Economic Barriers

Turgot would abolish the jurandes—guilds—which monopolized various trades. Like modern labor unions, they enforced barriers to entry for the enrichment of members. Consequently, there were few skilled workers, and they concentrated on making luxury goods. Turgot would permit anyone, including foreigners, to enter any trade except barbering and wig-making ... The Parlement supported guilds because ... guilds were a lucrative source of litigation. One notorious case between the guild of tailors and the guild of used-clothes dealers had dragged on for more than 250 years.

The word "protectionism" is usually restricted to business-supported barriers to cheap imports. But the term has far wider applications. Business interests have long favored all kinds of regulations and taxes to hamper existing and potential competition ... Older and bigger firms can more easily contend with such burdens than newer, smaller, or not-yet-founded ones. IBM and AT&T; have bigger legal and accounting departments than a nascent garage operation. Many ideas for new businesses never get off the ground because the regulatory and tax barriers cripple them.

[It] may be difficult to ascertain what a given worker's contribution is, so it's possible that he or she might be paid less than is economically justified. But none of that supports a government mandate. The only way to maximize the market's tendency to accurately reward people for their productivity is to remove all government barriers to competition and self-employment. This includes occupational licensing, land-use restrictions, permitting, intellectual property, and more. Alternatives, not political machinations, are what maximize workers' clout and ensure their just reward.

Self-interest and the competitive marketplace will tend to remove obstacles to talent and competence. But the marketplace must be kept free of government interference. That is not usually the case ... By making unskilled (mostly minority) labor artificially expensive, [mininum-wage law] assures that employers won't be tempted to use it in place of skilled union workers. Other regulation of the labor market, such as licensing laws, have similar intentions and effects. Sometimes governments explicitly restrict the economic activities of targeted groups, such as blacks.

Apparently $7.25 is the market rate for much low-skilled labor. But the market is not free. By that I mean the U.S. economy is riddled with deep institutional barriers to advancement for many people, beginning with the government's own schools, which for low-income people are notoriously bad; they handicap kids for life. Then there are the myriad barriers to self-employment and neighborhood enterprises: occupational licensing; land-use rules like zoning; regulations and taxes, which increase the cost of starting and running a business; intellectual property, which threatens imitators with lawsuits; and more.

The surest way to eliminate wage discrimination is to keep government from impeding the competitive process with such devices as occupational licensing, permits, minimum product standards, so-called intellectual property, zoning, and other land-use restrictions. All government barriers to self-employment—and these can take implicit forms, such as patents and raising the cost of living through inflation, or burdening entrepreneurs with protectionist regulation—make workers vulnerable to exploitation.

Political-economic systems throughout the world ... are in fact built on deeply rooted and long-established systems of privilege. Favors, which the rest of us must pay for one way or another, typically go to the well-connected ... [P]olitical-economic inequality is unjust and should be eliminated. How? By abolishing all direct and indirect subsidies; artificial scarcities ... These interventions and more protect incumbent firms from conditions that would lower prices to consumers, create self-employment and worker-ownership opportunities, and improve bargaining conditions for wage labor.

Question: would you rather have money in your pocket as a consumer or in the Treasury as a taxpayer? ... [T]ariffs are sought by domestic companies that would like to charge higher-than-market prices but can't because foreign competitors won't let them. The tariff forces those competitors to raise their prices to cover the tax, making the domestic company's price more attractive. Now consumers must pay higher prices than they would have without the tariff. In other words, the beneficiary of the tariff gets something he can't get in peaceful voluntary exchange.