So in the spirit of providing politically feasible “libertarian policies,” I want to offer a set of proposals to improve one area of American society that desperately needs it: the inner city. There’s no need to recite the gory statistics on incomes, unemployment, poor schools, violence, fractured families, African-American men in jail — or the challenge that folks in these core urban areas face in extracting themselves from that mess. Here then is my three-point libertarian program for urban renewal.

Allow School Choice

First, institute some form of meaningful school choice. Abolishing the government schools is the ideal solution but unlikely in the short run. Expanding parental choice through a voucher or tax-credit system is more politically feasible as we’ve seen in several U.S. cities in the last decade or two. The evidence from these systems generally indicates that they have been successful in improving student outcomes, and the excess demand for the limited spots indicates that parents want alternatives to the disaster of inner-city schools. Education is supposed to enhance human capital, but those schools arguably destroy it because students not only don’t get a decent education, they also learn how to avoid doing so and face strong cultural pressure to not be smart. Opening up the school system to real competition from the private and religious schools would give the students who want to succeed real options and would put more powerful pressure on the government schools to reform or go private.

End the Minimum Wage

There are numerous paths out of poverty, but almost all of them involve either a good education or real job opportunities, which leads to my second policy proposal: Repeal minimum-wage and occupational licensing laws. The economic analysis of minimum-wage laws is well-known and is supported empirically by hundreds of studies over the years. A minimum wage acts as a minimum productivity law, requiring that people reach a certain productivity threshold before employers will be willing to employ them. Such a law cuts off the bottom rungs of the income ladder for people with less education or lower skills — in other words, the products of inner-city government schools. Firms will hire less-skilled workers if they are willing to work for a wage commensurate with their skills. Minimum-wage laws prevent employers and low-skilled potential employees from striking such mutually beneficial bargains.

Occupational licensure similarly shuts poor workers out of the labor market by imposing unnecessary costs on people who can least afford it. Licensure is usually lobbied for by well-resourced incumbents as a way to keep out lower priced competition. From beauticians to hair braiders to taxi drivers, licensing laws prevent people from selling goods and services to willing buyers. Eliminating such laws would create numerous job opportunities for workers with specific skills but insufficient resources to acquire the needed license. Such laws protect the privileged at the expense of the poor.

Terminate the War on (Some) Drugs

Finally, we need to end the War on (Some) Drugs. Whatever one’s perspective on whether people should be allowed to do as they please with their bodies, there’s little doubt that making pot, cocaine, and other drugs illegal has been a huge contributor to the level of violence in so many inner cities. When your product is illegal, there’s no way to settle disputes under the umbrella of law and the peaceful coordination it promotes. Just as the CEOs of Anheuser-Busch and Coors don’t have gunfights when one rolls out a new beer, so would legalizing drugs reduce, if not eliminate, the violence among drug sellers. And the corresponding drop in price would reduce the criminal behavior of users who steal to support their habit. By taking the huge profits out of the drug trade, legalization would also end the glamour of the dealer and help kids see alternative pathways to success. With violence reduced, both schools and the marketplace would be more conducive to learning and peaceful trade.

People on both the left and right might disagree with my program for urban renewal, but they cannot say that this libertarian hasn’t offered concrete policy proposals to address the problems. I would hope that conversations about public policy in any realm can move beyond accusations about “having no solutions” and instead debate the merits of concrete proposals. More freedom is a policy proposal and one that works. If libertarians can put “more freedom” in the right packaging, we might well start to see real results.

Licensing, for example, prices poor people out of business.

Take taxis: in New York City, you have to buy a license, or “medallion.” New York restricts the number of medallions so tightly that getting one costs hundreds of thousands of dollars.

“There are not many black-owned taxis in New York City,” George Mason University economist (and Freeman columnist) Walter Williams told me. “But in Washington, most are owned by blacks.” Why? Because in Washington, “it takes $200 to get a license to own and operate one taxi. That makes the difference.”

Regulation hurts the people the politicians claim to help.

People once just went into business. But now, in the name of “consumer protection,” bureaucrats insist on licensing rules. Today, hundreds of occupations require expensive licenses. Tough luck for a poor person getting started.

Ask Jestina Clayton. Ten years ago she moved from Africa to Utah. She assumed she could support her children with the hair-braiding skills she learned in Sierra Leone. For four years she braided hair in her home. She made decent money. But then the government shut her down because she doesn’t have an expensive cosmetology license that requires 2,000 hours of classroom time—50 weeks of useless instruction. The Institute for Justice (IJ), the public-interest law firm that fights such outrages, says “not one of those 2,000 hours teaches African hair-braiding.”

IJ lawyer Paul Avelar explained that “the state passed a really broad law and left it to the cosmetology board to interpret.”

Guess who sits on the cosmetology board. Right: cosmetologists.

And they don’t like competition.

One day, Jestina received an email.

“The email threatened to report me to the licensing division if I continued to braid,” she told me.

This came as a shock because she had been told that what she was doing was legal. Twice, in fact.

No customers complained, but a competitor did.

One cosmetologist claimed that if she didn’t go to school she might make someone bald.

But this is nonsense—hair-braiding is just . . . braiding. If the braid is too tight, you can undo it.

The cosmetology board told Jestina that if she wanted to braid hair without paying $18,000 to get permission from the board, she should lobby the legislature. Good luck with that. Jestina actually tried, but no luck. How can poor people become entrepreneurs if they must get laws changed first?! Jestina stopped working because she can’t afford the fines.

“The first offense is $1,000,” she said. “The second offense and any subsequent offense is $2,000 each day.”

“It is not unique to Utah,” Avelar added. “There are about 10 states that explicitly require people to go get this expensive, useless license to braid hair.”

Fortunately, IJ’s efforts against such laws have succeeded in seven states. Now it’s in court fighting for Jestina, which, appropriately, means “justice” in her native language.

Once upon a time, one in 20 workers needed government permission to work in their occupation. Today, it’s one in three. We lose some freedom every day.

“Occupational licensing laws fall hardest on minorities, on poor, on elderly workers who want to start a new career or change careers,” Avelar said. “[Licensing laws] just help entrenched businesses keep out competition.”

This is not what America was supposed to be.

