The Freeman 1971

Freemanthe VOL. 21, NO.1. JANUARY 1971 The Feminine Mistake: The Economics of Women's Liberation Gary North 3 To price themselves out of the market is scarcely an appropriate step toward women's liberation. How to Be a Benefactor Leonard E. Read 15 Self-responsibility well may be the ultimate of social responsibility. The Woes of the Underdeveloped Nations Erik von Kuehnelt-Leddihn 21 The aggravating gap between living standards in various nations poses a dilemma for proponents of Christian charity. The Creative Thrust of Capitalism Merryle Stanley Rukeyser 33 Concerning the importance of saving and investment and freedom in developing nations. Throttling the Railroads (Conclusion): 9. The Future of the Railroads Clarence B. Carson 39 If the railroads and their customers are to survive, it's time to stop government intervention and try freedom. Cost-Plus Pricing Paul L. Poirot 48 When demand is the only consideration, regardless of supply. The Protesters W. A. Paton 51 A call for maturity in the attitude and behavior of parents. Book Reviews: 60 "Envy" by Helmut Schoeck "Youth, University, and Democracy" by Gottfried Dietze Anyone wishing to communicate with authors may send first·class mail in care of THE FREEMAN for forwarding. Freemanthe A MONTHLY JOURNAL OF IDEAS ON LIBERTY IRVINGTON-ON-HUDSON. N. Y. 10533 TEL.: (914) 591-7230 LEONARD E. READ President, Foundation for Economic Education PAUL L. POIROT Managing Editor THE FREE MAN is published monthly by the Foundation for Economic Education, Inc., a non political, nonprofit, educational champion of private property, the free market, the profit and loss system, and linlited government. Any interested person may receive its publications for the asking. The costs of Foundation projects and services, including THE FREEMAN, are met through voluntary donations. Total expenses average $12.00 a year per person on the mailing list. Donations are in vited in any amount-$5.00 to $10,000-as the means of maintaining and extending the Foundation's work. Copyright, 1971, The Foundation for Economic Education, Inc. Printed in U.S.A. Additional copies, postpaid, to one address: Single copy, 50 cents; 3 for $1.00; 10 for $2.50; 25 or more, 20 cents each. Articles from this journal are abstracted and indexed in Historical Abstracts and/or America: History and Life. THE FREEMAN also Is available on microfilm, Xerox University Microfilms, Ann Arbor, MIch igan 48106. Permission granted to reprint any article from this issue, with appropriate credit. GARY NORTH The Feminine Mistake I FIRST READ about the Women's By focusing attention on the Liberation Fro'nt in the spring of very real fact of differential pay 1969 in a copy of New York, a scales between men and women, new magazine devoted to the cru WLF activists have gained a cial problem of how to survive in wider audience than might other New York City. That description wise have been likely. Here, it of WLF opened with an account would seem, is a legitimate com of a young heiress demonstrating plaint against the supposed in karate as one' of the basic skills equities of the capitalist system. needed for her survival. At the Here is where "male chauvinism" time I was inclined to dismiss the makes itself felt: pure discrimi WLF·· as just another of the freak nation that is in no way related to ish movements that seem to flour one's personal capacities or per ish in alienated urban cultures, formance. This argument cannot or in the educated segments there be dismissed with a'shout of "You of. But in recent months I have look like last year's sneakers, come to the conclusion that the sister !" WLF is important, and that it is The reason the WLF has been dangerous. Not because of the able to gain a hearing on the "crazies" on the fringe - who "equal pay for equal work" pro grab the headlines - but because posal is because it is already right WLF has latched onto an appeal in line with the last thirty or ing (and fallacious) slogan: forty years of government inter "Equal pay for equal work." ventionism. It presupposes that the government, merely by enforc Mr. North is a Ph.D. candidate at the Uni versity of California, Riverside. ing a wage law, can in some way 4 THE FREEMAN January influence the aggregate economy they imply that capitalism has in to move along "positive, humani some way failed the test of common tarian" lines. This proposal, be decency. What they do not realize cause it is not radical in 1970, is that competitive market capi lends an aura of respectability to talism actually comes closer than an otherwise ludicrous movement. any other operational economic "Some of their rhetoric is exag system to meeting their demands. gerated," one intelligent woman All factors of production are re remarked to me, "but you can't warded exactly according to their argue with them on this point." productivity in a model of pure I can, and I will. competition; in practice, market capitalism approaches that model "Fair Employment" in a remarkably close way. But The argument in favor of the reward is not in terms of the "equal pay for equal work" rests "equal pay for equal work" slo on a concept of labor that was gan; .the reward is based on the overturned in the 1870's. It as concept of marginal cost, or "cost sumes that there is such a thing of the most important use fore as concrete human labor, a phys gone." The cost of any factor of ical entity that in some way production is based on the cost of can be measured. Value is in some the least expensive substitute for way linked to labor, and pay that factor; its value is depend should reflect value. This was the ent upon the economic value of its economic premise of virtually all product. In the long run, the free economists until the advent of market tends to work, through modern economics ; Karl Marx was competition, toward a balancing the last major economist to hold (or equating) of economic value the labor theory of value. Modern and economic cost. Any factor of economics rests on the concept production that is receiving too that value is linked to usefulness; large a share of net revenues will the value of labor depends on the be forced to accept a smaller value of labor's output. The dis share through competition. This tinction between the two concepts is true whether the factor of pro of value is crucial. duction is a computer or a secre When Women's Liberation ac tary. tivists argue that a basic im The advocates of "fair employ morality exists in any economic ment" keep pointing to the pro system that does not reward all duction side of the equation, laborers equally for equal work, vaguely identifying the product 1971 THE FEMININE MISTAKE 5 with "work." But the return to that there are five other women any factor of production is based ready and willing to take her sec upon the cost of replacing that retarial job at $350 a month, then factor just as much as it is based she would be wise not to demand on the value of the factor's prod very much more than $350 a month uct. Competition is supposed to in wages. She can demand a bit equalize the two - cost and value more, given the costs of train - if maximum economic efficiency ing a new girl, the difficulties in is to be maintained. (By economic volved in all bureaucratic changes, efficiency, the economist means the and the tastes of her boss with re highest value of production from gard to what constitutes someone a given input of resources, or a who is sweet, cute, and so forth. given .level of production from the But she must limit her demands. least expensive inputof resources.) Therefore, the return to the Willing to Work for Less computer is not based on "work," The WLF complains that women and neither is the return to the are forced to accept menial wages. secretary. The return to each is But in many, many cases, the based upon its contribution to pro reason she can accept such wages duction in comparison to the po is precisely because she enjoys the tential contribution of the near advantages of being a woman: she est competing factor. That is truly has a man who will help bear the fair employment. (Now, one can financial burdens of her own up also speak of charity as a means keep. She is on the job in order of increasing the return to a par to supplement his earnings, so she ticular human factor of produc is willing to work for wages that tion - paying him or her more are essentially supplemental in than he or she is economically magnitude. This, of course, means worth - but one should not argue .considerable hardship for the for this in terms of economics, a working woman who has no hus mistake made by virtually all of band to support her. But her case the "fair employment" advocates.) is not fundamentally different A woman who is seriously con from the man in his late thirties cerned with getting fair pay for who has eight children and who her contribution - mental, physi is faced with competition from cal, or simply resembling Raquel bright, young, single college grad Welch - has to ask this question: uates who are willing to take over What would it cost this company his job at the same pay, or per to replace me? If a woman knows haps slightly less pay.

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