Austrians, Swiss, and Italians, in accordance with the amount of taxes paid by each citizen, have funded the Austrian, Swiss, and Italian public property. Hence, they must be considered its legitimate owners. Foreigners have not been subject to domestic taxation and expropriation; hence, they cannot be assumed to have any rights regarding Austrian, Swiss or Italian public property.

Exactly my point about his error. Democracy is not equivalent to anarchism. Publicly owned property is based on involuntary taxation and expropriation–there are no legitimate owners of public property. Thus, the AC view of private property cannot legitimately and morally be grafted onto the present situation involving public property, as Hoppe has tried to do.

Wow! The number of comments surely demonstrates how minimum wage and Walmart are touchy issues for a lot of folks.

First, Walmart is simply playing the game that the state has devised. This game existed before Walmart, and was not created by it.

Second, Walmart does not force anyone to buy the products it offers. I have yet to see it bringing people in at gunpoint and forcing them to buy. The argument that Walmart has destroyed its competitors, thereby leaving its customers no choices, and thus forcing them to be Walmart customers is simply silly, and making such a silly argument should be beneath anyone with an IQ above 85. A simple drive through any town with a Walmart will reveal multiple competitors to Walmart at all levels of merchandise.

Third, the minimum wage does not keep the average wage from falling to “about 1.75/hr”. If this were true, then the average wage, today, would be the minimum wage. End of argument.

Fourth, I don’t think Walmart is promoting the miniumum wage in order to damage its competitors, (even if it might have that effect, which I don’t think has been proven), but are doing it to try to keep the unions at bay. My guess is that they are playing a dangerous game which may ultimately lead to their demise.

Fifth, the system sucks, but you change it one piece at a time. It is self-defeating to try to use the state regulation to fix the problems of the state regulations. This is the game the statists want you to play.

Sixth, Bob A, I did some back of the envelope calculations on your sock example. I didn’t know that Americans buy, on average, about a thousand pair of socks each year.

In the end, Scarlett wins because she has violence on her side and because she does not mind using it (through government of course). Austrians can argue whatever they want about economics and prove her wrong, she and her government friends will jail those who do not abide by regulations and do not pay taxes. As a rule, if one needs violence to achieve something, one is probably wrong. If one is strongly principled against violence except when it supports one’s ideals, one is not so far from any dictator in history.
Scarlett, read “human actions”, it is free and remember that nobody was hurt to bring that to you and the state was not even involved!

A true entrepreneur will use whatever means available to increase profits, including using the advantages available via the gov’t. An entrepreneur who understands the long-run life of the business (or has not been infected with the modern Keynesian education) will not sacrifice long-term prosperity for such short-term advantages. Wal-Mart, unfortunatly but like all of its competitors, is merely taking advantage of the existence of a meddling gov’t.

This is one reason the Mises Institute is so important.

Yancey Ward,

“The argument that Walmart has destroyed its competitors, thereby leaving its customers no choices, and thus forcing them to be Walmart customers is simply silly, and making such a silly argument should be beneath anyone with an IQ above 85. A simple drive through any town with a Walmart will reveal multiple competitors to Walmart at all levels of merchandise.”

This is very wrong. I have an IQ quite a bit higher than 85 and so do you, I feel confident in assuming. Had you driven through many of the towns I’ve driven through, and have lived in, BEFORE the Wal-Marts were there, you’d know how wrong you are. The worst case scenarios have been, in Washington State anyway, in smaller towns on State Highways. There are numerous examples of Wal-Mart Superstores wiping out a dozen or so businesses in a single town. The choices these people had are definitely gone.

I don’t blame government for this type of scenario entirely. I still believe that many businesses could have networked together and with creative thinking developed ways to beat Wal-Mart in many cases. Maybe this is happening in various places and maybe this is what you’re seeing; I certainly hope so. I’ve always believed, and have experienced it but in manufacturing, that small businesses can be much more competitive than large businesses quite often. After all, how much is overhead at a Wal-Mart superstore for example?

However, until genuine free markets are established the Wal-Marts of the world are going to have all the advantageous legislation that big bucks can buy.

