Category: Economics

There is a minimum income needed to survive, to pay for necessities such as food, shelter, clothing and health care. To address this need, the United States created a minimum wage. However, this wage has not kept up with the cost of living and many Americans do not earn enough to support themselves. These people are known, appropriately enough, as the working poor. This raises an obvious moral and practical question: who should bear the cost of making up the difference between the minimum wage and a living wage? The two main options seem to either employers can pay employees enough to live on, or taxpayers will need to pick up the tab. Another alternative is to simply not make up for the difference and allow people to try to survive in desperate poverty. In regards to who currently makes up the difference, at least in Oregon, the answer was given in the University of Oregon’s report on “The High Cost of Low Wages in Oregon.”

According to the report, roughly a quarter of the workers in Oregon made no more than $12 per hour. Because of this, many workers qualify for public assistance, such as SNAP (better known as food stamps). Not surprisingly, many low-paid workers are employed by large, highly profitable corporations.

According to Raahi Reddy, a faculty member at the University of Oregon, “Basically state and taxpayers are helping these families subsidize their incomes because they get low wages working for the companies that they do.” As such, the answer is that the taxpayers are making up the difference between wages and living wages. Interestingly, Oregon is a leader in two categories: one is the percentage of workers on public support and the other is having among the lowest corporate tax rates. This suggests that the burden falls heavily on the workers who are not on public support (both in and outside of Oregon).

The authors of the report recommended shifting some burden from the taxpayers to the employers in the form of an increased minimum wage and paid sick leave for workers. Not surprisingly, increasing worker compensation is unpopular with corporations. After all, more for the workers means less for the executives and shareholders.

Assuming that workers should receive enough resources to survive, the moral concern is whether this cost should be shifted from the taxpayers to the employers or remain on the taxpayers.

One argument in favor of leaving the burden on the taxpayers is that it is not the moral responsibility of the corporations to pay a living wage. Their moral obligation is not to the workers but to the shareholders and this obligation is to maximize profits (presumably within the limits of the law).

One response is that businesses are part of civil society and this imposes certain moral obligations on all members of that society. These obligations include providing at least a living wage to full-time employees. It could argued that it is fairer that the employer pay a living wage than to expect the taxpayer to make up the difference. After all, the taxpayers are not profiting from the labor of the workers, so they would be subsidizing the profits of the employers by allowing them to pay workers less. Forcing the taxpayers to make up the difference is unjust and is robbing them to increase corporate profits.

It could be countered that requiring a living wage could destroy a company, thus putting the workers into a worse situation, that of being unemployed rather than underpaid. This is a legitimate concern, at least for businesses that would be unable to survive if they paid a living wage. However, this argument would not work for business, such as Walmart, that have robust profit margins. It might be claimed that there must be one standard for all businesses, be they a tiny bookstore that is barely staying open or a megacorporation that hands out millions in bonuses to top management. The obvious reply is that there are already different standards that apply to different businesses based on the differences between them and some of these are even reasonable and morally acceptable.

Another line of argumentation is to show that there is, in fact, no obligation to ensure citizens have a living income. In this case, employers would would have no obligation. The taxpayers would also not have any obligation, but they could elect lawmakers to pass laws authorizing that tax dollars be spent supporting the poor. That is, the taxpayers could chose to provide charity to the poor. This is not obligatory, but merely a nice thing to do. Some business could, of course, also choose to be nice, they could pay full-time workers at least a living wage. But this should, one might argue, be entirely a matter of choice.

Some folks would, of course, want to take this even further: if assisting other citizens to have a living income is a matter of choice and not an obligation, then tax dollars should not be used to assist those who make less than a living wage. Rather, this should be a matter of voluntary charity, and everyone should be free to decide where their money goes. Naturally, consistency would require that this principle of free choice be extended beyond just assisting the poor.  After all, free choice entails that people should decide as individuals whether to contribute to the salaries of members of the legislatures, to the cost of wars, to subsidies to corporations, to the CIA, to the FBI and so on. This does, obviously enough, have some appeal as the state would operate like a collection of charity recipients, getting whatever money people wished to contribute. The only major downside is that it would probably result in the collapse of civil society.

