Excerpts from Economic Policy,
by Ludwig von Mises
(Page 9).
“The attacks against capitalism—
especially with respect to the higher wage rates—
start from the false assumption that wages are ultimately paid by people
who are different from those who are employed in the factories.
Now it is all right for economists and for students of
economic theories to distinguish between the worker
and the consumer and to make a distinction between them.
But the fact is that every consumer must,
in some way or other, earn the money he spends,
and the immense majority of the consumers
are precisely the same people who work as employees
in the enterprises that produced the things which they consume.
Wage rates under capitalism are not set by a class of people
different from the class of people who earn the wages;
they are the same people.
It is not a Hollywood film corporation that pays the wages of
a movie star; it is the people who pay admission to the movies.
And it is not the entrepreneur of a boxing match
who pays the enormous demands of the prize fighters;
it is the people who pay admission to the fight.
Through the distinction between the employer and the employee,
a distinction is drawn in economic theory,
but it is not a distinction in real life;
here, the employer
and employee ultimately are one and the
same person.
There are people in many countries who consider it very unjust
that a man who has to support a family with several children
will receive the same salary as a man who has only himself
to take care of.
But the question is not whether the employer
should bear greater responsibility for the size of the worker’s family.
The question we must ask in this case is:
Are you, as an individual,
prepared to pay more for something,
let us say, a loaf of bread,
if you are told that
the man who produced this loaf of bread has six children?
The honest man will certainly answer in the negative
and say,
‘In principle I would,
but in fact if it costs less
I would rather buy the bread
produced by the man without any children.’
The fact is that,
if the buyers do not
pay the employer enough to enable him to pay his workers,
it becomes impossible for the employer to remain in business.”
Economic Policy, Page 9.
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