Episode 100!

Episode 100!

Well, I made it all the way to episode 100! If you’ve been listening, thanks so much. If you haven’t, might as well start now.

I start out the show with greetings and feedback from listeners. Yes, there are people out there actually listening to this, and I appreciate it very much.

Then we take a trip back to Camelot, as Mark Twain’s character did in “A Connecticut Yankee in King Arthur’s Court”. In that book, there is a short chapter about … economics. No, really. And it’s trying to teach a lesson that, over a hundred years later, we’re still having to relearn.

Mentioned links:

Hornet Archives (MOD/Tracker music)

A Connecticut Yankee in King Arthur’s Court, chapter 33 [Project Gutenburg]

10 Nations With the Highest Minimum Wage…and What They Pay For It

This is how the minimum wage is actually hurting workers

Wal-Mart Pay Raise Tops Minimum Wage For Half-Million Employees

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Show transcript

When my kids were younger, I read many books out loud to them. I was hoping to instill in them a love for reading, as well as demonstrating to them how watching the movie that was based on a book was not at all like reading the book. We started with shorter stories, like The Secret Garden, and we eventually worked our way up to The Lord of the Rings, and 20,000 Leagues Under the Sea. One thing about reading out loud is that you need to come up with different voices for the characters, or listeners will get easily confused. I’d use my own voice for the protagonist, since he or she would presumably have the most to say, and thus I wouldn’t be reading so much of the book in a made-up voice. Just a hint if you decide to do it.

One of the books we read was by Mark Twain, A Connecticut Yankee in King Arthur’s Court. In it, the main character, who lived in the year 1879, suddenly finds himself in Camelot in the year 528. One might consider it something of science fiction, on par with Jules Verne. But it’s no fluff piece of tachyons and androids. Twain used the past to make commentary on his present; praising the good and criticizing the bad, with Twain’s characteristic humor. I found myself explaining some of the vocabulary and concepts to my kids as I read it, but with the explanations, I think – I hope – that they were able to grasp some of what Twain was saying, such as they could at their ages.

The story gets off into such details that a movie would never do it justice. Some of these details and tangents let us understand how, for example, the lack of education had an effect on the peasantry of the day, and how it was used to manipulate them. There is a particularly relevant passage in chapter 33 that I would like to read today. The chapter is titled, “Sixth Century Political Economy”. See what I mean? Not exactly the name of a chapter you’d expect to find in a Doctor Who or Star Trek novel. “Star Wars episode 7; The Economy of an Empire!” No, not gonna’ happen. Yet Twain, in his entertaining style, manages to make such a discussion both humorous and educational at the same time. In this passage, which I’m abridging slightly, the protagonist is having an economic discussion with a local blacksmith, Dowley, after a nice dinner. Dowley is trying to demonstrate how the economics of the small kingdom he lives in are better than others. I want you to listen to Dowley’s points and see if they remind you of something that you hear even to this day. Mark Twain, though speaking to people of his own time, indeed speaks down the centuries.

[Note: In the podcast episode, I cut out some of this text for time (and redundancy). This is the text of the section of chapter 33 that I took my reading from.]

At a first glance, things appeared to be exceeding prosperous in this little tributary kingdom—whose lord was King Bagdemagus—as compared with the state of things in my own region.  They had the “protection” system in full force here, whereas we were working along down toward free-trade, by easy stages, and were now about half way.  Before long, Dowley and I were doing all the talking, the others hungrily listening.  Dowley warmed to his work, snuffed an advantage in the air, and began to put questions which he considered pretty awkward ones for me, and they did have something of that look:

“In your country, brother, what is the wage of a master bailiff, master hind, carter, shepherd, swineherd?”

“Twenty-five milrays a day; that is to say, a quarter of a cent.”

The smith’s face beamed with joy.  He said:

“With us they are allowed the double of it!  And what may a mechanic get—carpenter, dauber, mason, painter, blacksmith, wheelwright, and the like?”

“On the average, fifty milrays; half a cent a day.”

“Ho-ho!  With us they are allowed a hundred!  With us any good mechanic is allowed a cent a day!  I count out the tailor, but not the others—they are all allowed a cent a day, and in driving times they get more—yes, up to a hundred and ten and even fifteen milrays a day.  I’ve paid a hundred and fifteen myself, within the week.  ‘Rah for protection—to Sheol with free-trade!”

