[extropy-chat] Re: Minimum wages laws

[Technotranscendence]

On Sunday, November 20, 2005 11:36 PM The Avantguardian
avantguardian2020 at yahoo.com wrote:
> Can somebody show me how this argument
> is flawed? Is sweat-shop labor not cheaper
> for the businesses that employ it than slaves
> were for slave owners? Is not a slave that gets
> fed, clothed, and housed not better off than an
> employee who can't afford these things on
> the wgaes he is paid?

Well, you're assuming that only the worst jobs are available and that
the laborer has not other alternatives -- even in the future.
Obviously, the average worker would have to somehow earn above
subsistence -- else she or he won't be alive long enough to benefit the
employer in the long run.  This doesn't mean government has to enforce
it, just that people will find a way to make enough to live on or get
support to otherwise live, such as through friends, family, and charity.
But the whole of society must make enough to get by or else everyone
would die out in short order.  Since population is actually growing, it
must be the case that wealth is at least increasing.

The slave, on the other hand, has little choice in bettering her or
himself.  In ancient societies, slavery was typically the outcome of
being defeated in battle, so perhaps it was better than being dead.
(Yet value is subjective and some people obviously preferred death over
slavery -- or why fight on or try to escape once enslaved?*)  The total
cost of slavery involves the cost of enforcing slavery.  In slave owning
societies, the cost of enforcing slavery was quite high, but the
slaveholders managed to get the government to carry out the
enforcement -- thus passing along part of the cost to tax payers in
general rather than just slaveholders.  Had the full costs of slavery
been experienced by slaveholders -- say, in the South before 1861 -- 
it's likely the institution would've died out all the sooner.  (Why?  A
slave holder in Georgia would have a hard time paying to have detectives
track down and capture his or her runaway slave in another state,
especially if no one else were forced to help in this.  In reality, with
things like the Fugitive Slave Law, the slave holder was able to pass
along these costs to the US federal government -- in other words, to all
US tax payers and not just those who held slaves and not even just those
in the South.)

As for what free laborers will be paid versus what slaves will get (in
terms of food, lodging, and care), this will depend on the market, no?
If the demand for labor is high and the supply is low, the laborer will
be paid more, all other things being equal.  Likewise, if the demand for
slaves -- in a slave society, obviously -- is high and the supply is
low, then the slave will cost more and slave owners are likely to take
better care of their slaves.  However, if the supply of slaves is high,
all other things being equal, then the incentives line up in the other
direction -- for not treating slaves better.  Anyhow, other than that, I
don't think you can make any claims from your armchair about what a
slave will get.

But if you're going to look at historical cases, then, e.g., freed
blacks often did quite well in the South after emancipation, as detailed
by Mark Thornton in his "The Economics of the Civil War" at:

http://www.mises.org/media.aspx?action=category&ID=71

The same is also true of the more peaceful emancipations made throughout
the world during the 19th century.  (In fact, IIRC, the US was the
bloodiest, but that's because the 1861-5 war wasn't just about slavery.)
Yes, there was an initial period of adjustment, but economic conditions
generally improved in the long run -- and were it not for government
interference to make things "better" probably would have improved more
dramatically.  Why would this be?  Well, people were free to improve
their lives and reap the full benefits of such improvements, however
meager.  (Any improvement in a slave's lot can be taken away at any
moment.  For instance, if the slave invents a method to get more wheat
or cotton from a field, all other things being equal, he has no reason
to carry out this method since she or he will likely not experience any
betterment from it.  The master, in fact, might not decrease the amount
of work, so the slave would have no benefit, and assuming the disutility
of labor (a general fact; if labor weren't experienced as a disutility,
it wouldn't be labor) there is little or no incentive to make any
changes.  Hence the incentive to experiment and work harder or better is
extremely low among slaves.  This problem extends to all of society,
since there are that many less people experimenting and working
harder/better in slave societies.  In essence, this is no different than
taxation.  If you are taxed more, then you have less incentive to be
more productive.  Since a slave, unlike a free man or women, has almost
no control over where any increase in productivity goes, she or he has
almost no incentive to improve her or his lot via improvements in
productivity.)

Regards,

Dan
http://uweb1.superlink.net/~neptune/

*  Obviously, it matters.  Some people will fight to the death not to be
enslaved.  Others will not.  It's strange to see people in developed
countries arguing that slavery is better than sweatshops.  They seem to
be making the claim on how little people value freedom.  In actual fact,
we see people valuing freedom quite high.  People don't get on tires to
leave Cuba because they disvalue it.  The same is true of the former
Soviet empire.  People lived perhaps not as good as in the West, yet
they risked their lives to flee to freedom.  Why was that?  I don't
think it was because of minimum wage laws.  :)