TGIF: The H-1B Controversy

Does anyone still believe that the market process should set prices, including wages? Apparently not. Take the controversy surrounding the H-1B visa, the program that "permits" employers to hire highly educated and skilled foreign workers, such as hi-tech personnel.

Judging by the narrow range, everyone involved in the debate is a social engineer. Only three options are on the menu: continue the program, reform it to prevent its misuse, and end it. What's missing? The "let the market set wages" option Sorry, that's not on offer.

Let's start with how the U.S. Department of Labor describes the program:

The H-1B program applies to employers seeking to hire nonimmigrant aliens as workers in specialty occupations or as fashion models of distinguished merit and ability. A specialty occupation is one that requires the application of a body of highly specialized knowledge and the attainment of at least a bachelor’s degree or its equivalent. The intent of the H-1B provisions is to help employers who cannot otherwise obtain needed business skills and abilities from the U.S. workforce by authorizing the temporary employment of qualified individuals who are not otherwise authorized to work in the United States.

The law establishes certain standards in order to protect similarly employed U.S. workers from being adversely affected by the employment of the nonimmigrant workers, as well as to protect the H-1B nonimmigrant workers.

Of course, the government has something to say about wages:

Employers must attest to the Department of Labor that they will pay wages to the H-1B nonimmigrant workers that are at least equal to the actual wage paid by the employer to other workers with similar experience and qualifications for the job in question, or the prevailing wage for the occupation in the area of intended employment – whichever is greater.

Is anyone offended that in a country that thinks itself free, the government decrees that employers need permission to hire "nonimmigrant aliens" and can get it only if certain conditions apply? "Nonimmigrant aliens" are people, in case anyone needs reminding. How's that good for a country supposedly devoted to freedom and free enterprise?

The standard answer is that those jobs are American jobs. However, if capitalist entrepreneurs want the freedom to hire consenting workers living abroad, the jobs obviously are not American jobs. Who has the right to declare them otherwise? A job is a continuing transaction between an employer and an employee. It has no national label. To insist that it does have such a label because the employer operates on U.S. soil is to accept a premise that requires proof, namely, that the government or a majority of voters owns the country. That premise glaringly clashes with the principle of liberty. It makes freedom a delusion.

When left free, the market sets prices, including wages, through the process that emerges from countless choices by individuals collaborating to achieve their personal goals. These choices include selling, renting, and buying material resources and products. Supply and demand generate a vast money-price system that enables everyone to make plans using economic calculation, as Ludwig von Mises long ago spelled out. Without calculation we could not make more than the simplest plans or judge a project's success or failure—through profit or loss—afterward. Waste would abound In a world of scarcity, which would be a disaster. Poverty would rule.

Among other things, prices and wages signal to producers what consumers want most keenly. Again, in a world of scarcity, that's important. Since we can't have everything right now, we must make choices. Resources producing automobiles cannot be producing washing machines or computers. What to do? Let the price system work its magic—except that it is not magic. It is human action and its welfare-enhancing consequences. When the government prohibits the price system from doing its job, scarce resources are wasted as far as consumers are concerned. In a free and competitive economy, their choices shift resources to the purposes consumers most want to be fulfilled. The whole point of an economy is to serve consumers, remember?

This is no less true for labor. If high-tech companies can find satisfactory foreign software engineers who are willing to work for less than their American counterparts, that's a signal to be heeded. The Americans have asked too much. They have no right to those jobs or a higher wage. There's other work to be done—or would be if the government did not interfere. Consumers are never fully satisfied.

Those are the basics. What about H-1B? That is not a market institution. It's an intervention to somewhat ameliorate the predicament of employers who are denied the full freedom to hire whomever they want. It's no more than second-best, and it has downsides. For example, its restrictions enable employers to pay foreign workers less than those workers would have earned if they could work freely in America. To get a visa, foreign workers must have employer sponsors. If they wish to quit their jobs, they must find other qualifying jobs or be deported. That undoubtedly keeps visa holders in jobs they would prefer to quit. That's not right.

