand for Wal-Mart products not compelled it to treat its employees better?
Because, at the end of the day, this is still mostly unskilled labor. Even if every country allowed workers their full economic freedoms, there's still only so much that can be done. I'd like everyone to be well-off, too. But do you have any idea what a huge undertaking that is? And how easily it can be undone by bad economic policies?
I suspect you don't, because in your mind, the state can do no wrong, and corporations can do no right.
Okay, I think we're going around in circles now, so this is my last post in this thread.
ReplyDelete"A laissez-faire system would not allow companies or individuals to violate the rights of others."
Good! And in my mind, paying a person a lesser salary than they can feasibly live on, or forbidding them to organize into a union on pain of being fired, is a violation of their rights. There are some things that liberty of contract should not include, such as the "right" to sell yourself into slavery, the "right" to work for a wage that's not enough to buy even the basic necessities of life, or the "right" to be fired if you even mention unionizing with your fellow employees. The reason we prevent people from making agreements that include such provisions is not because we want to restrict their liberty, but because we want to increase it, by preventing the poor and needy from being coerced by large corporations against which they have no practical bargaining power. We increase their liberty by using the state's regulatory power to supply them with the leverage they would otherwise lack.
"As to Bangladesh and Honduras, while these countries are indeed democracies, the rights protections they have for their citizens are quite poor, and in each case, the state has a lousy history of economic intervention that has shown its effects today."
If you're saying that this effect you mentioned, of increased demand driving improvement in working conditions, will never occur as long as corporations can move their manufacturing efforts to countries with weak, corrupt or authoritarian governments, then you're essentially saying that this effect will never occur any time in the foreseeable future. And I can agree with that. That is why I have consistently advocating making those improvements mandatory for doing business in developed countries, so we can use them as leverage against companies that would otherwise not respect human rights.
"Because, at the end of the day, this is still mostly unskilled labor. Even if every country allowed workers their full economic freedoms, there's still only so much that can be done."
True. On the other hand, Wal-Mart can certainly do a lot more than it is presently doing; it is the largest and most profitable company in the world, after all. A company that cleared $7 billion in net profit last year can afford to pay its workers more than 20 cents per hour, or allow them to take lunch breaks during the working day.
"I'd like everyone to be well-off, too. But do you have any idea what a huge undertaking that is?"
Yes. However, I do not believe that its difficulty is a reason to shrink from attempting it.
"I suspect you don't, because in your mind, the state can do no wrong, and corporations can do no right."
I would appreciate it if you didn't invent positions and attribute them to me. If I need to establish the obvious, there are many socially responsible corporations that treat workers fairly; my point throughout this thread has been that many others do not, and real people are suffering because of that. Treating workers fairly and ethically should be a requirement, not an optional or magnanimous act on the employer's part.
Everything is natural (disregarding the supernatural). If it stems from nature, it is natural. Humans stem from nature. Ideas and words stem from humans. Property rights may fall in the above category. Thus, property rights are natural. :-)
ReplyDeleteA nice exchange!
ReplyDelete