And his face shone upon the company like a sunburst.  But I didn’t scare at all.  I rigged up my pile-driver, and allowed myself fifteen minutes to drive him into the earth—drive him all in—drive him in till not even the curve of his skull should show above ground.  Here is the way I started in on him.  I asked:

“What do you pay a pound for salt?”

“A hundred milrays.”

“We pay forty.  What do you pay for beef and mutton—when you buy it?”  That was a neat hit; it made the color come.

“It varieth somewhat, but not much; one may say seventy-five milrays the pound.”

“We pay thirty-three.  What do you pay for eggs?”

“Fifty milrays the dozen.”

“We pay twenty.  What do you pay for beer?”

“It costeth us eight and one-half milrays the pint.”

“We get it for four; twenty-five bottles for a cent. What do you pay for wheat?”

“At the rate of nine hundred milrays the bushel.”

“We pay four hundred.  What do you pay for a man’s tow-linen suit?”

“Thirteen cents.”

“We pay six.  What do you pay for a stuff gown for the wife of the laborer or the mechanic?”

“We pay eight cents, four mills.”

“Well, observe the difference:  you pay eight cents and four mills, we pay only four cents.”  I prepared now to sock it to him.  I said: “Look here, dear friend, what’s become of your high wages you were bragging so about a few minutes ago? “—and I looked around on the company with placid satisfaction, for I had slipped up on him gradually and tied him hand and foot, you see, without his ever noticing that he was being tied at all.  “What’s become of those noble high wages of yours?—I seem to have knocked the stuffing all out of them, it appears to me.”

But if you will believe me, he merely looked surprised, that is all! he didn’t grasp the situation at all, didn’t know he had walked into a trap, didn’t discover that he was in a trap.  I could have shot him, from sheer vexation.  With cloudy eye and a struggling intellect he fetched this out:

“Marry, I seem not to understand.  It is proved that our wages be double thine; how then may it be that thou’st knocked therefrom the stuffing?—an miscall not the wonderly word, this being the first time under grace and providence of God it hath been granted me to hear it.”

Well, I was stunned; partly with this unlooked-for stupidity on his part, and partly because his fellows so manifestly sided with him and were of his mind—if you might call it mind.  My position was simple enough, plain enough; how could it ever be simplified more?  However, I must try:

“Why, look here, brother Dowley, don’t you see?  Your wages are merely higher than ours in name , not in fact .”

“Hear him!  They are the double—ye have confessed it yourself.”

“Yes-yes, I don’t deny that at all.  But that’s got nothing to do with it; the amount of the wages in mere coins, with meaningless names attached to them to know them by, has got nothing to do with it.  The thing is, how much can you buy with your wages?—that’s the idea.  While it is true that with you a good mechanic is allowed about three dollars and a half a year, and with us only about a dollar and seventy-five—”

“There—ye’re confessing it again, ye’re confessing it again!”

“Confound it, I’ve never denied it, I tell you!  What I say is this.  With us half a dollar buys more than a dollar buys with you—and therefore it stands to reason and the commonest kind of common-sense, that our wages are higher than yours.”

He looked dazed, and said, despairingly:

“Verily, I cannot make it out.  Ye’ve just said ours are the higher, and with the same breath ye take it back.”

“Oh, great Scott, isn’t it possible to get such a simple thing through your head?  Now look here—let me illustrate.  We pay four cents for a woman’s stuff gown, you pay 8.4.0, which is four mills more than double .  What do you allow a laboring woman who works on a farm?”

“Two mills a day.”

“Very good; we allow but half as much; we pay her only a tenth of a cent a day; and—”

“Again ye’re conf—”

“Wait!  Now, you see, the thing is very simple; this time you’ll understand it.  For instance, it takes your woman 42 days to earn her gown, at 2 mills a day—7 weeks’ work; but ours earns hers in forty days—two days short of 7 weeks.  Your woman has a gown, and her whole seven weeks wages are gone; ours has a gown, and two days’ wages left, to buy something else with.  There—now you understand it!”

He looked—well, he merely looked dubious, it’s the most I can say; so did the others.  I waited—to let the thing work.  Dowley spoke at last—and betrayed the fact that he actually hadn’t gotten away from his rooted and grounded superstitions yet.  He said, with a trifle of hesitancy:

“But—but—ye cannot fail to grant that two mills a day is better than one.”