Playing Chicken with the Ag Department

Josh is a Mennonite friend who happens, by the grace of native talent and a powerful work ethic, to produce magnificent chickens.  Raised on green growing pasture, they are never medicated, never fed artificial supplements or genetically selected to grow abnormally fast.  They develop rich golden fat and a deep flavor, characteristics that have been more or less lost in modern, streamlined, highly efficient poultry production.  Not surprisingly, Josh’s chickens are in high demand among food cognoscenti and fine restaurants.  A couple of years ago I began bringing Josh’s chickens to my farmers’ market stand to sell alongside our equally popular grassfed beef.  Josh and I, in a classic entrepreneurial endeavor, have made these wholesome chickens available to happy, discerning customers who would otherwise be unable to justify a three-hour commute to buy a bird for dinner.

Josh processes his chickens on his farm under a legal exemption allowing him to avoid industrial (and expensive) processing plants.  Each chicken he produces is clearly labeled as to origin, method of production, added ingredients (none); the label also cites the statute that allows him operate unmolested.

Recently he was informed by the Food Safety Inspection Service, the regulatory arm of the USDA, that he faced a “situation.”  They had discovered a chink in the otherwise protective “non-molestation” statute.  Because he is marketing chickens to an intermediary (me), his product is therefore rendered illegal and he must desist.  In a disturbing addendum the inspector also let slip that the USDA would be “willing and free of charge” to take over inspection of his facilities and that they would be “more than happy to help him get going,” presumably in the chicken business.

The same authority willing to allow a company to distribute (and I’m not making this up) a neon-green sugar drink with the word “sweetener” (in quotes) on the ingredient list believes that customers cannot be trusted to buy a natural chicken from a reputable farmer.

Raising the Roof

I have an old shed I’d like to turn into an office.  It’s a small, uncomplicated project.  I do not intend to host conventions there or otherwise expose innocents to my construction acumen.

I could use a hand, so I called a man advertising his handyman services on a placard outside the feed store.  We talked it over; he needed capital and I needed labor; we had a deal.  I had expected to be hammering on joists this morning instead of this keyboard but for the fact that he didn’t show up today.  Why?  The county, vigorously addressing this “situation,” had torn down all his signs (including one in front of his home) citing him for neglecting to indicate his contractor’s license.  Fair enough, you say; he knows the rules and got burned. So why the stink?

Well, here is a gentleman in his mid-50s with more than 25 years of construction experience who was a licensed contractor in Florida before moving to Arizona.  For more than six months he has been fighting to gain the requisite licensing.  He is obliged, among other onerous duties, to provide twenty-five references spanning his entire career and from across a continent before his application can enter the waiting list.  He estimates his application will cost $10,000 and take another six months.  He is afraid to work with me, even as a “tutor,” because he has been told that counties often set people up to entrap them.

Once again presumptuous authority has stepped between educated, intelligent adults to prevent free, fully cognizant transactions.  Am I a pathological obediphobe to find such meddling unsavory?

Even if these cases turn out to be simple errors in communication or an innocent overstepping of authority, the damage has already been done.  The perception alone is enough to chill behavior.  In relaying these injustices I have now wasted hours that could have otherwise been spent creating outstanding beef; Josh is reducing his next order of chicks; and an out-of-work man with a lifetime of skills sits idle wishing for work.

Perhaps these are just the fickle vagaries, the marginalia of an otherwise appropriate regulatory regime.  But I’m afraid they represent a deeper, metastasized, problem.  The late Mr. Jefferson, that “intellectual voluptuary” according to his Big Government nemeses, explained that government’s only purpose is to secure natural rights.  Governments, he believed, exist to protect life, liberty, property, and little else.  It’s probably archaic of me to wish for a return to such a limited view, but I can’t help it.  The kind of absurd oversight now considered standard practice feel fundamentally unjust.

It would be wonderful to live in a world where selling a chicken and remodeling a shed weren’t rife with official allegations or burdened with State prohibitions.

What’s surprising about those reactions is that they seem at odds with the facts and tone of the article.  My point in demonstrating the changes in the economic condition of poor Americans is not to suggest all is well, but instead to celebrate how much progress we’ve made in reducing absolute poverty and to counter the claim that poor Americans are worse off than they used to be.  Nothing in the data I presented indicates that every single poor person is better off now.  Rather I was arguing that on average poor people today live better than a generation ago. (They live longer than they did in 1980 as well).  I was also arguing that this is a good thing.  How this qualifies as “hating” poor people is beyond me.

It’s also not clear how this means that I don’t care about getting rid of the poverty that does exist in the United States.  Celebrating the gains also does not mean I am blaming the remaining victims.  In a recent column I argued that libertarians can certainly accept that there are structural reasons for poverty.

What’s to Be Done

Okay, so what can we, as libertarians, do to reduce the poverty that remains?   My own libertarian antipoverty agenda, which is mostly focused on urban poverty, would have three major planks, all of which involve getting government out of the way so that it stops being the structural cause of poverty.

First, eliminate all minimum-wage and occupational-licensure laws.  Almost all these laws have their origins in racism and xenophobia: One need only look to the racist authors of South African apartheid, who used minimum-wage laws to help carry out their malign objectives, and the U.S unions that pushed for such laws to explicitly keep blacks and foreigners from competing for jobs.  Racial or ethnic majorities with political power have consistently harmed their poorer, minority fellow citizens this way. These laws cut off the bottom rungs of the economic ladder for those lacking the skills to earn higher wages or the capital to pay for the licensing requirements.

Second, open up the public schools to competition, if not outright abolishing them.  Urban public schools are not just ineffective, they are also positively destructive of human capital.  Throwing more money at them hasn’t worked, and it’s time to give poor Americans, especially poor folks of color, the opportunity to get the education they deserve by making schools actually compete for students.  The combination of awful public schools and minimum-wage and licensure laws has kept more Americans poor than any other set of policies of the twentieth century, and they have damaged African-Americans more than anything the Klan ever did.

War on Drugs

Third, end the War on Drugs.  The culture of violence created by the drug war, along with the way that it has driven legitimate businesses out of poor areas, has done a great deal to impoverish Americans — especially Americans of color.  In addition, it has destroyed families by arresting people, disproportionately poor and nonwhite, for victimless crimes.  (The police enforcing these laws also routinely destroy families by arresting the wrong people, often killing innocents in the process.)  Legalization would take the profit and violence out of the drug trade and make poor urban areas increasingly hospitable for businesses and thus jobs.

My list could have been longer, but this is where I would start. Too many poor Americans are stuck in poverty because government puts structural barriers  in their way.

My critics might disagree with my diagnosis of the problem, but that’s different from claiming I don’t care about the poor.  I care about them very much, which is why I chose to highlight how much progress we’ve made in the last generation.  Now if we can get the State out of the way, we’ll do even better in the next and spread those gains even more widely.

