There was an embarrassment of riches in today's Wall Street Journal — and one of which we could take full advantage. Usually there's just too much to address, but today our job was easier than usual . . . although, as you might expect from the shape of the world today, never actually easy. (If you feel like making our lives a tad easier, many volunteer positions are available in the Just Third Way, especially for writers and artists of all types who want some crazy ideas to set them off from the other crazy ideas.
The prize today was a labor lawyer who wrote an op-ed complaining that Boeing's move to a lower-wage area below Mason-Dixon was a virtual death-blow to the economic health of the United States. In a surprising statement for a labor lawyer, he claimed that the cost of labor is negligible in American-made marketable goods and services . . . suggesting that he's never looked at an income statement. The big thing, though, was that all those stupid people who work for less than $28/hour are undermining the economy and causing the trade deficit. We'll cover that claim and others like it when we get around to discussing Harold Moulton's Income and Economic Progress (1935). Until then, however, you might regale yourself with this letter that we sent off to the Wall Street Journal today:
In "Boeing's Threat to American Enterprise" (Wall Street Journal, 06/20/11, A15), Thomas Geoghegan makes some astonishing claims — not the least of which is that foreign creditors have not used low labor costs to their advantage. Has he ever heard of China?
The real problem, however, is that Mr. Geoghegan assumes that wages alone will deliver justice to America's workers. On the contrary, as the late labor statesman Walter Reuther pointed out in his testimony before the Joint Economic Committee of Congress on the President's Economic Report, February 20, 1967,
"If workers had definite assurance of equitable shares in the profits of the corporations that employ them, they would see less need to seek an equitable balance between their gains and soaring profits through augmented increases in basic wage rates. This would be a desirable result from the standpoint of stabilization policy because profit sharing does not increase costs. Since profits are a residual, after all costs have been met, and since their size is not determinable until after customers have paid the prices charged for the firm's products, profit sharing as such cannot be said to have any inflationary impact upon costs and prices."
The answer to America's decline in competitiveness is not to undermine industry further, but, as Louis Kelso and Mortimer Adler explained in The Capitalist Manifesto (1958), to spread out the benefits of capital ownership to everyone through access to the means of acquiring and possessing private property. As Pope Leo XIII declared in 1891, "We have seen that this great labor question cannot be solved save by assuming as a principle that private ownership must be held sacred and inviolable. The law, therefore, should favor ownership, and its policy should be to induce as many as possible of the people to become owners." (Rerum Novarum, § 46.) This was why Ronald Reagan called for "an Industrial Homestead Act" in 1974 — and why today's labor unions should transform themselves into ownership unions.