Michael A. Clem,

“You favor certain rules and regulations to force people and businesses to do what you think is right . . .”

Again, nope, never said it. I think you and I are having a problem getting on the same page. My writing may not be clear because there are too many words, but it can’t be THAT unclear.

Bob’s description of how Jane gets paid is a great example of how the minimum wage law advocated by Wal-mart could be used as a cartelizing device against smaller companies that use innovative methods of remuneration of employees.

Jane accepts the prospect of sometimes making only $6.25 per hour now in exchange for the prospect of making over $25 per hour as she improves.

Contrast that with an established firm that does business a different way, paying perhaps within narrower margins between $12 to $15 per hour. If the success of Bob’s wife’s business depended on their present flexible pay approach, a legal minimum wage of $11.90 per hour could be devastating to it, whereas for the established firm, it would be no hardship at all.

Bob A,

You change it one piece at a time by standing on principle. If you allow yourself to intellectually accept, or you acquiesce to, for example, a higher minimum wage because you think the system is rigged against less productive workers, you are accomplishing nothing. The system will simply spiral deeper into socialism. You are using the tools of the enemy and becoming as corrupt.

I have been to a lot places with WalMarts, and I have yet to find a place that has only a WalMart. I didn’t say that they hadn’t put other, much smaller, vendors out of business, just that they haven’t put them all out of business by a long shot.

Sure, WalMart could raise their prices and pay their employees more. Any employer could do this, and, lets be honest, if you are going to suggest this for WalMart, then why not suggest it for all employers? Indeed, your suggestion means that it is WalMart’s customers that will pay the increased wages, so we should alleviate their pain by raising their wages as well, don’t you think?

In case a simple apology isn’t enough, let me just add that I can think of few things more libertarian in perspective than suggesting and advocating creative and diverse thinking in dealing with the results of government intervention. I think we could all use some practical ideas and tips on coping.

Yancey Ward,

“You change it one piece at a time by standing on principle.”

I understand this concept; “it’s the principle of the thing.” But I have trouble applying the principles selectively i.e. thumping on the issue of minimum wage and praising in back-handed fashion one or the worst abusers of government largesse. Several people have pointed out that all corporations do it, so what’s so bad about Wal-Mart doing it. WELL, IT’S THE PRINCIPLE OF THE THING! I suppose I need to get over it.

“. . . just that they haven’t put them all out of business by a long shot.”

I agree, and I admit that I have seen a recent success story. In a small (population around 5,000) town in Washington State, Wal-Mart built a superstore on a well-traveled north/south State highway. Two businesses quit within a few months, but then a few months later the oldest hardware store in the area (in business since the ‘40s) and the JCPenney store that had been there “forever” built new facilities on either side of the Wal-Mart. My sister-in-law knows people working at all three (she’s lived in the town most of her life) and says that everyone is thriving and the employees apparently make better-than-average wages. Recently, a small dress shop closed but was replaced by an art gallery, and a small hardware store was replaced by a restaurant that serves only organically grown vegetables and meat from naturally fed stock. There is talk of reconstruction of the main street to turn it into a kind of “boulevard” that leads at the end to the Ace Hardware/Wal-Mart/JCPenney complex. Now that’s creative thinking. The populace can only speculate about how it all happened as the details have not been divulged, but it does seem to have worked out well—except for the businesses that ended up quitting.

“Sure, WalMart could raise their prices and pay their employees more. Any employer could do this, and, lets be honest, if you are going to suggest this for WalMart, then why not suggest it for all employers?”

I only used Wal-Mart as an example because of the issue of minimum wage. I was trying to show how insignificant it is to Wal-Mart and to demonstrate that it was obviously planned for in advance as merely a PR move at the beginning of the Christmas shopping season. By the way, on a slightly different tangent, I believe that any small business that has difficulty paying its employees $5.15/hour is not very creative.

