Welfare State's Main Function is Corporate Welfare
Thanks to a Twitter friend, I just stumbled across remarks from 2005 in which Wal-Mart CEO Lee Scott called on Congress to pass a higher minimum wage:
"The U.S. minimum wage of $5.15 an hour has not been raised in nearly a decade and we believe it is out of date with the times. We can see first-hand at Wal-Mart how many of our customers are struggling to get by. Our customers simply don't have the money to buy basic necessities between pay checks."
At first glance this seems decidedly odd, coming as it does from the CEO of a company which -- as you know if you've been following the Black Friday news -- is notorious for keeping its workers' pay as low as humanly possible.
But if you think about it, there's really no contradiction at all. There's a fundamental prisoner's dilemma at the heart of capitalism. It's in the interest of large corporations collectively to guarantee sufficient purchasing power to keep the trucks moving and the inventories turning over. But it's in the interest of individual large corporations to keep labor costs as low as possible.
Likewise, it's in individual employers' interests to pay only enough to maintain employees in subsistence while they're actually working, without enough of a surplus to save against periods of sickness or unemployment. But it's in the collective interest of employers to pay enough to cover the minimum reproduction cost of labor power.
Overcoming such prisoners' dilemmas is the main purpose of the capitalists' state. When the state mandates a minimum wage sufficient to facilitate the reproduction of the workforce (of course it doesn't in practice, outside the European "social democratic" model of capitalism), the cost falls on all employers in a given industry equally. So funding the minimum reproduction cost of labor-power is no longer an issue of cost competition among employers; it's a collective cost of an entire industry that can be passed on to consumers as a cost-plus markup, via administered pricing.
The state, in many ways, functions as an executive committee of the economic ruling class, carrying out for them in common many necessary functions it's not in their interest to carry out individually. The state, in short, cleans up the capitalists' messes for them.
Things like the minimum wage, collective bargaining, and universal healthcare may be perceived by individual capitalists as a restraint or an imposition. But they're supported by the smarter capitalists -- especially those in the industries that benefit most from them. Just consider the role of General Electric CEO Gerard Swope in the business coalition behind the New Deal.
Any time you hear soccer mom rhetoric about "our working families," or self-congratulatory platitudes to the effect that "Democrats care," look behind the voice and take a look at what the hands are actually doing. In a freed market -- without the state to do the capitalists' bidding -- corporate capitalism would wither like a garden slug with salt on its back. The state works for the capitalists, not for you.
(Kevin Carson is a senior fellow of the Center for a Stateless Society.)
Unreasonable Overdraft Fees Scrooge Customers
Where is George Bailey? I hate Pottersville!
I was standing in line at a bank and overheard a conversation between a teller and a customer, "There was a $32.50 overdraft fee and then after 5 days it is an additional $6.50 fee per day." Holy bank robbery, Batman; $6.50 per day? The original overdraft was only about $23.00.
I had to stop and change my transaction -- I was going to deposit everything but now I kept out $75.00 as the $23.00 overdraft of the poor victim in the next lane had blossomed to over $70. I was more than willing to pay it for her just so the fees would stop accumulating.
Ironically, I was there with the day late rent payment from one of my renters. In the lease it says, and they initialed it, "Late fee of 2 percent for everyday up to five days." I have never collected that. I will if they are late every month (this was the first month they lived there -- think about it -- utility deposits, needed a couch, they were already struggling ...)
Kicking people when they are down makes no sense to me. I refuse to participate unless absolutely necessary. I just saw a TV show on "A" people -- the list included Scrooge, Steve Jobs, K. West... granted they are all rich like I wish I was.
But I think the first step I will take toward becoming rich will be to do more of my banking at Arvest. There they have a $17.50 overdraft and you had better get it back in there before they close your account.
I will let that big bank who, by their name, seems to wish to represent Oklahomans go on without me. Rich Oklahoma bank customers can bank there, and the other 94 percent of us who cannot afford to pay that for mistakes should bank elsewhere. (Roughly less than 6 percent of the US population makes more than $75,000 a year. I have always wanted to be part of the 6 percent club, but not by stealing from other people.)
Pay More for Parking? What Is This, New York?
(Re: "Pay to Stay," Nov. 29-Dec. 5)
I, for one, am sick of hearing how we in Tulsa are paying less than a city like New York for every day goods like parking and gasoline. We don't make as much! It is called cost of living. If the people in charge of this place start charging Ferrari prices whilst everyone is making Pinto wages (for those of us who are old enough to know what a Pinto is), the difference between the rich and poor will become greater, which doesn't help this city, but hurts it.
--David P. Buchanan
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