Shucks!  Well, of course, I hated to give it up.  So I chanced another flyer:

“Let us suppose a case.  Suppose one of your journeymen goes out and buys the following articles:

“1 pound of salt;    1 dozen eggs;    1 dozen pints of beer;    1 bushel of wheat;    1 tow-linen suit;    5 pounds of beef;    5 pounds of mutton.

“The lot will cost him 32 cents.  It takes him 32 working days to earn the money—5 weeks and 2 days.  Let him come to us and work 32 days at half the wages; he can buy all those things for a shade under 14 1/2 cents; they will cost him a shade under 29 days’ work, and he will have about half a week’s wages over.  Carry it through the year; he would save nearly a week’s wages every two months, your man nothing; thus saving five or six weeks’ wages in a year, your man not a cent.  Now I reckon you understand that ‘high wages’ and ‘low wages’ are phrases that don’t mean anything in the world until you find out which of them will buy the most!”

It was a crusher.

But, alas! it didn’t crush.  No, I had to give it up.  What those people valued was high wages ; it didn’t seem to be a matter of any consequence to them whether the high wages would buy anything or not.  They stood for “protection,” and swore by it, which was reasonable enough, because interested parties had gulled them into the notion that it was protection which had created their high wages.  I proved to them that in a quarter of a century their wages had advanced but 30 per cent., while the cost of living had gone up 100; and that with us, in a shorter time, wages had advanced 40 per cent. while the cost of living had gone steadily down.  But it didn’t do any good.  Nothing could unseat their strange beliefs.

OK, does any of this sound familiar? What economic debate are we having today that this exchange very closely mirrors?

I have been seeing posts and graphics on Facebook and Twitter about the minimum wages in various countries where it’s higher than in the US, sometimes with the admonition to “Like if the US should catch up with the rest of the world”. And when I see those posts, I can’t help but think that Dowley, were he to be transported 1500 years into the future, would himself shake his head in vigorous agreement, still stuck with his “strange beliefs”.

But, while I have a link in the show notes directly to chapter 33 of Connecticut Yankee (and reading the rest of the chapter brings its own humor and education), I have another one that lists the top 10 countries with the highest minimum wage, but brings in more of the rest of the story. Items like income and sales taxation are also listed so that, as Twain’s protagonist would point out, the actual purchasing power can be better understood. Maybe the reason the minimum wage is higher in those countries is so that the masses can afford to pay the higher taxes.

And yet I hear some begin their rebuttal with, “But—but—ye cannot fail to grant that ten dollars an hour is better than seven.”

The tax situation is not all of the rest of the story, though it is a burden that the Left just can’t stop from increasing. However, there are others portions, such as what Twain’s character notes; the cost of living in other places. Not just taxes, but the actual cost of goods. Even from one state, or even city, to another right here in the US, the cost of living can be vastly different. And then there’s the inflation rates. And then there’s the effect of mandated higher wages on small businesses who, in various cities around the country, are cutting jobs, shortening hours, or closing outright. And then there are certain union jobs that are pegged to the minimum wage, such that when the minimum goes up, so do theirs, making labor costs – and hence prices – rise at more than just restaurants and gas stations. The minimum wage number is one data point among a sea of others. The man on the street might not know this, but certainly our politicians do, and thus any politician who whips up his or her constituents with this one number is to blame for a failure in leadership; encouraging and reinforcing ignorance in pursuit of political power.

And let’s remember that just recently Wal-Mart announced a program to raise the wages of its lowest-paid workers up to $10 an hour within a year from now. They are paid higher than minimum now, but somehow, without government intervention or union negotiations, they are going to get more money for their jobs. Somehow, someway, the free market – including a company’s choice as to what to pay and pressure from the citizens; all a part of the market economy – managed to create the circumstances for higher pay. Wal-Mart, I am certain, has been planning on this for a while, perhaps by working on cutting costs, perhaps by increasing sales, and perhaps by dipping into profits. I don’t know, but I do know they have done this on their timetable and introduced the new wages when the company was ready to do it. But when minimum wage legislation forces the issue, it’s often not the Wal-Marts of the world that have trouble with it. It’s the small business, the mom-and-pop store, those kinds of businesses that don’t have the clout and volume of a Wal-Mart, that are hit hardest, either with jobs cut or businesses closing entirely.

Maybe our minimum wage does need to be raised. Perhaps we need a national conversation on it. But the conversation must include all the information necessary to make a good decision. If not, it is nothing less than the King patting Dowley on the back for having so skillfully defended his liege against the nonsense of an outsider.

Filed under: Economics & TaxesMinimum Wage