The Institute for Justice (IJ), a libertarian public-interest law firm, works to free entrepreneurs from such opportunity-killing regulations. Here are four cases from IJ’s files.

Case No. 1. The monks at St. Joseph Abbey had to take the state of Louisiana to federal court to defend their right to make money selling handmade caskets. That’s right: empty wooden boxes. As soon as the monks started selling them, they were shocked to receive a cease-and-desist order from something called the Louisiana State Board of Funeral Directors. The funeral directors had managed to get their state to pass a law decreeing that only “licensed funeral directors” may sell “funeral merchandise” like caskets. To sell caskets legally, the monks would have to obtain a funeral director’s license. That required a year-long apprenticeship, passing a funeral industry test, and converting their monastery into a “funeral establishment” by installing embalming equipment, among other things.

The state board and the Louisiana Funeral Directors Association—the profession’s lobbyist—say the law is designed to protect consumers. But that’s what established businesses always say about absurd regulations they demand. An unusually candid funeral director told the Wall Street Journal, “They’re cutting into our profit.” Well, yes, free competition does do that. That’s the point.

Another funeral director said that the law must remain unchanged because casket-making is a complicated business: “A quarter of America is oversized. I don’t even know if the monks know how to make an oversized casket.” Does that even deserve a comment?

Wheels, No Justice

Case No. 2. Hector Ricketts wants to offer New York City residents an alternative to New York’s slow and clumsy public transportation. He employs drivers who offer commuters rides in minivans. The vans serve mostly low-income neighborhoods and typically charge $2 a head. People like the vans. They’re more convenient than unionized government-run public transit—and cheaper, too. The subways and buses charge $2.25.

So the city’s public transit union used its political connections to regulate the vans to death: The politicians have decreed that vans may not drive routes used by city buses or provide service to a passenger unless it is prearranged by phone; and the vans must keep a passenger manifest on board and enter the name of everyone to be picked up.

“Government makes it easier to get on welfare than to grow my business,” Ricketts says.

The fight continues.

Case No. 3. Melony Armstrong of Tupelo, Miss., wanted to expand her African hair-braiding business. But Mississippi bureaucrats told her that to teach workers how to braid she needed a full cosmetology license. That required 1,200 hours of classes. Next, she needed a cosmetology instructor’s license—2,000 more hours.

The courses and license had little to do with her profession. They were simply barriers to entry favored by her competition. Fortunately, IJ won that case.

Case No. 4. Dennis Ballen has a bagel shop located far off the main roads in Redmond, Wash. He couldn’t afford to advertise on radio or TV, so he paid people (typically unemployable people with quirky personalities) to stand on the road with a sign directing traffic to his store. It worked. The sign brought him two or three new customers a day.

Then Redmond police slapped him with a cease-and-desist order, warning he could face a year in jail or up to $5,000 in fines if he didn’t stop displaying the sign. Ballen estimates that he would lose at least $200 a day in business if he complied. He and IJ sued the city and won the right to employ the sign-holder.

It’s great that IJ and some determined entrepreneurs win a few victories for free enterprise. But in a country with a real free market, such lawsuits would be unnecessary.

Note that in my short list of examples, each one is due to action by the federal government. In Leviathan, Clint Bolick reminds us that Americans have every bit as much to fear from authoritarian laws, regulations, and confiscations at the hands of local government officials as they do from the great circus of government camped in Washington. In fact, he argues that we actually have more to fear from our local Pooh-Bahs, writing, “If the president starts an unpopular war or raises taxes, people know who to blame and they direct their energy accordingly. But if your kid gets a lousy education in public school, or your local government decides to exercise eminent domain to take your home or business, it is often impossible even to find out who is responsible, much less to fight it.”

Bolick, an attorney who has fought many legal battles against intrusive and authoritarian local government actions, gives us a depressing catalogue of the rights infringements that are becoming commonplace—violations of freedom of speech, freedom to engage in commerce, freedom to use and enjoy one’s property, and more. He first disabuses his reader of the notion that the Constitution protects people against such infringements, noting that most judges—and crucially, the justices of the Supreme Court—don’t take seriously the idea of individual rights. They choose only a few rights they like (for example, free speech, some of the time) and defend them against legislative or regulatory incursion, but adopt a posture of “deference” to the supposed expertise of politicians and their appointed agents on most other questions.

Consider the case of Garland Allen. Allen, a rather elderly black barber, had been practicing his trade for many years in a small town in rural Tennessee. In 1996 he was arrested in his barber shop for the crime of “impersonating a professional.” No customer had complained about Allen’s competence, but a competing barber had notified the august Tennessee Board of Barbering Examiners that Allen didn’t have a license to work as a barber. When he was young, no barbering schools in Tennessee admitted blacks, and now Allen couldn’t afford the nine months and $5,000 it would cost for him to go to school to be taught what he already knew. He was in danger of being put out of business and into poverty because of a completely needless regulation, the sole purpose of which was to restrict competition.

Fortunately for Allen, the Institute for Justice, for which Bolick works, threatened to sue to block the Board of Barbering Examiners from taking away his livelihood. The threat of action succeeded. Unfortunately, thousands of others are caught up in such occupational licensing snares each year. Freedom to engage in simple commerce is blocked by innumerable laws and regulations put in place by friendly state and local politicians—friendly, that is, to interest groups that want barriers to entry into their fields.

Bolick also details the vicious abuse of eminent domain, which under the Supreme Court’s current reading of the Fifth Amendment (hostile both to the document’s intent and to the rights of property owners) allows government to seize land from people whenever politicians decide that transferring it to someone else serves “the public interest.” Again, he shows that the government that’s supposedly the closest to the people can be the most callous.

Perhaps even more disturbing are the many civil asset-forfeiture laws enforced by state and local officials. Those laws permit officials to seize property without any compensation if they can convince a judge—and there are plenty of judges who don’t give a hoot about private property except their own—that it was used in connection with a crime. In one case Bolick relates, a woman whose teenage son had been driving her car when caught selling drugs had to suffer the loss of the vehicle. Never mind that she had no knowledge of her son’s activities. She was eventually able to show that local officials were living high on the proceeds of confiscated property. That particular statute was struck down by an appellate court on due-process grounds, but many others like it remain.

Bolick concludes with a helpful and hopeful chapter, “Fighting Big Government at the Local Level,” which shows that people don’t have to meekly tolerate these assaults on their rights.

If the most useful books are those that make people justifiably angry, Clint Bolick has written an extremely useful one.

No one can honestly believe that Louisiana’s flower cartel is necessary to protect consumers from renegade flower sellers. Rather, it is a classic case of protecting favored groups at the expense of consumers and entry-level entrepreneurs.

