It is generally agreed, both inside and outside Eastern Europe, that the only cure for their intensifying and grinding poverty is to abandon socialism and central planning, and to adopt private property rights and a free-market economy. But a critical problem is that Western conventional wisdom counsels going slowly, "phasing-in" freedom, rather than taking the always-reviled path of radical and comprehensive social change.
There is no clearer demonstration of the essential identity of the two political parties than their position on the minimum wage. The Democrats propose to raise the legal minimum wage from $3.35 an hour, to which it had been raised by the Reagan administration during its allegedly free-market salad days in 1981. The Republican counter was to allow a "subminimum" wage for teenagers, who, as marginal workers, are the ones who are indeed hardest hit by any legal minimum.
Mark Shields, a columnist for the Washington Post, recently wrote of President Reagan's "blind devotion to the doctrine of free trade." If President Reagan has a devotion to free trade, it must be blind because he has been way off the mark. In fact, he has been the most protectionist president since Herbert Hoover.
The supply of labor is limited. We must not allow government to create jobs or we lose the goods and services which otherwise would have come into being. We must reserve precious labor for the important tasks still left undone.
Each year at this time, schoolchildren all over America are taught the official Thanksgiving story, and newspapers, radio, TV, and magazines devote vast amounts of time and space to it. It is all very colorful and fascinating.
It is also very deceiving.
Free-market capitalism is a marvelous antidote for racism. In a free market, employers who refuse to hire productive black workers are hurting their own profits and the competitive position of their own company.
