Vernon Smith

Scholars seek to reclaim the term “liberal” from governmentalists

laissez-faire

There is a push in libertarian circles to reclaim the term “liberal,” a word that once represented a hands off approach to government, from those who advocate for the “governmentalization of social affairs.”

Through Liberalism Unrelinquished, an effort spearheaded by Kevin Frei, a number of scholars are declaring that they will not surrender use of “liberal” to describe their views. The organizers of the statement hope to attract 500 or more signers.

The statement explains that “liberal” once represented the views of Enlightenment era, perhaps best identified through the work of Adam Smith, an 18th Century moral philosopher and the father of modern economics.

Smith laid the foundation for the moral case for capitalism in The Theory of Moral Sentiments (1759) and The Wealth of Nations (1776). The statement also points to Richard Cobden, William Gladstone, and John Bright — 19th Century British liberals who advanced laissez-faire economic views.

The American founders enshrined the liberal concepts of the Enlightenment era into the Declaration of Independence and, later, the United States Constitution.

“Especially from 1880 there began an undoing of the meaning of the central terms, among them the word liberal,” the statement reads. “The tendency of the trends of the past 130 years has been toward the governmentalization of social affairs. The tendency exploded during the First World War, the Interwar Years, and the Second World War.”

Economists speak out against minimum wage increase

More than 500 economists, including three Nobel laureates, have signed a letter warning lawmakers of the “serious consequences” of raising the federal minimum wage to $10.10 an hour, a policy being pushed by President Barack Obama and most congressional Democrats.

“One of the serious consequences of raising the minimum wage is that business owners saddled with a higher cost of labor will need to cut costs, or pass the increase to their consumers in order to make ends meet,” the letter states (PDF). “Many of the businesses that pay their workers minimum wage operate on extremely tight profit margins, with any increase in the cost of labor threatening this delicate balance.”

The economists point to the recent Congressional Budget Office (CBO) report on the $10.10 minimum wage proposal. The CBO estimated that such a significant increase in the minimum wage would cost the economy 500,000 jobs, perhaps as many as 1 million, over the next two years. “Many of these jobs,” the letter notes, “are held by entry-level workers with limited experience or vocational skills, the very employees meant to be helped.”

The economists explain that the minimum wage is “a poorly targeted anti-poverty measure,” noting that [e]xtra earnings generated by such an increase in the minimum wage would not substantially help the poor,” again pointing to the findings of the CBO report.


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