kfl%mx.lcs.mit.edu@MC.LCS.MIT.EDU.UUCP (07/31/86)
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Date: Thu, 24 Jul 86 22:54:32 EDT
From: "Keith F. Lynch" <KFL%MX.LCS.MIT.EDU@MC.LCS.MIT.EDU>
Subject: Free market
To: asp@ATHENA.MIT.EDU
From: Jim Aspnes <asp@ATHENA.MIT.EDU>
1. Consider a typical resident of a 19th-century mining town. He
does not make enough money to feed his family, so must go into
debt to support them. This debt becomes payable immediately when
he quits his job as a miner ... Any attempt he makes to escape
his condition would necessarily infringe upon the rights of his
employer, and the situation he is in was entered voluntarily when
he was hired, fresh off of Ellis Island. ... I would claim that
the miner was effectively enslaved.
This is why there are bankrupcy laws. Also, the resident wasn't
COMPELLED to go into debt. There are plenty of alternatives.
2. ... a ... corporation ... purchases from the local landowners
90% of the arable land in a small country ... The remaining ...
tenant farmers ... now must feed themselves on ... 10% of the land
which remains under their control.
They are free to find work elsewhere.
This is the classic dilemma of the tenant. A tenant of an apartment
can be kicked out at any time (when his lease expires). An owner of
an apartment or house cannot. A tenant farmer can be told to pack up
and leave at any time (when his lease expires). An owner of a farm
cannot. This is one of the main reasons why renting is much cheaper
than buying. You are buying not just the use of a thing, but its
perpetual control.
This is unfortunate for the renters. But they are always free to go
elsewhere and make arrangements with others.
The fortunate 20% who are employed by the fruit growers cannot
leave their employment,
Why not?
and cannot ask for more than a minimal living wage, since the
fruit company could quickly replace any employee who did so with
one of the unemployed.
You could equally well argue that employers cannot ask people to
work for less than an exorbitant wage because any employer who did so
would lose employees to a company which payed the top rate. The
situation IS symmetrical.
Oh yes, you assumed that there was only the one fruit company. You
never explained how that could be. Unless the country has laws
prohibiting competition. In which case we aren't talking about the
free market anymore.
You never explained why the landowners would have thought it was a
bright idea to sell their land in the first place. I would think most
of them would prefer to remain owners of their land rather than
workers on it for whatever low wage (in your view) the company chooses
to pay.
Or is the value of each parcel of land enough that by selling it,
its owner could retire? If so, I would imagine that many would have
sold their land already, unless they were determined to pass the land
on to their children, in which case they wouldn't sell to the fruit
company either.
Do you know of any actual cases like this? (No fair naming
countries with special laws favoring just one fruit company. Your
criticism is of the free market, not of random banana republics.)
There may be ideological reasons for avoiding agricultural price
supports, government-managed banking systems, and the like; but
most of them are not sufficient to justify another Dust Bowl or
another Depression.
It was government interference with the free market that caused the
dust bowl (with a little help from the weather) and the depression.
...Keith
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