Monthly Archives: January 2013

Jacque Lipchitz noted that “Cubism is like standing at a certain point on a mountain and looking around. If you go higher, things will look different; if you go lower, again they will look different. It is a point of view.”

Youth unemployment is an excellent example of how government regulations are but a point of view on this grand mountain of Economica. In the West we take pride in our minimum wage laws. We read chilling stories of boys in Bihar laboring for less than a dollar a day. We feel our system, our democracy – unequal as it may be – vindicated by the guarantee that our sons and daughters are paid a fair share for their hard work.

However, as we traverse that mountain we see that the very institutions protecting our youth are tearing society at the seams. There are effectively two ways to decrease unemployment: by encouraging employers to hire more workers (through stimulus, economic growth, etc.) or by decreasing the size of our labor force.

For the economy as a whole, the latter is undesirable. It might signal an increase in discouraged workers as has been noticed on both sides of the Atlantic over the past few years. It might signal a workforce that is unskilled in the context of modern demands. It might signal, especially scary for conservatives, a workforce simply unwilling to work. In a purely neoclassical model, a contraction in labor supply would also result in cost-push inflation. However, in the context of youth unemployment, a smaller workforce might be a good sign.

It means that more of our youth are investing in their future by going to college. It might mean that fewer students feel the economic pressure to work, fulfilling extracurricular pursuits such as sport and family-time, both activities any modern and wealthy economy ought to encourage.

Therefore the first way to decrease youth unemployment is to contract the labor force in a beneficial way – incentivize college education and ensure that families are able to make end’s meet without forcing children to work.

This still leaves a pretty big hole left to be filled. What about young students uninterested in pursuing further education? What about the many that want to work at Carrefour for the plain pleasure of it? This is where our perspective ought to change vis-a-vis minimum wage.

While implemented with noble intentions, preventing the economic reality of wage depression in a relentlessly free market, the minimum wage is one of the key culprits of youth unemployment. It is no accident that in Western countries teenage unemployment is almost twice as high as general unemployment; no accident that, historically, increases in minimum wage result in a sharp increase in youth, and not general, unemployment.

The reality is that the marginal revenue product of labor from hiring a young student is less than that of hiring a seasoned worker (even if unskilled). Our youth are more distractible with other commitments, some more important like a secondary education and others less so like drinking at the pub with friends. While the minimum wage might prevent income depression for the general workforce, compelling employers to pay at a rate of five pounds rather than four-and-a-half, it will most certainly not make up for the difference between what hiring a youth is worth and what it actually costs.

As Milton Friedman said, employers are not in the business of charity. Minimum wages, merited as they might be, are one of the most regressive laws when it comes to youth unemployment. The beneficiaries of such a law are more likely the children of the educated class who are more likely to present themselves in an employable manner in terms of dress, vocabulary, and overall disposition. They are also more likely to have direct contacts for employment, even for relatively unskilled jobs.

Youth unemployment has corrosive social effects. Unemployment results in youth with nothing better to do taking to the streets, resulting in crime either for money or out of boredom. Youth unemployment also results in a more contracted general labor force in the future. As young citizens who need employment are left to rot, they stand far more vulnerable to becoming discouraged in the future and hence becoming entirely unemployable, resulting in increased government entitlement outlays and a decreased national income.

Again, it’s not important that youth employment in the absolute be increased. By removing the minimum wage laws for young citizens it is likely that a few who do not need the extra money or want the reduced wages spend more time with their family or studying. The marginal value of an educated student in the aggregate results in a more robust economy, more ready for the skilled jobs necessary in the coming century.

We need to abandon the myth that minimum wage laws prevent exploitation of children. Today, with the information revolution abuse of young workers will take to the social media in a matter of minutes, destroying the name of any employer who dare pay less than competitive wages. On the other hand we need to make it as easy as possible to hire youth – perhaps offer employers tax credits per hire, decreased red-tape, and a sharp decrease in any tax regulation that would make employers unwilling to hire.

Proposals that suggest we need to train our youth miss the fundamental point that most of our youth need unskilled jobs. We’re not talking about the next mathematicians. The relentless free- market certainly ought to be regulated and protected, as is done in OEDC countries today, but not in a way that it cripples that whom it claims to protect.