Such is the state of economic liberty in America today. Across the nation, the basic right to earn an honest living is under attack. Legislators and bureaucrats are teaming up with entrenched special interests to create needless obstacles to countless entrepreneurs’ pursuit of the American Dream. In the past few decades there has been a nationwide explosion of protectionist regulations—while there were about 80 occupations with such barriers to entry in 1981, today there are over 1,000.

An Institute for Justice (IJ) case that recently attracted international media attention vividly illustrates the uncontrolled growth of occupational licensing and the outrageous lengths that a cartel will go to protect all facets of its business from the most harmless of trades.

Mercedes Clemens was threatened with thousands of dollars in fines and criminal prosecution unless she stopped . . . massaging horses. In Maryland two powerful groups decided to monopolize the growing field of animal massage by requiring all practitioners to spend four years in veterinary school—where massage is not even taught.

Suggesting that only people with veterinary degrees are capable of massaging animals is like suggesting that only people with medical degrees are capable of massaging humans. Preventing Clemens—who is a licensed human-massage therapist and certified in equine massage—from working in her chosen trade has absolutely nothing to do with consumer or animal safety and everything to do with the financial interests of the veterinary cartel.

In 2004 the Tenth U.S. Circuit Court of Appeals wrote in Powers v. Harris, “[W]hile baseball may be the national pastime of the citizenry, dishing out special economic benefits to certain in-state industries remains the favored pastime of state and local governments.” And for decades, following the instructions of the U.S. Supreme Court, federal and state courts have stood by while legislators engage in this “favored pastime” at the expense of consumers and entrepreneurs.

Government Protects Special Interests

In the absence of meaningful judicial supervision, politicians have gone to almost any imaginable length to protect special interests. When a powerful lobby demands protection from competitors, governments have been all too willing to invent—and courts all too willing to accept—patently ludicrous excuses for shutting down entrepreneurs. A court upheld Louisiana’s florist-licensing scheme, for example, because requiring florists to take a test, which would be graded largely on the subjective beauty of their floral arrangements, might help protect the public from “infected dirt.”

The true victims of this new “favored pastime” are people like Clemens and countless other Americans, honest individuals whose lives have been turned upside down solely to protect the politically powerful. Such examples are seemingly endless.

In Texas, all computer-repair technicians must now become private investigators. “If you’re investigating or analyzing data, then you should need a little more credentials than someone who just repairs computers,” the legislative sponsor said. The PI license requires a criminal-justice degree—or a three-year apprenticeship under a licensed private investigator. If a consumer knowingly takes his computer to get repaired by an unlicensed specialist, he faces thousands of dollars in fines and a year in jail. This law no doubt benefits special interests, but those benefits come directly at the expense of ordinary repair technicians and their customers.

A new law in Philadelphia will make it a crime in the coming weeks to talk about the Liberty Bell for money without the government’s permission. Unlicensed tour guides will be subject to hundreds of dollars in fines for talking about the place where the Declaration of Independence was written. Perhaps the most well-organized cartelization effort underway in the United States today is in the interior-design industry. A powerful faction of insiders has already put thousands of its competitors, mainly middle-aged and elderly women, out of work.

The American Society of Interior Designers (ASID) represents less than 3 percent of all designers, but its members have designated themselves as spokespeople for the entire industry. In over 30 years of lobbying, ASID has never presented a single shred of evidence to support its extraordinary claim that literally “every decision an interior designer makes affects life safety and quality of life.”

ASID has been relentless in teaming up with legislatures coast to coast in its strategy for total cartelization. IJ has documented these efforts in a study titled “Designing Cartels.”

Such laws exist today for one reason: Our nation’s judicial system fails to protect the right to earn a living. Courts have decided that this fundamental right—economic liberty—is simply not as important as other rights, and less-important rights are thus not subject to meaningful judicial scrutiny and rarely are afforded protection under the law. If the government can simply dream up a conceivable reason for violating economic liberties, even if that reason is based on no facts, the regulations are generally upheld. Amazingly, courts will even help by inventing their own hypothetical rationales for economic protectionism. This system does not just stack the deck—it gives the politically powerful a hand full of jokers.

Thankfully, entrepreneurs are fighting back. Taxicab drivers, African hair-braiders, sign-hangers, waste haulers, casket sellers, and others have battled the odds (with help from IJ) to strike down occupational-licensing schemes.

Mercedes Clemens’s lawsuit has already caused one of the licensing boards to backpedal. The Philadelphia tour guides, now represented by IJ, had a hearing in federal court on October 6. In Texas, computer-repair technicians and interior designers are standing up for their constitutional rights.

F. A. Hayek famously wrote that “the great aim of the struggle for liberty has been equality before the law.” That is precisely what the fight for economic liberty is all about.

by Lynne Viola

Oxford University Press • 2007 • 278 pages • $30.00

Reviewed by Richard M. Ebeling

In The Harvest of Sorrow (1986), historian Robert Conquest estimated that in the early 1930s as many as nine million people may have died during the forced collectivization of land in the Soviet Union. They were shot, tortured, or starved to death. Peasant resistance to the state’s seizure of their farms was dealt with by Stalin through a planned famine that finally broke all countryside opposition to the march into the bright and beautiful socialist future.

In 1931 Lady Astor of Great Britain was privileged with an audience with Stalin in the Kremlin. She point-blank asked him, “And how long are you going to go on killing people?” Stalin calmly replied, “As long as it is necessary. . . . The violent death of a large number of people was necessary before the Communist State could be firmly established.”

One of the few Western journalists of the time who was able to get outside Moscow to visit some of the famine areas in southern European Russia and Ukraine was William Henry Chamberlin. In a series of articles that he wrote on his return to the United States in 1934, he reported seeing skeleton-like undernourished children, adults barely able to walk from hunger, and hushed whispers of cannibalism in a gruesome attempt by some to stay alive. Red Army detachments and units of the secret police attempted to block all roads into these areas to prevent any of the victims from escaping or their friends and family members in the cities from bringing food to those condemned to this terrible fate.

The main target of Stalin’s wrath was the supposedly richer peasants known as kulaks, who were said to be the main opponents and resisters of collectivization. They were labeled the countryside “capitalist class” and therefore the primary “enemies of the people.”

Stalin’s other method of dealing with the kulaks was compulsory exile to some of the harshest and least inhabitable parts of northern European Russia. These victims are the subject of Lynne Viola’s book, The Unknown Gulag, the tragic details of which have never been thoroughly studied before. She estimates that between 1930 and 1933, well over two million people were transported to these faraway regions of the Soviet state.