 

 

Back in 2018, President Trump proposed executing certain types of drug dealers as a solution to the opioid epidemic. As Trump remains Trump, it is likely he will make a similar proposal when he returns to the White House. But this does raise the issue of whether executing drug dealers is a good way to address drug addiction. Put crudely, can the United States kill its way out of this problem.

From a practical standpoint, a key question is whether executing drug dealers would reduce drug addiction in America. It will, of course, be assumed that the CEOs of pharmaceutical companies manufacturing and distributing opioids will not be executed. For those interested in a career in drug dealing, the best option is to get congress to legalize your dealing. The second best is to run your drug dealing as part of the legal business of your large corporation. This way you will probably never do any time no matter how much you do crime. At worst, you’ll be forced to pay a percentage of your profits in a negotiated settlement.

Intuitively, execution could impact addiction. As a great philosopher once said, “if you kill someone for doing something, they won’t do that again.” Killing drug dealers would reduce their numbers and could reduce the extent of drug addiction in America. This would require killing new dealers if they stepped in to replace the dead ones, but this is a practical problem in the logistics of killing.

There is also the deterrence factor. On the face of it, one might believe the threat of execution would deter people from dealing drugs. This assumes drug dealers are suitably rational actors, and their calculation of the risks and benefits will guide them to stop dealing. This would also assume that they have better options available. Alternatively, it could be argued that fear of execution would suffice to deter them. People do fear death and try to avoid it. As such, one could conclude that we could kill our way out of this problem. However, we do not need to rely on speculative arguments about how potential drug dealers might respond to threats of execution. We can look at the data about the effectiveness of the threat execution as a deterrent.

We have extensive data about the death penalty, thanks to America’s enthusiasm for killing people. The evidence is that it is not an effective deterrence, which runs contrary to what intuitions about death and threats of death would suggest. So, it seems unlikely that we can kill our way out of this problem. In addition to the practical issue of whether this approach would work, there is the moral question about its ethics.

On the face of it, the moral issue has been settled by the practical issue: if the death penalty would not deter drug dealers, then the deterrence argument does not morally justify executing them. However, the retribution argument remains: killing drug dealers could be morally justified as retribution for their crimes.

On the one hand, this does have some appeal. Drug use does result in some deaths, and some of the blame for some deaths can be placed drug dealers. If a business knowingly provides a dangerous product to customers, then they are morally accountable for at least some of the harms. This is true in the case of legal products, such as tobacco and prescription opioids, and especially true for products that are illegal because they are harmful, such as illegally trafficked opioids.

While drug dealers do deserve punishment for distributing harmful products (such as tainted drugs), the punishment must fit the principle of proportionality: the punishment must be warranted by the severity of the harm done in the crime.

A drug dealer that intentionally sold contaminated products that killed users would be directly responsible for those deaths. The same would apply to a company that knowingly sold fatally flawed legal products that killed people, such as defective cars. Obviously, the criminal could face legal consequences for their crimes, but from the moral perspective, the legality of the actions is not the primary concern. It would be causing death that matters morally. It would be these case that would most plausibly merit execution, on the principle that the punishment (death) should match the crime (causing death). However, selling someone a fatally defective product is morally distinct from directly killing them, such as by stabbing them to death. As such, executing those who knowingly sell defective products that could cause death would raise moral concerns.

Drug dealers probably do not intentionally sell defective products to kill their customers, if only because they want repeat business. But illegal drugs are often harmful, and this is morally relevant. The harms of illegal drugs can be numerous, ranging from health issues to death by overdose. Many legal products, such as alcohol and tobacco, are also harmful. As such, the question is whether it is morally acceptable to execute someone for providing a harmful product that can potentially kill the user. Once again, the legal issue is distinct from the moral—after all, all any drug could be legalized tomorrow, but this would not change the basic moral concern. The easy and obvious answer is that while knowingly selling harmful products is wrong, this level of wrongness does not merit execution. As such, killing drug dealers for dealing drugs would be no more ethical than killing the owners of Heineken or R.J. Reynolds for distributing legal products that cause significant health issues and contribute to the ruin of many lives.