Even as a fierce liberal I stand that minimum wage laws are among the most regressive and anti-poor legislation. Let’s move around the mountain and realize that the orthodoxy of regulation and protection will be its own undoing, let’s protect liberalism from itself. 

Though it fails to answer its titular question, “what’s the right thing to do”, Michael Sandel’s Justice is a highly worthwhile read. Sandel illustrates questions of moral agency with rich examples relevant to anyone who reads a newspaper. Ultimately, however, its success comes from an eminently accessible read that will enlighten all but the most educated not from presenting a novel way of thought, as suggested by some reviewers.

In a time of rife unrest about the so-called “one percent”, Sandel offers a book for the rest of us. He makes accessible ideas otherwise locked to students of expensive courses or to those with the time to actually understand dense translations of Aristotle’s Greek. Sandel’s ability to make his both book readable and relevant speaks volumes about his role as a modern day political theorist.

Though we learn of his neo-Aristotelian sympathies late in the book, his description of Kantian and Rawlsian  philosophies are hardly biased, offering an unobscured snapshot of their respective theories of justice.

The most irritating flaw was the very cursory consideration of the “trolley problem”, introduced in his discussion of utilitarianism. While Sandel gives a detailed explanation of this age-old puzzle, as well as a historical parallel in R v Dudley and Stephens the resulting discussion is rather staid, predictable, and lacks the animation found in his lectures.

Well, obviously we find it harder to push the fat man off a bridge – but Sandel leaves the question as a simple check on Bentham’s utilitarianism rather than a powerful question of ethical agency that is relevant in almost every political and legal discussion. While this beautiful puzzle is an excellent way to catch the mind of an uninterested reader, Sandel does not do justice to the rest of his book by considering this question as a teaser rather than as a culminating feature of the book, as it ought to have been.

I also found his discussion of Kantian and Rawlsian flaws to be rather vague. While it would be nearly-impossible to address completely every flaw of a political theory in a book as accessible as Justice, there was a glaring flaw in each theory which I sorely wish Sandel mentioned. I am sure I am not the only one.

When Sandel noted Kant’s dislike of sex outside of marriage, prostitutes, etc. as such unholy institutions undermined our autonomy, representing base instincts rather than a higher purpose, I couldn’t help but wonder, who decides that which is ‘higher purpose’. Kant seems to give us a few vague tools to gauge our autonomy (i.e. would we give to charity even if ripped of all human emotion?) but nothing worthwhile. I feel I am doing great disservice to a thinker like Kant, but I can hardly help but wonder if he was just another man that preached what he considered to be morally virtuous and defended it with contrived reason to maintain an illusion of secularism.

I liked Rawls much more, but I wish Sandel had spent more time discussing the “veil of ignorance”. My greatest qualm – one I am sure many share – is its impossible nature. Rawls wants those who craft the world, behind this veil, to be devoid of any human emotion (such as a predilection for risk), any knowledge of race, sex, sexuality, etc. Yet, by virtue of having the gift of thought (as someone crafting our world ought to have), by virtue of having the ability to philosophize about tax laws, about regulations one must have an opinion. One must have a bias. Even in the hypothetical world so romantic to political philosophers, I find it unbelievable to conceive a so called veil of ignorance that has un-opinionated men, entirely clueless of their station in life, someone able to create law and institute a government. I am sure Rawlsian thinkers would beg to differ, but I would have at least liked a greater discussion of this point.

Towards the end, it becomes clear that Sandel is racing towards Aristotle, who dominates the last one hundred pages. By virtue of length, Sandel provides a great glimpse into both the triumphs as well as flaws of Aristotelian thinking. He does an excellent job of advocating for what seems like a limiting and highly moralistic ideology. I was left wondering, however, who determines the purpose of an object? The maker? The patrons? The market? Ultimately it seems Aristotelian thinking, through the lens in which it is viewed, can be used to defend each of the previously studied philosophers. Its versatility makes it strong, but fails, then, to answer the guiding question “what’s the right thing to do?”

While the absence of eastern philosophers seems to be a common thread of complaint among reviewers of philosophy books, I thought Justice was already somewhat overambitious in its mission. However, in a failed attempt to answer so grand a question, Sandel provides a solid and entertaining journey through moral philosophy.

It would be very difficult to find a better way to spend the three to four hours required to read this rich if not riveting book.