Hundreds of young Communist Party members from the cities, who knew nothing about the peasantry or farming, were sent to the rural areas to assist in the collectivization. Indoctrinated by the party’s propaganda that the kulaks were the stumbling block to “building socialism,” these communist thugs intimidated and violently abused people when and how they wanted. Inspired by the idea of production quotas under the newly instituted five-year plan, they set up quotas for killing and exiling peasants as quantitative indicators of breaking the resistance to state-run collective farming.

Like much in the Soviet planned society, the details of exiling millions of people had not been thought out beforehand: how to transport and feed hundreds of thousands of families, how they would build shelter, what types of work they would be required to do once they reached their assigned locations. But trains were arranged, and these hapless people were crowded into cattle cars with barely room to stand, little or no food, and no hygienic facilities. The journeys would take two or more weeks to the north Russia territories around the towns of Archangel, Vologda, and Kotlas, or across the Ural Mountains to northern Siberia.

Only slowly were party commissions appointed to decide what was to be done with the exiles. In their secret reports to senior party officials, the heads of these commissions admitted that disease, starvation, and bitter cold weather were decimating the kulak families. It was reported that during a two-month period in 1931, more than 3,000 children who succumbed to the harsh conditions were buried in the Vologda area.

Stalin’s dream was to use the vast army of slave laborers to work in the deep forests of the north to supply lumber for construction projects and to mine for the rich minerals buried above the Arctic Circle. The exiled families were to be divided into groups of 1,500 people and made to construct permanent settlements for themselves in the forest and mining areas. Their sentences would be indeterminate so they might be used for as long as it served the interests of the state. If in the process many died, the multifamily barracks in these settlements would simply be filled with the next group of slave laborers.

Violence was the main tool to maintain order. One of these exiles said, “Here they beat us horribly. . . . They beat us with revolvers while we slept. The commandant broke one man’s skull. . . . There is no defense from anyone. We will likely perish here.” Some attempted to escape; by 1933 the authorities estimated that several hundred thousand had tried. But most either didn’t make it through the frigid land or were recaptured and usually sent to a camp worse than the first one.

By the end of 1931 “the plan” for the design and construction of these settlements and the work to be done there had been drawn up to the smallest detail. But as Viola explains, “It represented an ‘imagined future’—laid out in endless plans, reports, memos, figures, tables, graphs, and budgets—superimposed on the present-day realities of the Soviet hinterlands. . . . Reality was vastly different—untidy, unmanaged, and shaped more by geographical, economic, and cultural realities than by Moscow ‘s seeming omnipotence.”

These “imagined” exile-populated settlements, which she reminds us were nothing more than “a shoddily constructed institution of forced labor,” were brought down by the nationwide government-caused famine of 1933–1934. Because of the failure of “the plan” and the shortage of food and materials, most of them were closed.

But the human cost was horrific. Out of the more than two million exiles sent to these areas, by 1934 only 973,000 had survived. Subtracting those who succeeded in escaping, close to 50 percent had died. Sometimes, however, there is a perverse justice in the world. Two of the leading party officials responsible for the planning and initial execution of this forced-labor system were themselves arrested during Stalin’s Great Purges and executed in 1937 as “enemies of the people.”

Most of the kulaks who survived were merely transferred to the larger and far more terrifying and lethal Gulag system of labor camps that stretched across the entire length of the Soviet Union and consumed tens of millions of lives during the nearly 75 years of the nightmare socialist experiment.

* * *

In Our Hands: A Plan to Replace the Welfare State

by Charles Murray

AEI Press • 2006 • 140 pages • $20.00

Reviewed by Michael Tanner

If, as Richard Weaver famously wrote, “ideas have consequences,” then Charles Murray is a truly consequential man. Only a handful of thinkers over the past quarter century have had as much impact on public policy. It was his 1984 classic, Losing Ground, that led to a bipartisan consensus about the failure of the Great Society welfare state. Now, ten years after the welfare reform that owes its existence to Murray ‘s ideas, he is back with a thought-provoking approach to government antipoverty policies.

Murray ‘s latest book, In Our Hands: A Plan to Replace the Welfare State, provides a blueprint for doing just that.

By Murray’s estimate, federal, state, and local governments spend roughly $522 billion per year on antipoverty programs, yet poverty rates have barely budged over the past 40 years. As he notes, “Only government could spend money so ineffectually.” His answer, therefore, is to take the money away from the government and give it directly to the people.

Murray would abolish all welfare programs. He would also terminate all other government transfer programs: Social Security, Medicare, and even agricultural price supports. In their place he would provide every American citizen with an annual grant of $10,000 to do with as he or she pleases. The grant would be untaxed for those earning less than $25,000 per year, thereby establishing a floor of national income, and entirely taxed back for high-income earners. There would be no work requirements or other restrictions. All Americans would get that check—but nothing else.

This, of course, wouldn’t actually abolish welfare. In fact, Murray’s proposal would initially be more expensive than current programs. Yet it would sweep away the vast edifice of the modern welfare state—not just the agencies and bureaucrats who administer the dozens of overlapping aid programs, but the rules, regulations, and restrictions that make the welfare state as much the overseer of the poor’s behavior as a dispenser of alms. At a time when big-government conservatives seek to use welfare as a weapon to micromanage the lives of the poor, this comes as a breath of fresh air.

For example, it is widely acknowledged that existing welfare laws act as a disincentive to family formation. Recipients are frequently penalized for marrying. Big-government conservatives would counteract this by creating federal programs to teach the poor about the benefits of marriage, or even bribe welfare mothers into marrying with the offer of additional benefits.

Murray ‘s plan avoids all this. Those who act responsibly, who marry, save for their retirement, purchase health insurance, and so on would be better off. Those who make irresponsible choices would be forced to fall back on private charity. Murray accepts the inevitability that modern societies will redistribute income, but doesn’t want them to run people’s lives.

Yet Murray ‘s proposal is undermined by one simple flaw. His plan would establish as both a legal and philosophical concept that every American citizen is entitled to a minimum income—exacted from the taxpayers. Once that “right” is established, the political process will inevitably expand it. Murray argues that $10,000 is the correct amount. But how long before some politician comes along and says, “No one can live on $10,000. We need to make it $11,000.” Soon another politician, not wanting to be thought less compassionate than the first, will propose $12,000. Look to the current debate over “a living wage” to see how this would work.