I believe that small business will always be able to pay higher wages than big business for a variety of reasons. When small businesses finally begin to network together for economies of scale, then Wal-Mart will get a run for its money. Of course, it would be much easier in a “landscape” that David White described in which the rail system was the major mover of merchandise. You’re good with numbers so I’m sure you can see how 5 businesses shipping via commercial truck at less-than-truckload (LTL) rates are paying much higher costs than say a Wal-Mart who fills the entire truck and gets the full-truckload rate with a single destination. If businesses network through a single company with one destination and then handle the distribution at the destination end separately, they can ship at the same rates as the big boys. I apologize to the poster/s for not searching the thread for their names who discussed using public highways to advantage big business and this is an example of that scenario. But again, it is at least as much the fault of uncreative small business as it is Wal-Mart and its ilk.

“. . . so we should alleviate their pain by raising their wages as well, don’t you think?”

My only response to that ludicrous question is this sentence.

Michael A. Clem,

“In reading Hans-Hermann Hoppe’s article, Natural Order, The State, and The Immigration Problem . . .”

I agree with your assessment. I think Hoppe’s commentary and recommendations are brilliant. I’ve seen some negative comments in this thread and I find it difficult to believe that anyone could consider him “irrelevant.” Again, though, what can we do now? At the rate of immigration now, within a few years I’m convinced, along with millions of other people probably, that we’re going to see major problems the government hasn’t bothered to consider. So, once again, until Hoppe’s solutions can become reality, how should immigration be dealt with?

Can the rate be slowed without government interference NOW? It will take the citizenry in general becoming familiar with the theory and accepting of it, and it will take Senators and Representatives at all government levels to do the same. In other words, it all boils down to education as usual; reasonable people can only solve problems if they have enough information. Before discovering Libertarianism, my inclination would have been to join with others demanding State laws to stop immigration until solutions could have been worked out. Using government is bad, but isn’t it all there is for now?

Cannot a strategy be developed that made as its first priority to articulate the solution of privatization to the public through various media and then as primary tactic to ask States to halt or at least slow to a trickle immigration for X period of time? The privatization solution is the best I’ve ever heard, but it will indeed be foreign to some (a large number in the Left will equate it with neoconism at first), and there will be mega-corporations using government cronyism to influence outcomes in their favor.

It seems to me that to gain back the powers usurped by the Federal government we have to begin requiring elected officials to include comprehensive plans in EVERY LEGISLATIVE PROPOSAL that stipulate how and when the States will begin accepting responsibility and then do the same with the States to give back responsibility to individuals. We can’t live with big government, but we can’t kill it (outright). So I’m in favor of David White’s recommendation that we be “so anti-state that we must work for its eradication the same way an oncologist works for the eradication of a cancer . . . “

Paul Edwards,

I’ve been checking out the US Dept. of Labor site to learn more about the minimum wage issue. My wife’s business is unaffected because her sales are less than $500,000. However, I wanted to find out how the gov’t handles piece work in conjunction with the minimum wage and it turns out there is a calculation formula.

If my wife’s business grew to the point at which the law applied, she could someday get a worker whose work ethic was sub-par. The advantage of piece work is that we do not pay for work not done, but a sub-par worker could perform so slowly that production would be below minimum wage when the formula was applied. So, the worker could get minimum wage BY LAW by producing less than what the wage was worth by contract! Conversely, an employer could price items so low that no matter how proficient the worker became, the minimum wage could never be reached and then BY LAW the worker would get the minimum. The law protects the worker from the employer, but the law does NOT protect the employer from the worker in the case of piece work.

In the case of piece work, the minimum wage could be more damaging to the employer. Hourly wages are paid irrespective of actual production and the employer applies subjective evaluation of the employee. But in piece work, the employee earns the contract price only when production is met. The minimum wage could negate the advantages of paying only for what is produced. Not so good.

Actually Hoppe addresses the problem of immigration in a democracy as well, in his book “Democracy: The God That Failed”. I’m going to include a brief passage below, from the end of Chapter 7 (On Free Immigration and Forced Integration). It may have appeared before in one of his essays, but if so I was unable to find it.