But beware those shedding tears over H-B1 "indentured servants." Those are crocodile tears because those opponents would not replace the visa program with open visas, that is, free immigration. They would shut down the program altogether. My hunch is that visa candidates would prefer the current program to closed borders. They wouldn't come here if the conditions were not superior to those at home. So let's hear no more sobbing from "left" and "right" statist populists like Steve Bannon and Batya Ungar-Sargon. These opponents of freedom should not be making economic policy.

Has the program been misused, that is, used contrary to its stated purpose? Undoubtedly. That's standard operating procedure. When the government hands out favors, political entrepreneurship will emerge on the part of those who don't want to be left out. This is purely the result of government violations of freedom. Get rid of the program and you get rid of the misuse.

It is certainly to be expected that if foreign workers can freely come to America, some wages will go down. That's supply and demand. On the other hand, other wages will go up. Immigrants buy consumer goods and start businesses, in some cases, highly successful businesses. Lower market-set wages, by the way, bring lower consumer prices, raising the standard of living. As noted, wage differences signal consumers' most highly valued wants.

Finally, some might say that we Americans could have the benefits of high-skilled foreign workers without importing them. How? Through trade with their countries. But hold on. The same people who want to shut down H-1B also want tariffs against foreign goods to "protect American jobs." Even if we have free trade, however, that is not a good answer. Foreigners are much more productive here than they are over there. Why? Because America has more capital and better management techniques than India and elsewhere. Because capital investment per worker is so high in America, any human being will be many times more productive here than anywhere else. That's good for the workers—and for consumers. Remember: everyone is a consumer.

This matter is not "just economics." Freedom itself is at stake.

The Steady Rise in Living Standards

"The history of capitalism as it has operated in the last two hundred years in the realm of Western civilization is the record of a steady rise in the wage earners’ standard of living. The inherent mark of capitalism is that it is mass production for mass consumption directed by the most energetic and far-sighted individuals, unflaggingly aiming at improvement. Its driving force is the profit-motive the instrumentality of which forces the businessman constantly to provide the consumers with more, better, and cheaper amenities. An excess of profits over losses can appear only in a progressing economy and only to the extent to which the masses’ standard of living improves. Thus capitalism is the system under which the keenest and most agile minds are driven to promote to the best of their abilities the welfare of the laggard many."

—Ludwig von Mises, Human Action

Mises on Wages under Capitalism

"While daily experience taught impressively that under capitalism real wage rates and the wage earners’ standard of living were steadily rising, while it became from day to day more obvious that the traditional walls separating the various strata of the population could no longer be preserved because the social improvement in the conditions of the industrial workers demolished the vested ideas of social rank and dignity, ... doctrinaires announced that old customs and social convention determine the height of wage rates. Only people blinded by preconceived prejudices and party bias could resort to such an explanation in an age in which industry supplies the consumption of the masses again and again with new commodities hitherto unknown and makes accessible to the average worker satisfactions of which no king could dream in the past."

—Ludwig von Mises, Human Action

Labor as Commodity

For the individual actor, "as for everyone, other people’s labor as offered for sale on the market is nothing but a factor of production. Man deals with other people’s labor in the same way that he deals with all scarce material factors of production. He appraises it according to the principles he applies in the appraisal of all other goods. The height of wage rates is determined on the market in the same way in which the prices of all commodities are determined. In this sense we may say that labor is a commodity. The emotional associations which people, under the influence of Marxism, attach to this term do not matter. It suffices to observe incidentally that the employers deal with labor as they do with commodities because the conduct of the consumers forces them to proceed in this way."

--Ludwig von Mises, Human Action

TGIF: Immigration Foes, What's the Beef?

Bryan Caplan

If people are going to hate on immigrants, they should at least get their stories straight. Do immigrants take our jobs or do they sponge off us through welfare? Today, let's talk about jobs.

Recently I was listening to Spiked's Brendan O'Neill interview Batya Ugar-Sargon, the left/right-populist assistant editor at Newsweek, when I heard say: "The elites love low-wage slave labor imported by the cartels to work service industry jobs, that they would rather have cheap labor than have to pay more for it."