The book is not a casual read. It packs a great deal of information into a short space, and sometimes the numbers and programmatic interactions fly by in a blur. Murray can unexpectedly veer off to discuss subjects such as tort reform or expected future stock returns. These are topics that have consumed volumes in their own right. It is hard to do them justice in the few pages Murray devotes to them. Many of the details are designed to show that Murray has thought through all the implications of his proposal. This is a testament to his excellence as a scholar, and a treasure trove to policy wonks, but of marginal utility to the average reader.

Also, there’s a general assumption that the reader shares Murray’s view that the current welfare state is a failure. Consequently, the book is unlikely to persuade anyone who starts from a different premise.

Murray says he conceives of his proposal as a “thought experiment.” It fulfills the role brilliantly. His solution is dubious, but if Murray can once more get us to question traditional wisdom, he will have again proven how consequential ideas can be.

* * *

Actual Ethics

by James R. Otteson

Cambridge University Press • 2006 • 349 pages • $75.00 hardcover; $25.99 paperback

Reviewed by Tibor R. Machan

More and more books sympathetic to classical liberalism and libertarianism are coming on the market from publishers that haven’t offered such works until recently. Cambridge University Press has started to take on such works regularly.

This is important because in the contest of ideas, it matters where the ideas are published. It influences their use in classrooms, the promotion of the authors, and so forth, so when a certain line of thinking gains a forum at the more prestigious publishing houses, that can be identified as an advance. Thus James Otteson’s Actual Ethics is a triumph, and all those who value individual liberty should rejoice.

Having said this, I should also note a small quibble, namely, with the idea that classical liberalism and libertarianism are ethical rather than political stances. It is not new, of course, to believe this. Murray Rothbard and quite a few of those who discuss the constitution of a free society suggest that this is a matter of ethics proper, not only of political theory. Yet prominent classical liberals, such as Milton Friedman and F. A. Hayek, have held that no commitment to any kind of ethics is involved in championing the free society. (I myself have argued that there is but a minimal ethical substance in such a political position.) This is supported by the idea that ethics addresses the question of how we ought to live our lives, day in and out, while politics is about how human communities are best organized.

Otteson, who has been teaching philosophy at the University of Alabama but is moving to Yeshiva University, contends that ethics is directly relevant to the politics of classical liberalism. In his own words, he is advancing “the simple and . . . inspiring vision of free and independent individuals who take no and brook no violation of personhood, who thus meet each others as equals in personhood, and who seek to provide for themselves and for those they care about a good and happy life.” For him this is an ethical claim, not so much one concerned with politics or law.

Actual Ethics is a work with a unique approach, one that reminds me of John Hospers’s way of philosophizing—common-sense philosophy. Otteson says he is concerned with “how you should live,” yet the book is more often than not about how you should not live, as well as about the important notion that one needs to figure out for oneself the details of how one should live. For Otteson government’s purpose is “to secure people in their lives,” although this could imply a far more extensive role for law than Otteson supports—for example, universal health care. That is why the American Founders’ notion that government is about securing our rights (to life and so on) is, I believe, more precise. But I think Otteson agrees with that position.

Otteson’s achievement here is to make a persuasive case for classical liberalism based on the moral superiority of individual freedom and responsibility. With so much philosophy these days tending to support the expansion of the state, this book is a gust of fresh air.

Actual Ethics has a lot of provocative and well-executed discussion about all the problem areas that critics of the free society keep mentioning—welfare, health care, child care, poverty, education, and so forth. These are all dealt with in admirably accessible fashion, free of the kind of jargon that often mars philosophical discussions of human affairs. For example, Otteson considers various reasons for placing education in the hands of government and although his idea of inviolable personhood would render any kind of state schooling indefensible, he patiently examines most of the justifications and finds them wanting.

Each chapter ends with a long list of relevant publications that would be of great use to anyone wishing to develop some of the nuances of the questions that Otteson is exploring.

I would like to end this brief review by commending Otteson for invoking the ideas of the late Julian Simon, especially the extremely important notion that the greatest resource for making advances in our lives is the individual’s initiative, the creative mind. I would also like to take exception to Otteson’s calling me something of an anarchist. His list of those who are supposedly in the anarcho-capitalist school is debatable. But that debate will have to await another book. Actual Ethics has so much value to offer that this minor mistake can be set aside.

* * *

Black Americans and Organized Labor: A New History

by Paul Moreno

Louisiana State University Press • 2006 • 325 pages • $49.95

Reviewed by George C. Leef

Among the virtues of free markets is that they provide all who wish to compete the opportunity to do so. Free markets are not burdened by coercive interference that favors some groups and shuts others out. That is particularly beneficial for people who are of a religious sect, nationality, race, or other group that is widely disliked. Even if most people choose to discriminate against them, they can still succeed by working for or selling to those who don’t share the general prejudice, or at least who will put prejudice aside in favor of good-quality work.

On the other hand, where a market is subject to government regulation, unpopular groups are often excluded or handicapped. That is because dominant groups are able to exercise their political power to pass laws that stamp out competition from outsiders.

Black Americans have suffered a great deal from official discrimination in the labor market. For example, under the Jim Crow laws enacted in southern textile-producing states, it was illegal for a mill owner to employ black workers in better-paying positions. The job of loom fixer, among others, was by law a whites-only job. Many owners would have been glad to hire or promote people for that job just on the basis of work quality, but racist politics dictated otherwise.

Labor unions have long used both legal and illegal means to secure for their members higher pay than they would be able to get in a free market. In the early years of America, virtually every labor union admitted whites only. Racist sentiments teamed up with the desire for economic advantage to produce overwhelming hostility toward any blacks who had the temerity to try to compete. In his book Black Americans and Organized Labor, Hillsdale College history professor Paul Moreno gives a detailed account of the one-sided battle between blacks and unions. It’s a “warts and all” picture that reveals much about the ugly, coercive side of organized labor that is usually kept hidden from the public. Moreno quotes Samuel Gompers, who once ranted that “Caucasians are not going to let their standard of living be destroyed by Negroes, Chinamen, Japs, or any other.” The early civil-rights leader A. Philip Randolph clearly understood what the unions were all about when he said that the American Federation of Labor was “the most wicked machine for the propagation of race prejudices in the country.”

In the nineteenth and early twentieth centuries, violence was often used by white unionists against black workers and white-owned businesses that employed them. Moreno gives some revolting instances. What he labels “the bloodiest race riot in American history” took place in New York City in 1862 when white workers rioted against a tobacco-manufacturing company that had hired black workers. Hundreds were killed and injured before the riot was put down by army troops. Violence was illegal, of course, but the unionists were certain that they could get away with it.

