Tag Archives: free markets

The Eugenics Plot of the Minimum Wage

In his “Letter from Birmingham Jail,” Martin Luther King Jr. identifies the government as the enemy of the rights and dignity of blacks. He was locked up for marching without a permit. King cites the injustices of the police and courts in particular. And he inspired a movement to raise public consciousness against state brutality, especially as it involved fire hoses, billy clubs, and jail cells.

Less obvious, however, had been the role of a more covert means of subjugation — forms of state coercion deeply embedded in the law and history of the United States. And they were offered as policies grounded in science and the scientific management of society.

Consider the minimum wage. How much does racism have to do with it? Far more than most people realize. A careful look at its history shows that the minimum wage was originally conceived as part of a eugenics strategy — an attempt to engineer a master race through public policy designed to cleanse the citizenry of undesirables. To that end, the state would have to bring about the isolation, sterilization, and extermination of nonprivileged populations.

The eugenics movement, as an application of the principle of the “planned society,” was deeply hostile to free markets.The eugenics movement — almost universally supported by the scholarly and popular press in the first decades of the 20th century — came about as a reaction to the dramatic demographic changes of the latter part of the 19th century. Incomes rose and lifetimes had expanded like never before in history. Such gains applied to all races and classes. Infant mortality collapsed. All of this was due to a massive expansion of markets, technology, and trade, and it changed the world. It meant a dramatic expansion of population among all groups. The great unwashed masses were living longer and reproducing faster.

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Henry Hazlitt Responds to 10 Common Objections to Capitalism


A correspondent who describes himself as “a 26-year old college graduate who strongly supports a system of free enterprise,” recently wrote me to say that he is “continuously confronted with questions that are most difficult to answer.” He appended a list of 10 of them, and asked for my comments.

I offer my answer here. To save space, I have not repeated his questions, assuming they can be clearly guessed from my replies.

Dear Mr._____________________ :

The number of faults that have been alleged against capitalism are without limit. Few of the allegations have any merit, and when they do the reason will usually be found to lie deep in the weaknesses of human nature itself. Practically all the criticisms tacitly assume that the imputed faults could be easily cured by some form of socialism or communism, or some ad hoc government intervention that would, in fact, usually make the complained-about condition much worse.

With these preliminary remarks, let me try to give brief answers to your ten questions.

1. Capitalism does depend upon the consumption of natural resources, and some of these could eventually be depleted. But this must happen under any conceivable system of production when the population becomes large enough in comparison with the resources. But capitalism has proved resourceful in finding substitutes or for providing for renewal of resources (as in scientific forestry, for example).

2. There will probably always be some efforts toward collusion and private price-fixing. Encouraging private competition is probably the best cure for this, plus appropriate laws against clearly harmful collusion.

3. Not only do utilities often give lower rates to those who use more power; nearly all sellers give lower rates to bigger consumers because they can be supplied with the commodity at a lower cost. If big automobile companies consume more steel than a small hardware manufacturer, this does not necessarily mean that big companies are using steel more wastefully.

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