This is nutty working-class populism in its most uninhibited form. Ungar-Sargon would have us believe that people who risk life and limb thinking they're choosing to escape political-economic hellholes to achieve better lives for themselves and their families in America are just modern-day Kunta Kintes! They're not people; they're imports! That might come as news to them.

Ungar-Sargon is talking about both legal and so-called illegal immigrants. Interestingly, though, it seems to have escaped her notice that the only immigrants who could potentially be treated like slaves are those branded illegal by the U.S. government. They are vulnerable to abuse precisely because they have to keep themselves out of the clutches of Immigration and Customs Enforcement (ICE). Legal immigrants can call the cops. Being put on ice has a different meaning these days.

A bit later in the interview she said,

Black Americans have paid a huge price for our essentially open border for the last 40 years. Over and over businesses would much rather hire illegal immigrants than hire black Americans, and so they've literally paid for up to 40 to 50 percent of wages just sacrificed on the altar of progressive pieties about importing people from failed socialist states. They're very angry at that.

That 40-to-50 percent claim astounded me because I've never heard anything like it before. Neither have the two experts I asked, guys who know the immigration-related statistics as well as anybody and better than most. In their view, Ungar-Sargon made it up. She did not tell O'Neill where she got the statistic, and -- shamefully -- he did not ask.

I wonder why Ungar-Sargon singled out black Americans. She claims to reject identity politics in favor of class politics. Is she pandering? Since biology provides no genetic basis for categorizing people by skin tone or other such features -- since the human species does not consist of three to five genetically distinct groups called "races" -- who does Ungar-Sargon or her anonymous source include in the category of "black Americans"? But I digress.

Ungar-Sargon sounds like Bernie Sanders, a strong contender for the least impressive person in American politics, who says he opposes open borders because "the Koch brothers" favor it. That may be a reason, but it's not a good one. What else does he oppose because a rich person favors it? Brushing teeth after meals?

Ungar-Sargon, Sanders, and the others in this camp have their own version of the alt-right's replacement theory, don't they? The "cartels," she tells us, want to bring "slave labor" to America to replace native workers simply to save money. They want the people's (mis)representatives to stop this at all costs. But this is nonsense. Immigrants, especially ones without government papers, do jobs that Americans think are beneath them, particularly when the government supports them.

Make no mistake about what this position says: natives have a superior, if not the only, claim to the opportunities available through voluntary exchange in America. "They take our jobs" is an assertion of a native-only property right in jobs that has no rational basis in morality or economics. It's an ugly "blood and soil" sentiment, which does not suit a free society. Not only that, it cruelly relegates people born elsewhere to lives of misery, poverty, and oppression -- needlessly so because immigration, like every consensual transaction, is win-win. So keeping immigrants out not only hurts them; it also hurts us! Immigrants not only consume; they also produce and even start businesses and hire people, natives included.

True, if an immigrant is hired in America, natives who hoped for that job will be disappointed. But that sort of "negative externality" is a feature of life, not of immigration. People lose jobs in the short run through innovations in technology and business organization, not to mention fickle consumers. Who would outlaw innovation or consumer freedom on that count? The fact is, as history demonstrates, people who are thus harmed will benefit after a brief adjustment to change -- if the government keeps out of the way.

But let's also understand what Ludwig von Mises meant when he wrote in Human Action, in the section he called "The Harmony of the 'Rightly Understood' Interests": "The fact that my fellow man wants to acquire shoes as I do, does not make it harder for me to get shoes, but easier." In other words, mass markets with their economies of scale and falling costs of production, provide everyone with an ever-greater abundance of affordable goods and services. It was, after all, the emergence of the market order that led to mass production for the first time in history.

What Mises was saying about consumption obviously applies to production too because it's the flip side of the coin. Producers hire workers. The availability of a larger labor force furnishes entrepreneurs with opportunities for new and better enterprises that could not have existed with a smaller workforce. Products and services that were beyond reach yesterday are available today. In a society unencumbered by government intervention (unlike the one we have), the increasing demand for jobs more or less creates its own supply.