One of the key themes in the book is that black workers and white business owners were allies against the attempts to cartelize the labor market by unions. In the post-Civil War South, Moreno writes, “industrialization could have undermined the region’s racial hierarchy, but segregation forced business to conform to it.. . . Railroad owners balked at enforcing racial segregation and fought the laws in court—joining Homer Plessy, for example, in challenging the requirement of separate accommodations in New Orleans streetcars.” Frequently businesses that chose to employ black workers were targeted by unions with violence.

Nor was racial animosity confined to the South. In Northern states unions used their power to ensure that skilled trades remained exclusive white preserves. One favorite tactic was to get occupational-licensing laws passed, and then to use their control over apprenticeship programs to keep anyone they didn’t like from learning the trade.

Eventually some unions began to soften their stance against blacks, a combination of receding racial hostility and self-interest. (The money of black union members was just as good as that of whites.) Political pressure was building for legislation to forbid racial discrimination by unions, and most union officials supported it, although there were some who opposed it and even declined to comply until forced to do so.

Unionists like to talk about what they call “labor’s bitter struggle”—which is their rhetoric for efforts at establishing legally protected cartels—but the really bitter struggle was that of black (and other minority) workers to be allowed to compete freely in the labor market. Paul Moreno’s book beautifully tells the story of that struggle but also makes a bigger point, namely that society must not allow interest groups to use the law as a sword to cut down competition from other people.

* * *

Cases of ridiculous occupational licensing regulations are a dime a dozen. One that I came across recently is illustrative. Due to the fact that the diet of horses today contains much less abrasive material than in the past, their teeth need to be filed down periodically. Without that service, called “floating,” it becomes painful for a horse to chew or hold a bit.

A veteran horse teeth “floater” in Minnesota has run into trouble with the State Board of Veterinarians, which informed him that he was doing work that fell within the legal purview of veterinarians and because he was not a licensed vet, he would have to stop. No customer of his had complained about his work, so what was the problem? The problem was that he charged only half as much as vets did for the same work. That was intolerable. The licensed vets of Minnesota saw an easy way to eliminate competition from this outsider by enforcing the law.

Is there any justification for occupational licensing statutes? The many professional organizations that promote such laws invariably claim that there are laudable public purposes behind them—primarily that they are needed to protect the public against incompetent practitioners. “All we care about is guaranteeing that those in the field have at least achieved the basic level of competence so consumers won’t be cheated,” they claim.

Should we accept that claim? Morris Kleiner, an economist who teaches at the University of Minnesota and is a visiting scholar in the economics department of the Minneapolis Federal Reserve Bank, takes a careful look at the issue in Licensing Occupations and comes to the conclusion that occupational licensing statutes do little or nothing to protect consumers, but do tend to raise the price of services. Kleiner writes, “[F]rom the evidence I was able to gather, there is no overall quality benefit (measured in a number of different ways) of licensing to consumers. Consequently, the cost of regulation to society is higher prices or longer waits for a service. An additional societal cost is the reallocation of income from consumers to practitioners of the licensed occupation as well as lost output.”

So once again we find that coercive interference with market processes creates benefits for a few that are outweighed by costs to the many.

Kleiner’s analysis involves comparing states that license certain occupations with others that don’t. For example, while most states require that practical and vocational nurses be licensed, several do not. If licensing actually raises practitioner quality, Kleiner reasons, then insurance rates for those nurses in nonlicensing states should be higher than in states with licensing to reflect their supposedly higher likelihood of making mistakes. Too bad for licensing advocates—Kleiner finds that insurance rates are no higher in states that don’t require licensure.

Kleiner also makes excellent analytical use of data from the neighboring states of Minnesota and Wisconsin. Wisconsin requires licensing for many occupations that Minnesota doesn’t. Many of the licensed occupations in Wisconsin are only subject to certification in Minnesota. From the data on complaints filed by consumers, Kleiner concludes, “At a minimum, licensed occupations showed no greater ability to reduce constituents’ complaints to licensing boards about the service provided compared to complaints filed in a regime where the same occupations were certified. . . .”

That is an important finding. Free-market advocates have long maintained that private certification—which allows practitioners to demonstrate competency by passing an examination, but does not prohibit noncertified individuals from offering their services (as long as they don’t falsely claim to be certified)—is preferable to licensing because it allows consumers to choose. If they think a certified practitioner best suits their needs, that option is available; if they don’t want to pay more for a certified professional or believe that a noncertified practitioner can do the work competently, they can make that choice. Certification is consistent with liberty whereas licensing statutes are authoritarian attacks on liberty.

Kleiner makes it clear that the impetus behind occupational licensing is overwhelmingly the desire by professionals to control entry into their field, not a dispassionate analysis by public officials that citizens would be best served if they were forced to choose between doing business with a licensed, state-approved practitioner and either getting no service at all or attempting a do-it-yourself job. Licensing Occupations pounds another nail into the coffin of the belief that labor-market regulations are wise policy choices.

Oh yes—the Minnesota “floating” case. It is currently before a state court, and the Institute for Justice attorney who represented the defendant says that the Veterinary Board is pulling out all the stops to show that the licensing statute is necessary and reasonable. I wish  someone would send the judge a copy of Professor Kleiner’s book.

This question from a former student named Blake addresses the interaction of two hot political issues: “I remember in class that raising minimum wage is a bad thing to do. My question to you is, since illegal immigrants don’t get paid minimum wage most of the time, does that aid in bringing down wages and creating a positive outcome for the economy?”

My answer was an uneasy yes and no. Any positive or negative outcomes are not for “the economy” as such, only for people. And the people in the economy are all of us, including the illegal immigrants. Illegal immigration may reduce the overall harm done by increases in the minimum wage, but better all around would be legal immigration and no minimum wage. Let’s sort the issues out to see why.

First, Blake is correct that “raising minimum wage is a bad thing to do” because it does most harm to the least-advantaged among us. The benefits of a higher minimum wage are much easier to perceive than the harms. The benefits go to all workers who keep their jobs when the minimum is raised (without losing enough hours’ work to decrease their incomes). They get a pay raise. These are the benefits that minimum-wage advocates focus on.

The harm done by the minimum wage is harder to perceive. The key to understanding it is the insight that nobody will pay an employee more than that employee’s value to the business, at least not for long. If you are the employer and you believe that a low-skilled young person contributes about $6 of value to your company every hour, you’ll be willing to pay that person up to $6 an hour. If an increase in the minimum wage then forces you to raise his pay to $7 an hour, you’ll lose a dollar an hour if you keep him on. You’ll have to lay him off.

