Between 1870 and 1889, wages for non-farm labor decreased from $1.57 per day to $1.39 per day, a decrease of 10.2 percent. During the same period, the Consumer Price Index decreased more than 23 percent. Even though wages for unskilled labor fell by more than 10 percent over twenty years, prices fell by two times as much, that is, a dollar bought a lot more. Further, there was much more available: canned goods became widely available in the 1880s, which provided a much more varied diet, such as fruits and vegetables that were not in season; refrigerated railroad cars made it possible for urban residents to eat fresh meat, grapes, and strawberries more frequently; improvements in the sewing machine enabled manufacturers to mass produce clothing at low prices; department stores offered consumers wide selections in clothing, household goods, and more. In short, the unskilled worker’s life was immensely better in 1889 than it had been in 1870, even though he was paid less.
It wasn’t government programs that improved the lives of Americans. It was increased productivity, and that was made possible by economic freedom.
We are often told that regulations are needed to “level the playing field” and promote competition.
Using government force to “level the playing field” means that a businessman must act contrary to his own judgment: he must charge a higher price, produce an inferior product, or take some other action that he believes will harm his business. This means that, in the name of competition, the businessman is prohibited from doing his best. To use force to promote competition is, as Ayn Rand wrote, “a grotesque contradiction in terms.”
Competition results when someone thinks that he can do something better or faster or cheaper. And that cannot be compelled by government decree—force negates judgment. Freedom sanctions an individual’s right to demonstrate his vision. Government coercion renders his vision impotent.
An excerpt from my book:
From 1959 to 1966, the Boston Celtics basketball team won the championship of the National Basketball Association (NBA) a record eight straight times. During the thirteen-year period from 1957 to 1969, they won the championship eleven times. The Celtics dominated their league unlike any professional sports team in history. From 1957 to 1969, the Celtics were “anti-competitive.”
Based on antitrust theory, the Celtics should have been broken up, fined, and forced to share the secret of their success with other teams. According to antitrust theory, the government should have intervened to “level the playing field.” Would that have been just? Would fans have cared to watch, knowing that, if their team was successful, the players might be fined or thrown into jail? Would the players be motivated to perform their best? This sounds ridiculous, yet, this is precisely the threat that hangs over the heads of America’s most successful businessmen.
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