Take a moment and look around you. Do you see any item in your immediate vicinity that could have been produced by a single person? No. Everything from the computer on your desk to the carpet on your floor required a pool of individuals in the labor economy to come together and create these goods that you get to enjoy today. And, yes, this does include the 5-Second Fix Liquid Plastic Welding Kit as seen on television! While progressives want you to think that everyone has to have two jobs just to pay rent, the state of the American worker is actually looking pretty good this Labor Day.
Consider the pencil, one of the most timeless examples in economics, thanks to legendary economist Milton Friedman. The pencil required the labor of scores of people who specialized in a particular area of the economy: cutting down trees to use the wood as the body of a pencil, manufacturing rubber to install an eraser on the back, and extracting graphite to allow you to write.
All of this would not have been possible if it were not for the division of labor, individuals using their human capital in a free-enterprise system to produce goods and services that the public wants.
A Socialist Utopia
Socialist and communist states were notorious for ruling with an iron fist in every aspect of society, particularly in economics. Possessing the fatal conceit, these men believed they had the knowledge to centrally plan industry, output, labor, and prices. Unfortunately, most of the population suffered because of these failed pursuits.
In Cambodia, for instance, Pol Pot attempted to fabricate a state of “perfect harmony,” free of class systems. The Khmer Rouge determined that agriculture would be its primary source of wealth. To achieve this objective, Pot and his henchmen erected collectivized communes and instituted forced labor. He organized workers into three categories: unmarried men, married men and women, and seniors over 40 – nothing about their acumen. Many of the laborers did not have farming skills – a great number of them were doctors, shopkeepers, or professors – so the crops were poorly harvested, generating widespread shortages and mass starvation.
This type of central planning was not only prevalent in Cambodia, but also in other socialist states, such as Soviet Russia, Mao’s China, and Robert Mugabe’s Zimbabwe. The results were no different.
If you were fortunate enough to practice your craft and apply your skills, you still did not have full freedom. While Nazi Germany did not directly nationalize the means of production, the socialist nightmare prohibited business owners from setting prices and determining wage rates. The Reichstag made all these decisions. You still had the same outcomes: shortages.
Imagine trying to centrally plan 133 million full-time American workers?
Critics of the capitalist system like to say that we are all wage slaves serving our corporate masters. Everyone is withering away, completing their Monday to Friday routine and abandoning meaning.
Like everything else the anti-capitalists shriek about on a regular basis, we say poppycock.
Indeed, nobody will argue with the idea that Corporate America is suffering from an employee morale crisis. At the same time, employers are trying to remedy this black eye in the labor market. Because millennials are dominating the workforce and hoping for something more than a paycheck, US businesses begging for talent are adapting to the environment. In addition to a paycheck, you will see a growing number of private firms offering flex time, showering workers with lucrative benefits, and transforming office landscapes beyond the mundane cubicle atmosphere.
That’s right. More offices are providing employees with complimentary massages, lunches, and foosball tables!
Even if the modern-day worker were not receiving any of this, they are still getting bigger paychecks for fewer hours. In today’s economy, workers are seeing their hourly wages climb and weekly hours fall. For businesses, productivity rates are at multi-year highs, a trend that leads to higher wages. There is no doubt that American workers are the best in the world, hence why they command greater earning power than other markets.
For all the complaints at your typical Marxist rally, employees in the Western world have it pretty good. Now, if only the government would stop confiscating a significant portion of your paycheck, which is what everyone should really be shaking their fists in the air about.
Capital Goods, Not Unions
It is Labor Day, so you will come across bumper stickers, asinine statements on television, and Facebook posts telling you to thank the unions for the weekend, bigger paychecks, and safe working conditions. If only this were true, then all it would take for the population of South Sudan or Burkina Faso to become prosperous and enjoy more leisure is to unionize!
Our forebears had it rough. With a small sum of capital and most production capabilities performed by hand, workers had to clock in 60 or 70 hours a week just to put food on the table. The introduction of capital goods – workers being more productive than ever before due to the rise of machinery and equipment – transformed our way of living, lifting our quality of life. Everything we take for granted today – eight-hour days, weekends, declining prices, swelling paychecks, and growing purchasing power – is because of capitalism, not Jimmy Hoffa.
Labor unions will usually promote socialist causes to obtain political power, but those progressive goals hurt the very people they supposedly represent. Put simply, workers in a free market labor force have it a lot better than workers in a non-free market workforce. Just ask those who were sent to the gulags, an authentic hub of slave labor!