Minimum-wage laws that force wages above the rates that would be freely negotiated in the market throw people out of work. This is a fundamental conclusion of economic reasoning, supported by the vast majority of scholarly studies of the minimum wage.

What kinds of workers, exactly, get thrown out of work? Suppose you employ a number of low-skilled young people at $5.15 an hour at your fast-food restaurant along with your higher-skilled managers. Some of these minimum-wage workers are more skilled, more responsible, or more experienced than others. Now suppose the minimum wage is raised to $7.25 an hour (as is being discussed in Congress as of this writing). Suppose you calculate that the higher wage rates you now must pay will make it unprofitable for you to keep your restaurant open during the same hours at the same prices. You’ll have to either raise prices or shut down at the least-busy times of day, or some combination of the two. Whatever course you take, you’ll reduce the number of hours’ work for your employees. If you raise prices, you won’t have as many customers, so you’ll need fewer workers to serve them. If you reduce your hours of operation, you won’t need your workers for as long.

Whose hours will you cut back? Those of the more-skilled, more-responsible, more-experienced workers? Probably not. You will cut back on the hours of, or perhaps lay off altogether, the least-skilled, least-responsible, least-experienced workers. Those who will have the hardest time getting another job, those who most urgently need the experience of an entry-level job, are the ones who get laid off.

Who else is harmed by the minimum wage? In our example, your managers and other more-skilled workers are also harmed by having their hours cut back. Unlike the least-skilled workers who have nowhere else to go when they lose their entry-level jobs, the more-skilled workers can find work elsewhere. But when they do, it will be at jobs that don’t pay quite so well or otherwise are not as attractive to them—or else they would have chosen to work there instead of at your restaurant in the first place. Thus these workers are hurt even if they keep the same number of work hours.

While some workers lose their jobs (or enough hours of work to reduce their total incomes), other workers get paid more. We can’t know which effect is greater without unknowable details about the lives and values of the different workers. But clearly the law harms the most disadvantaged—the very workers that minimum-wage advocates claim to want to help. This is the overlooked human tragedy of the minimum wage.

What about consumers (who are rarely considered in public commentary on the minimum wage)? Consumers who would like to eat at your restaurant during off-hours are harmed because now you are closed at those times. If you stay open the same hours but charge higher prices, consumers are hurt by the added expense. The output of your laid-off workers is denied them, and the output of the higher-skilled workers and managers driven into other work elsewhere is not worth as much to consumers as the lost output of your restaurant would have been—that’s why the wages paid in those alternative jobs are lower than at your restaurant.

Here is the clear harm done to “the economy”—the people in society—taken as a whole: Because of the legal minimum wage (or its increase) valuable productive resources are forced into idleness. In our example, lower-skilled workers, better-skilled managers, the restaurant, and its equipment are all idled (or, in the case of your managers, diverted to less-valuable production), even though workers, owners, and customers all would prefer that those resources be at work in your restaurant. Productive effort and mutually beneficial exchanges that would have occurred don’t occur. Society overall is poorer as a result.

Illegal Immigration’s Effects

How might illegal immigration reduce this harm?

Some immigrants, here illegally to begin with, are also willing to work for illegally low wages. When they do, they help produce goods and services that would otherwise go unproduced, or be produced only at greater cost. Their willingness to work for below-minimum wages thus reduces costs and increases output for consumers. This is probably what Blake had in mind when he referred to illegal immigration “bringing down wages and creating a positive outcome for the economy.” In our example, after the legal minimum wage is raised, you might be able to find illegal immigrants willing to work for less than the minimum. If so, you will be able to keep your prices down and/or stay open later in the evening. Your store, equipment, and workers would stay in productive use; consumers would benefit.

But not everything about this scenario is positive even if illegal immigration does keep actual wages and costs down closer to an appropriate, market-determined level. In certain cases it would be better still for “the economy”—for the people in the economy—to have certain illegal immigrants paid higher wages than they would receive while immigration is illegal.

Some illegal immigrants who would earn higher wages in a free labor market find themselves trapped in jobs that pay below minimum wage. Why? Because they are afraid that if they leave those jobs for others that pay more, they might be reported and thrown out of the country. This hurts consumers: it would be better to have those immigrants working at the higher-paying jobs instead, because the output of those jobs is more valuable to consumers. Let us imagine, for example, a talented carpenter who can find little work in his own country—let’s call him Juan. Suppose Juan sneaks across the border, or gets himself smuggled into the United States, to work as a manual laborer at a landscaping company for below minimum wage. Though it is not much to us, that wage is much higher than he can earn in his home country.

Now suppose that a local carpenter needs an assistant whom he would pay $15–20 an hour. Juan’s greatest value in the economy would then be to work as the carpenter’s assistant. This is clear because the local carpenter’s willingness to pay him $15 or more an hour shows that people in the community value at that amount the carpentry Juan might do each hour. For Juan’s manual labor, by contrast, people are willing to pay only $6 or $7 an hour. Juan is worth more in the economy as a carpenter.

Nevertheless, when immigration is illegal Juan might well choose to do the less-valuable work because he is afraid of being deported. Perhaps the man who smuggled him in has an agreement with the head of the landscaping company and Juan worries that if he moves to a better job the smuggler might report him. Or he might worry that working as a carpenter’s assistant would put him at risk of being turned in by other carpenters who would resent his competition. Or the state might require a license for carpenter’s assistants, for which only legal immigrants may apply.

For these kinds of reasons illegal immigrants often hold jobs in which their work is less valuable than elsewhere. All such cases represent a clear loss to society because even though the illegal immigrants’ willingness to work for below minimum wage keeps wages and costs down in the markets for lower-skilled labor, their talents are sadly wasted. They would be better used providing services that people in the community value more.

Reducing Production

Just as minimum-wage laws reduce society’s overall wealth by decreasing the production of valuable goods and services, so also do laws hindering immigration. Both interfere with the labor market’s essential function of directing human talent—what the late, great economist Julian Simon called “the ultimate resource”—to their most valued uses.

In answer to Blake, then, yes, it may be that illegal immigration helps to reduce the damage done by minimum-wage laws and minimum-wage increases. But no, it is incorrect to think that illegal immigration as such is beneficial for the economy. It is better than no immigration at all, but compared to free immigration, it is worse.

The problem with illegal immigration is not that it’s immigration, but that it’s illegal. The proper immigration policy for a free and prosperous nation is open borders—free immigration for all people who will live and work peacefully. Liberty, including liberty to move peacefully about the planet, cannot justly be infringed. It is a basic human right, and it promotes economic well-being.