While analogies, like cars, always break down eventually, they can be useful. While running, I thought about my injury-induced lack of racing trophies and my oxygen deprived brain tied this into the division of goods in capitalism. Hence, this analogy between running races and capitalism.

Both racing and capitalism involve competition, and this results in winners and losers. Winners are supposed to be rewarded while losers are expected to reflect on their defeat and try harder next time. When planning a road race or managing capitalism, those in charge must address the nature and division of the rewards. In the case of a road race, the race director must pick the prizes and decide such matters as whether there will be age group awards and how deep the awards will go. In the case of capitalism, those in charge decide how the rewards will be divided by laws, policies and practices.

While there are many ways to divide rewards, there are two broad approaches. One is a top-heavy reward system that yields the bulk of rewards to a few winners. In the case of a road race, this occurs when all the prizes go to the top three runners or even just the first-place finisher. In the case of capitalism, this will involve most of the rewards going to the very top winners with the few leftovers divided among the many losers.

Another approach is to spread the rewards more broadly among a larger base of winners. For example, many races divide up the groups by age and most races have male and female divisions. In the case of capitalism, such an approach would give less to the top winners and divide more among the other winners relative to approach that only rewards the top winners. For example, under such an approach successful small businesses and successful middle- and lower-class people would get more of the rewards. This would, of course, mean less for those at the top of the pyramid, such as the biggest corporations and billionaires. Success would still be rewarded, but there would be more effort in spreading the rewards across different levels of success (and economic classes).

One argument in favor of the top-heavy systems of capitalism is to contend that a broader division of the rewards would be socialism, and this would destroy competition. But this is not the case. A broader reward system would still be capitalism, it would just have a broader division of the rewards. Returning to the race analogy, a race that has a broader division of prizes is no less a race than one that offers prizes only to the first-place finisher. Competition remains, the difference is that there will be more winners and fewer losers.

It could be argued that having a broader division of rewards would reduce competition and somehow make things worse. In the case of a race, it might be claimed that runners would think “why should I train hard to win the whole race when I can get a prize for being third in my age group?” In the case of capitalism, people would presumably say “why should I work hard to try to be the biggest winner when I can get decent rewards for just being successful?”

While I will not claim that no one thinks that way, most runners still train hard and race hard regardless of what sort of division of prizes the race offers. The same would seem to hold true of capitalism. People would still work hard and compete even when there was no massive prize for a few and little for everyone else. In fact, people who know they have little or no chance at the biggest prize would presumably compete somewhat harder if they knew that they had at least some chance of getting a decent return on their success. Also, in the case of capitalism, people already work hard for small prizes when they know they have no chance of ever getting the biggest prize or even a bigger reward. As such, unless they are delusional or irrational, they are not motivated by having a top-heavy reward system. Survival provides adequate motivation for those of us who are not in the top .1%

At this point, one might bring participation awards, when everyone gets a medal for showing up. The economic analogy would be a form of socialism or communism in which everyone gets the same reward regardless of effort. This, many would argue, would be terrible and unfair.

In the case of races, runners still compete even if everyone gets the same prize (be it the same medal or nothing at all). Many people just love to compete for the sake of competition or race for reasons that have nothing to do with prizes. It would hardly be a stretch to think that this view also extends into the economic realm. There are people, such as open-source developers and community volunteers, who work hard for no financial rewards. But there is certainly a reasonable case that people need to win prizes to be really motivated to do anything.

I must admit that while I will still run hard in a race that has no prizes, I do love competing for them and prefer races that offer competition-based rewards. I am tolerant of participation medals because someone who runs a race has accomplished something meaningful. A race can have both participation medals and prizes for winning. In the case of an economy, this would be a competitive system that offered better rewards to the winners, but also provided those who are actively participating in the economy with at least a minimal reward. One area in which this analogy breaks down is that the economy has people who cannot participate (the very old, the very young, the ill and so on) and it would be a much more serious matter for these people to get nothing than it is for people who do not finish the race to not get their participation medals.