Montreal, February 15, 2010 • No 275

 

Vincent Geloso has a diploma in economics and politics from Montreal University and is currently studying at the London School of Economics and Political Science for a M. sc in economic history.
 

 

 OPINION

Eugenics and the minimum wage
 

by Vincent Geloso
 

          Libertarian and Conservative economists like George Mason University's Thomas Sowell have long argued that a high minimum wage and heavy labour regulations exclude unskilled workers from the labour market, thus denying them access to jobs in which they could learn the skills and earn the experience that would justify a wage increase. Often presented today as a tool for poverty reduction and income redistribution, the minimum wage is believed to be an efficient and moral social policy. However, during the late 19th and early 20th centuries, proponents of the minimum wage actually desired the negative effects described above. The Eugenics movement sought the improvement of mankind by strong government intervention to isolate and exclude the weakest so as to improve the gene pool.

 

          The publication of Darwin's On the Origin of Species revolutionized more than just the natural sciences; it also started a radical revolution in the world of economics. Alfred Russell Wallace, an opponent of eugenics, postulated that the natural selection process was not at work in human civilization. For Wallace, any human being feels sympathy for the destitute and will try to help them in a variety of ways. As Adam Smith puts it in his Theory of Moral Sentiments, "[I]f by some extraordinary misfortune you are fallen into poverty, into diseases, into disgrace and disappointment […] you may generally depend upon the sincerest sympathy of all your friends."

Survival of the Unfit

          However, this sympathy seemed like a gigantic problem to Francis Galton. In his view, it meant that the weakest and the unfit would endure and breed with other human beings and thus promote genetic regression. In fact, the very word "regression" that we now use in econometrics was coined by Galton, who argued that the height of a group of tall individuals would regress toward the mean as time goes by.

          Galton mostly favoured policies that would allow the "multiplication of the best variants" and he seldom talked about eliminating lesser elements. However, eugenics spread among economists. In a completely free market, immigration would become a factor of great importance since migrant populations would move about frequently and mix with their host societies. Migration between Nordic countries was acceptable, but there were other countries with populations that were considered of a lesser quality. Among them were the Irish and the Italians, who were considered lazy, stupid, or mentally unstable. As for the black man, he was, according to the famous economist Stanley Jevons, a being "of lower race" who "enjoys possession less, and loathes labour more." If lesser populations blended with "purer" populations, they would erode the strength of the nation. This brought opposition from some economists, notably John Commons in the United States, who strongly opposed immigration.

          Also of worry for eugenicists in economics was the economic progress witnessed during the Industrial Revolution. An increasing quality of life rendered possible by higher real wages, declining prices of essentials goods, and better public health increased the odds of survival for the unfit and the parasites. A higher chance of survival for the unfit would, according to Alfred Marshall, degrade a population's genetic makeup. By the first decade of the 20th century, Marshall, Jevons, and Commons were joined by Irving Fisher, Arthur Pigou, and Herbert Croly from The New Republic. Subsequent trends within the eugenics movement rejected Galton's policy recommendation of just promoting the best variants within the human race and embraced a policy of actually excluding the worst elements.
 

"Since World War II, with the horrors of Nazi Germany, eugenics has completely disappeared from the mainstream academic community. Academic papers like the Journal of Eugenics, Eugenics Review, and Applied Eugenics have disappeared, and the Eugenics Society is less than a shadow of its former self. However, some of the policies they proposed, like the minimum wage, remain alive today."


          Also implicated were several founders of the London School of Economics and Political Science, including socialists George Bernard Shaw, Beatrice Webb, and her husband Sydney Webb. The latter once said that "twenty-five percent of our parents […] is producing 50 percent of the next generation. This can hardly result in anything but national deterioration; or, as an alternative, in this country gradually falling to the Irish and the Jews." For him and for others, it was necessary to reduce the fertility rate of "lesser" populations while increasing the fertility rate of their betters.

