J_A_B: Milko, a question-- JAB, first, please be assured that I mean no disrespect. You seem to be ignorant in this subject - economy and history - and thus come to it from a completely wrong perspective. That is perfectly fine and can be remedied by reading books found in any decent bookstore. I advise you to do so rather than rely on the boards. I'd advise to start with Hayek "The Fatal Conceit" and then read his supporters and opponents - Mises, Friedman, Adam Smith, Keynes(ians). I am afraid I cannot do justice to this topic, not being an economist and historian. So please take the following as just the roughest indication for future study.
In a pure free-market economy, how do you prevent corporations from abusing their workers? Corporations compere for labor same as they compete for any other resource. As capital-intensity of the production increases, every unit of labor and material produces more value - marginal utility of a labor unit increases. It makes sense to pay more for either and still be profitable.
Saying that all labor would be minimum wage is the same as saying all raw materials would be zero cost (plus shipping and handling
). The latter is patently absurd. It is not a good will of coirporations or desire to show off in front of socialist countries that causes increase in
real wages of workers but the objective principles of the nature.
A company hires a worker if his marginal utility exceeds/equals the marginal cost. The utility cannot be afected by legislature - so any attempt to set a limit on minimum wage would exclude some workers from labor pool, reduce production and increase price of the product to the customers. Since the worker accepts the however abysmal wage voluntarily as the best choice he has, by denying him that choice you cause him into even worse conditions.
In 1800 (when this nation was very nearly a free market as the federal and state governments were quite weak), 14-hour workdays/6 days a week were the norm, 12 was the standard age to start a job (even younger was not uncommon), and job security was non-existant. You are being anachronistic - judging the times according to 2002 standards and morals. The workers in 1800 were coming from the rural area where they had even worse conditions - not enough food to live and procreate - which explains why the population was not growing once all the available land was settled, even longer working day/week, work outside in cold/rain, etc, no job safety, no job security, no guarantee of selling the created product, etc.
The capitalist used/risked his savings to provide a worker with a steady job sheltered from the elements in a heated building, often with some living space, not having to worry about many things a peasant does, etc. It was a voluntary choice for the better, not worse for a worker. The times were tough and there was constant supply of desperate hungry people from the countryside willing to take minimum job that would provide sustenance. Socialists often forget that the workers were really human beings capable of deciding, not mindless cattle.
The choice was for that 12-yar old to work or have him stay home and see his younger siblings die and probably himself.
It's a lie that government regulations and or unions and rather than natural accumulation of capital, technical progress and decrease in fertility caused increase in real wages and shorter work day.
Job safety was thought of as unnecessary (if a guy gets hurt just fire him) It started on the same principles and norms that existed in farming in command-style societies for millenia without change - and then improved, along with society's standards of acceptable. It's credit to capitalism, not blame that the order of millenia was changed to the better. It just couldn't happen overnight.
and the environment (air/water quality/sanitation) in industrial cities tended to be worse than it is now. It was new stuff and people did not have enough experience with new methods and technology - which is a self-correcting problem. Also, pollution can be dealt with much better on a free-market principles that socialist ones. If your pollution affects someone's private property/body, you are in violation, period. Lax environmental regulations are failure to protect private property rather than otherwise.
While a market-driven economy is good from a purely economic standpoint (in other words looks good on paper), from a social standpoint it has a LOT of problems because corporations are not concerned with their workers, but with profitability. That's the beauty of a system. It works to common good through competition and everyone pursuing private gain. There is a quite complex theoretical proof for that but compatition is essential and only known mechanism for the optimal allocation fo resources.
So at the very least you need some sort of regulation just to make sure that the free market STAYS free--yet such regulation is itself a perversion of a purely free market. It's a catch-22. Not really. Any regulation that restricts competition - including labor competition - perverses free market. Any regulation that increases or does not affect the competition is compatible with a free market.
Regards,
miko
