A Quote by Frederic Bastiat
The creation of new capital always... releases... labor. Its actual effect [though] is not to make jobs scarce, but to free men's labor for other jobs.
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The first Friday of every month is what we call Numbers Day - it's the day that the Bureau of Labor Statistics releases the monthly jobs report. We have a ritual at the Labor Department - at 8 A.M., we gather around a table in my office, and the commissioner of labor statistics briefs me and the department's senior leadership on the numbers.
Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.
Capital is a result of labor, and is used by labor to assist it in further production. Labor is the active and initial force, and labor is therefore the employer of capital.
Technology has no function except to save labor. Yet how often do we hear that the purpose of new capital formation is to create jobs?
When the press writes scare stories about the global labor supply draining jobs from rich to poor places, the story is usually presented as a "race to the bottom" simply in terms of wages. Capitalism supposedly looks for labor wherever labor is cheapest. This story is half wrong. A kind of cultural selection is also at work, so that jobs leave high-wage countries like the United States and Germany, but migrate to low-wage economies with skilled, sometimes overqualified workers.
Nothing increases the number of jobs so rapidly as labor-saving machinery, because it releases wants theretofore unknown, by permitting leisure.
Unfortunately, the real minimum wage is always zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage, because they lose their jobs or fail to find jobs when they enter the labor force. Making it illegal to pay less than a given amount does not make a worker’s productivity worth that amount—and, if it is not, that worker is unlikely to be employed.
We are coming to see that there should be no stifling of labor by capital, or of capital by labor; and also that there should be no stifling of labor by labor, or of capital by capital.
It is not competition, but monopoly, that deprives labor of its product. Destroy the banking monopoly, establish freedom in finance, and down will go interest on money through the beneficent influence of competition. Capital will be set free, business will flourish, new enterprises will start, labor will be in demand, and gradually the wages of labor will rise to a level with its product.
Private sector labor market flows provide additional indications of the strength of the labor market. For example, the quits rate has tended to be pro-cyclical, since more workers voluntarily quit their jobs when they are more confident about their ability to find new ones and when firms are competing more actively for new hires.
Each needs the other: capital cannot do without labor, nor labor without capital.
One finds fortunes built on slave labor, indentured labor, prison labor, immigrant labor, female labor, child labor, and scab labor - backed by the lethal force of gun thugs and militia. 'Old money' is often little more than dirty money laundered by several generations of possession.
Labor, being itself a commodity, is measured as such by the labor time needed to produce the labor-commodity. And what is needed to produce this labor-commodity? Just enough labor time to produce the objects indispensable to the constant maintenance of labor, that is, to keep the worker alive and in a condition to propagate his race. The natural price of labor is no other than the wage minimum.
Labor in this country is independent and proud. It has not to ask the patronage of capital, but capital solicits the aid of labor.
A demand for commodities is not a demand for labor. The demand for labor is determined by the amount of capital directly devoted to the remuneration of labor: the demand for commodities simply determines in what direction labor shall be employed.
Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior ofcapital, and deserves muchthe higher consideration.
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