          This included US Supreme Court Justice Oliver Wendell Holmes, who upheld a statute of sterilization of the "mentally feeble" by the state of Virginia in his infamous Buck V. Bell ruling. However, reducing their fertility rate was apparently not sufficient. In his judgment, Holmes stipulated that the reasoning behind the reduction of the fertility rate through sterilization "fails when it is confined to the small numbers who are in the institutions named and is not applied to the multitudes outside." Thus there was a need for more aggressive policy to reduce the chances of survival of the feeble.
 

Raising the (Colour) Bar

          Sydney Webb defined the part of the population that he saw as "problematic" as the "unemployables" and said that the capping of work hours and the minimum wage would have the social benefit of eliminating these so-called unemployables. Contrary to Marshall and Pigou, Webb actually saw disemployment as the desired effect of the minimum wage. The idea was that a high minimum wage would shield the "deserving" workers from competition by the unfit by making it illegal to work for less than a certain amount. If wage-determination was left to the market, the unfit would be able to find work, even if badly paid. Even if they were considered incapable of outdoing their superiors, they were capable of "under-living" them because of a biological predisposition.

          In the United States, this was especially aimed at the black community for fear that they would be able to replace existing workers at lower prices and thus receive wages on which they could subsist. Irishmen, Asians, and Italians were also among the "unemployables" in the United States. In the United Kingdom, the Irish were the main target, especially of Sydney Webb.

          So even if there was a social cost to the minimum wage through less employment and lower output, it was outweighed, as the former president of the Association of American Economists A. B Wolfe said, by the elimination of those "who are a burden on society." A similar logic applied to the capping of work hours, the Immigration Restriction Act (which increased quotas for "race importation") of 1924 under President Coolidge that was advocated by Irving Fisher, and the regulation of working conditions. It always came back to the necessity of excluding certain population groups so they would not lower the genetic makeup of a community and foster its decadence and destruction.

          Since World War II, with the horrors of Nazi Germany, eugenics has completely disappeared from the mainstream academic community. Academic papers like the Journal of Eugenics, Eugenics Review, and Applied Eugenics have disappeared, and the Eugenics Society is less than a shadow of its former self. However, some of the policies they proposed, like the minimum wage, remain alive today. The minimum wage is today presented as a tool for providing anyone with a decent wage, regardless of racial origin, and its level is always calculated by government officials so as to produce the least possible distortion of employment. Still, when analyzing ideas, it is worth remembering who first bandied them about, and their reasons for doing so.

 

References

• Commons, John. 1916. Races and Immigration in America. New York: MacMillan.
• Galton, Francis. 1886. "Regression Towards Mediocrity in Hereditary Stature." Journal of the Anthropological Institute of Great Britain and Ireland. 15: 246-263. Galton, Francis. 1904. "Eugenics, its definitions and scope." Journal of American Sociology. 10-1: 1-6. Leonard, Thomas. 2005. "Eugenics and Economics in the Progressive Era" Journal of Economic Perspectives. 19-4: 207-224. Levy, David M and Sandra J. Peart. 2008. " The Secret History of the Dismal Science : Eugenics and the Amoralization of Economics ". In David Henderson, dir., Concise Encyclopιdia of Economics. Online (page consulted on the 18th of November 2009). Marshall, Alfred. [1890] 1930. Principles of Economics : 8th edition. London: Macmillan
• Smith, Adam. [1759] 2008. The Theory of Moral Sentiments. Online.
• Smith, Adam. [1776] 2008. An inquiry into the nature and causes of the wealth of nations. Online (page consulted on November 19th 2009).
• Sowell, Thomas. 2004. Applied Economics: Thinking beyond stage one. New York: Basic Books.
• United States of America. Supreme Court. Buck V. Bell : Opinion of the Court. No 292 - 143 Va. 310. Washington D.C.: United States Supreme Court, 1927. Cornell University Law Faculty. Unknown date of posting. Accessed on January 9th 2010 Webb, Sydney. 1910. "Eugenics and the Poor Law: The Minority". The Eugenics Review. 2-3: 233-241.