“What should one advocate as the relatively correct immigration policy, however, as long as the democratic central state is still in place and successfully arrogates the power to determine a uniform national immigration policy? The best one may hope for, even if it goes against the “nature” of a democracy and thus is not very likely to happen, is that the democratic rulers act as if they were the personal owners of the country and as if they had to decide who to include and who to exclude from their own personal property (into their very own houses). This means following a policy of the strictest discrimination in favor of the human qualities of skill, character, and cultural compatibility.
More specifically, it means distinguishing strictly between “citizens” (naturalized immigrants) and “resident aliens” and excluding the latter from all welfare entitlements. It means requiring, for resident alien status as well as for citizenship, the personal sponsorship by a resident citizen and his assumption of liability for all property damage caused by the immigrant. It implies requiring an existing employment contract with a resident citizen; moreover, for both categories but especially that of citizen, it implies that all immigrants must demonstrate through tests not only English language proficiency, but all-around superior (above-average) intellectual performance and character structure as well as a compatible system of values – with the preictable result of a systematic pro-European immigration bias.”

This will be particularly hard to swallow for many left-leaning libertarians. Even though I disagree with a few of Hoppe’s comments in his book, on the whole I tend to agree with him on this issue.
Even if the US became an anarcho-capitalistic society, “free” immigration would probably not be what many left-libertarians have in mind. It may well be possible, say, for an Indian business analyst to find a job in New York and move there, but he may find himself excluded from some venues, particularly if he travels far away from New York City. He may even find that whole towns won’t let him in at all. They may have big signs outside saying, for instance ‘No Muslims, Asians, Blacks, Jews or Homosexuals allowed’. He won’t have a “right” to go there any more than I now have a “right” to use a women’s gym.

David White:

I have to disagree with the direction you’re headed with the following two statements.

“…when one considers the fact that cheap labor, whether due to illegal immigration or outsourcing is, respectively, holding wages down or costing jobs outright, it is clear that as each increases, the middle class — the backbone of our society — looses.”

and

“What to do? … prohibitive tariffs placed on all imports to create a free-trade autarchy.”

This discussion has been had on mises.org before. You’re name is not one i had been associating with protectionism, let alone extreme protectionism. Am i misreading you? Whatever the level of state intervention, it is never in anyone’s interest to advocate more of it in any form, including the form of trade barriers which would further hinder free trade.

There is never a condition of state oppression bad enough to warrant the calling for more of it.

Also I have to point out that the phrase “a truly free country of 300 million people” in the context of your argument is a dramatic contradiction. There is no such thing as a truly free country where its citizens are obstructed by the state from trading freely with people outside of its borders. Consistency, my friend, consistency. One cannot justify using means to an end when the two are fundamentally contrary in principle to each other. Furthermore, it is an illusion that one can achieve that end in this way.

David wrote: …we can’t dispense with the [government] we’ve got overnight… It is an illusion, in other words, to think that principle has a life of its own…

Hoppe says all immigrants must demonstrate through tests not only English language proficiency, but all-around superior (above-average) intellectual performance and character structure as well as a compatible system of values – with the predictable result of a systematic pro-European immigration bias.

When you abandon principle, you get raw sewage.

I actually disagree with Hoppe on cutting welfare for resident aliens (if they pay taxes, they should be entitled to it like everyone else), and with his requirement that the State test prospective immigrants for character or intelligence (I also don’t like his use of a very dubious study which purports to show that the level of intellectual performance of Hispanics is significantly less than the US average). I think the selection process should be left as much as possible to the markets, with governments only checking that every immigrant is sponsored by a prospective employer, who also agrees to be held responsible for any damage to property caused by the immigrant. Employers will obviously pass this risk on to insurers, and it may well be that the resulting system will be biased in favour of some ethnicities and against others.

Wolf DeVoon,

I was speaking only about illegal immigration and had nothing to say about legal immigration or how it should be handled. I fully agree with Hoppe, however, and, moreover, would balance immigration with emigration. We don’t need any more people, and adding to our numbers the way we are only exacerbates the problem we already have with an increasingly dumbed-down, docile, and dependent public.

Hi David:

We will probably not come to an agreement today, or soon, but before i accept that outcome, i will put away, temporarily, my impractical libertarian principles and arguments against tariffs and protectionism, and point out that there are simple and sound economic arguments against them.

