Freedom, Society, and State - Ludwig von Mises Institute

dIe and upper class individuals began attending staterllnuniversities
in droves, the poor were not particu­
I a r I y a t t rae ted, eve n when i t wa s "f r e e • " Ins tea d ,
the yen t ere d the w0 r k - for c e, us u a I I Y get ting lowskilled,
low paying jobs and began paying taxes, some
of which went to provide low-cost, subsidized, education
for middle and upper class chi ldren at state
universities.(48)
A not her g 0 v ernmen t pro g ram wa s "j 0 bs t r a i n i ng , "
wh i ch began wi t h much fanfare in the "War on Poverty"
programs of the 1960's. This too proved a failure and
for the samerea son : 1 ike e d ucat ion, the pa yo f f s from
t ra in i ng programs lay months, maybe years, in the future.
In fact, the entire program was based on a contradiction.
A program designed to train the poor for
good jobs could not succeed for the same reason that
the poor do not have good jobs in the first place:
both good jobs and successful training are futureoriented;
the poor live in the present.(49)
The minimum wage is yet another example. Many
lIbertarians feel that this is the most pernicious of
a 1 I " an t i - p 0 v e r t y" leg i s I a t ion • Wages are de t e r mi ned
by the marginal productivity of labor. And since the
poor as a rule do not have the skills that would enable
them to become hIghly productive members of the labor
force the only jobs open to them are low-paying ones.
This is most unfortunate but good intentions are not
e n 0 ugh • Sin cern i n i mum wage leg i s I a t ion doe s not, and
can not, increaset he rna r gina I prod uc t 1 V i t Y 0 f the poor
its only effect is to eliminate their jobs. If an ind
i v i d u a 1 w0 r k e r 's rna r gina 1 val ue . toth e fir m i s $ 3 • 00
per h 0 ur, ani ncr e as e i nthe min i mum wa g e from $ 2 .90 to
$3.10 per hour means that the worker will lose his job.
T h us, the 0 n e s m0 s t h u r t by min i murn wa gel aws are the
least productive members of society, i.e., the
poor.(SO) If the foregoing is correct, then the ability
of government to eliminate poverty is most limited,
indeed.
Once the cui tural basis of poverty is recognized,
the government appears to have but two options: [1] to
insure everyone a minimum income and/or [2] to somehow
change the t ime- frame of the poor from a present to a
future orientation. The problem with the former is
that if the minimum is set high enough to eliminate
poverty it would also be hIgh enough to have a disincent
ive effect on those whose incomes are only slightly
above the mInimum. If some of this group quit not only
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