Wednesday, June 17, 2015

Eugenics and the minimum wage

One of the more tragic ideas to catch on during the progressive era (late 19th and early 20th century) was eugenics. According to Diane Paul (2001) “Eugenics” describes a movement to improve human heredity by the social control of human breeding, based on the assumption that differences in human intelligence, character and temperament are largely due to differences in heredity.

Many prominent economists were supporters of eugenics. Thomas C. Leonard wrote an article that was published in the Journal of Economic Perspectives in 2005 that re-introduced some of the most prominent economists who supported eugenics. For example:

     “If we could leave out of account the question of race and eugenics,” Irving Fisher (1921, pp. 226–227) said in his presidential address to the Eugenics Research Association, “I should, as an economist,be inclined to the view that unrestricted immigration . . . is economically advantageous to the country as a whole . . . .” But, cautioned Fisher, “the core of the problem of immigration is . . . one of race and eugenics,” the problem of the Anglo-Saxon racial stock being overwhelmed by racially inferior “defectives, delinquents and dependents.”


     “Social progress is a higher law than equality,” said Simon Patten, economist at the Wharton School and American Economics Association (AEA) president in 1908, and the only way to progress was the “eradication of the vicious and inefficient.” Frank Fetter (1899, p. 237), who was to serve as president of the AEA in 1912, also worried that “the benefits of social progress are being neutralized by race degeneration” owing to the “suspension of the selective process.”

And even though the moral character of these economists was dubious, their understanding of economic theory was sound. In fact, it was better than many of the progressive economists of today. For though their ends were detestable, they recognized the appropriate means for getting there; make the lower classes unemployable. After all, if a person can't work they can't afford to raise a family. What is a good way to ensure that the least productive, lowest class of people are unemployable and can thus be recognized by society as such? Increase the lowest wage at which people are allowed to be hired. From the article:

     Sidney and Beatrice Webb (1897 [1920], p. 785) put it plainly: “With regard to certain sections of the population [the “unemployable”], this unemployment is not a mark of social disease, but actually of social health.” “[O]f all ways of dealing with these unfortunate parasites,” Sidney Webb (1912, p. 992) opined in the Journal of Political Economy, “the most ruinous to the community is to allow them to unrestrainedly compete as wage earners.” A minimum wage was seen to operate eugenically through two channels: by deterring prospective immigrants (Henderson, 1900) and also by removing from employment the “unemployable,” who, thus identified, could be, for example, segregated in rural communities or sterilized.


     Columbia’s Henry Rogers Seager, a leading progressive economist who served as president of the AEA in 1922, provides an example. Worthy wage-earners, Seager (1913a, p. 12) argued, need protection from the “wearing competition of the casual worker and the drifter” and from the other “unemployable” who unfairly drag down the wages of more deserving workers (1913b, pp. 82–83).

I encourage you to read the whole article. It is an informative read.

It would be wise of the modern progressives to remember the roots of the minimum wage. It is not a tool to lift people out of poverty; rather it is a tool to keep people in it. The effects of a minimum wage are the same today as they were back then: It makes the least educated, lowest skilled people unemployable by raising the cost of their labor above the value it produces. If you want to ensure that those types of people remain in poverty, a high minimum wage is a good place to start.

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