It has been shown here in the literature on mises.org that there is no way, regardless of the level of the given state intervention we, or others suffer from today, that a further restriction of free trade via further state intervention can do anything but further worsen the well-being of the domestic consumer. This argument is defended rigorously in the literature on mises.org.

Economic truths are not dependent on a certain set of particular political circumstances. They are true under all circumstances regardless of how much the government presently hampers the market. Trade barriers, under no circumstances can improve the overall condition of people either domestically, or abroad. And this is true even if one trading partner is poor and oppressed, and the other is wealthy and free.

I am always interested in reading a thorough argument refuting Mises, or Rothbard so if you’ve got one on this topic fire away, but so far, it seems to me to be proven that here is simply no valid economic argument that favours protectionism.

Paul,

As I said, my idea was really just a thought experiment, since it’s obviously not going to happen. However, given that Lew himself acknowledged that a country of 300 million people, under conditions as free as statist society would allow (i.e., the night-watchman state), would be an economic powerhouse the likes of which the world has never seen, one has to wonder what Mises and Rothbard would have had to say about the idea.

After all, is what is being called free trade really free trade? That is, are people really trading freely when they are doing so with government fiat currencies that distort the market out of all proportion and when state action elsewhere has created labor imbalances so acute that prevailing wages in one country can be a tenth or a twentieth of those in another country? Are people in a “wealthy” nation literally consumed by debt engaging in free trade when the money they’re borrowing (the the tune of $2 billion a day) comes from the very people they’re buying from and whose money is also a government fiat currency?

I say that under these circumstances, “free trade” is just another fraud perpetrated by the state to further plunder the people, the money that greases its wheels having nothing to do with the free market other to make a mockery of it.

Thus can I stand on principle and say that since “free trade” is really forced trade, creating a sealed-off night-watchman state in which 300 million people are otherwise left alone would be a damn site better than continuing to be pawns in a global fraud that dooms them to destruction. For to give Goethe’s famous dictum a slight twist: “None are more hopelessly enslaved than those who falsely believe they are engaging in free trade.”

Keep up the great works! Libertarianism is the best of all ideologies. GENUINE free trade is the answer to economic problems. Big governments everywhere will corrupt it if permitted to do so. Immigration will be a major problem in the US. The neocons have to be VOTED out of office if any progress is going to be made. Older lefties and younger lefties are easy; Libertarians in waiting who just need a push. I’ll do my small part.

GET THE MESSAGE OUT INTO THE MAINSTREAM IN A HURRY!

Fare all thee well,
Bob A.

Walmart CEO warming to the State? I don’t think so! Scott was simply pandering to the economically ignorant and the left-wing spin machine. To imply that there was some devious motive to gain a competitive edge by supporting an increase in the miniimum wage is nonsense. The criticisms of Walmart are politically based, not rationally principled. They are not about the destruction of Main Street, discrimination against women or competitive advantage. The criticisms are really about campaign contributions and union dues. Walmart has been a large contibutor to the Republican party and therefore a political target. So it is really about extortion. Give me your money or I will destroy you! I liken being a libertarian to spitting into the wind. You are right – for all the wrong reasons. Remember, this is all about politics, not principle.

“Wal-Mart pays between $8.23 and $9.68 as its national average.” Fine; but, “That means that the minimum wage could be raised 50% and still not impose higher costs on the company”? I doubt that. Surely, even if Walmart isn’t paying any of its employees merely the minimum wage, it is employing thousands of people at a wage lesser than their proposed new minimum. I agree with the conclusions of the piece. Walmart is pushing for a higher minimum wage, in order “to impose higher costs on smaller competitors.” But, rather than doing this without higher costs, Walmart has decided it will be worth their while to absord the higher wages given to stockboys and smiley-face sticker-passerouters as the increased wage minimums work their magic and drive yet more small businesses into bankruptcy; whereupon Walmart can then absord more customers (and maybe a stockboy or two).

I am 11 and doing a report on wal-mart’s economics in school and this artical helped me alot

what is min. wage?????