"No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable."
Adam Smith, from Wealth of Nations
Steve S at G+ keenly observes:
This is precisely the opposite of the libertarian creed. Libertarianism is all about being as rich as possible while those around you starve, and then using some of that wealth to pay off a few desperate people to protect the rest of it by beating up everyone else. The prevalence of "guard labor" is an indicator of how far we've gone down the libertarian path to hell.
Oddly enough, if you dig through the mists of economics' foundations, you find this statement. It sounds suspiciously Marxist:
"A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more, otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation."
That is: A living wage is nothing more than an employer paying the full cost of provision. Allowing an employer to pay less than a living wage is precisely the same as giving him license to pay less than cost for other raw materials or capital. It's not a sustainable condition.
The fact that McDonalds is profitable while paying a less-than-living wage means that the welfare payments to and debts incurred by its workforce are a direct subsidy to the company and its owners.
The author continues:
"The demand for those who live by wages, therefore, necessarily increases with the increase of the revenue and stock of every country, and cannot possibly increase without it. The increase of revenue and stock is the increase of national wealth. The demand for those who live by wages, therefore, naturally increases with the increase of national wealth, and cannot possibly increase without it.
"It is not the actual greatness of national wealth, but its continual increase, which occasions a rise in the wages of labour. It is not, accordingly, in the richest countries, but in the most thriving, or in those which are growing rich the fastest, that the wages of labour are highest....
"[I]t would be otherwise in a country where the funds destined for the maintenance of labour were sensibly decaying. Every year the demand for servants and labourers would, in all the different classes of employments, be less than it had been the year before. Many who had been bred in the superior classes, not being able to find employment in their own business, would be glad to seek it in the lowest...
"The liberal reward of labour, therefore, as it is the necessary effect, so it is the natural symptom of increasing national wealth. The scanty maintenance of the labouring poor, on the other hand, is the natural symptom that things are at a stand, and their starving condition, that they are going fast backwards."
And finally concludes:
"Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage, or as an inconveniency, to the society? The answer seems at first abundantly plain. Servants, labourers, and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part, can never be regarded as any inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged."
Who is this socialist?
Some guy named Adam Smith. Wrote a book called An Inquiry into the Nature and Causes of the Wealth of Nations.
You should read it some time, it's free online: Wikisource: The Wealth of Nations.
#economics #libertarianism #adamsmith