As for wages, let's see what a bona fide expert says. George Mason University economics professor Bryan Caplan (with illustrations by Zach Weinersmith) addresses the matter in their graphic nonfiction work, Open Borders: The Science and Ethics of Immigration." Opponents of free immigration should hold their tongues until they are prepared to answer Caplan's multidimensional case.

As for wages, Caplan writes:

Even economists who emphasize the negative effects of immigration on native wages report small -- and mixed -- effects. [George] Borjas and [Lawrence] Katz ... estimate that, in the long run, extra Mexican migration from 1980-2000 reduced U.S. native dropouts' wages by a grand total of 4.8%, and college graduates' wages by 0.5%. They also conclude, however, that Mexican immigration increased the wages of native high school graduates by 1.2% and those with some college by 0.7%.

And:

Immigration increased labor demand through two channels --- one obvious, the other subtle. The obvious: More immigrants means more potential customers. The subtle: Since migration increases foreigners' productivity [a very important point! -- SR], they have more resources to offer in the marketplace. As a rule, sellers profit from more and richer customers.

And:

How can native workers possibly profit when labor supply rises? Through specialization and trade. When the supply of low-skilled workers goes up, so does the demand for higher-skilled workers to manage them. When non-English-speaking immigrants increase the supply of cooks and dishwashers, this increases the demand for English-speaking waiters.

"But," Caplan's stick-figure interlocutor asks, "won't all these low-skilled immigrants depress our country's average standard of living?"

Caplan replies: "Almost certainly. But there's no need to worry. Your fears rest on the dreaded ... ARITHMETIC FALLACY!" He illustrates the fallacy by asking us to imagine that a group of little kids enters a room full of NBA players. The average height of the group will shrink, of course, but has anyone actually shrunk? Of course not.

"The lesson: When the makeup of the population is changing, averages are deeply misleading. The average can easily fall, even though everyone is better off!" Understanding basic statistics is necessary simply to protect yourself from number-wielding fraudsters.

So, Batya Ungar-Sargon, Bernie Sanders, Brendan O'Neill, et al., stop losing sleep over what will happen to native workers if we respect the universal natural right of everyone, regardless of birthplace, to seek a better life. Beyond the very short run, treedom benefits everyone. To appreciate this point, economist Caplan notes that if people worldwide were free to move to where they would be most productive, world output  "could easily double." He writes, "estimated gains range from 50 to 150% of gross world product." In other words, "economically, open borders is like getting an extra ... seventy-five Manhattans a year."

Respecting everyone's liberty doesn't cost. It pays -- big time!

TGIF: Are Bosses like Rulers?

What does the libertarian philosophy have to say about business management as an institution? Is it analogous to the state or something entirely different? Since we libertarians generally dislike seeing people being bossed around, whether by the state or anyone else, we may be tempted, as I've certainly been, to think that a free and just society would spontaneously dispense with the traditional employer-employee relationship. After all, libertarians have good reasons to at least be suspicious of all hierarchies and subordination, right?

So freedom would achieve its glorious pinnacle through flat bossless worker-owned co-ops, small partnerships, single-proprietorships, and peer-to-peer arrangements that lack even Uber's central ownership.

But maybe not.

The prediction that managerial specialists are due for extinction, however, looks more like wishful thinking in light of solid economic theory and empirical evidence, write economists Peter G. Klein and Nicolai J. Foss in their new book, Why Managers Matter: The Perils of the Bossless Economy. (This is not intended as a formal book review. Listen to Klein's conversation with Keith Knight of Don't Tread on Anyone.)

Klein and Foss's thesis grabbed my attention because, as I've experienced firsthand, drawing an analogy between the state and the traditional firm is seductive. On the other hand, I've known and respected Klein, an economist of the Austrian school who teaches at Baylor University's Hankamer School of Business, for many years. I take him seriously. (Foss teaches at the Copenhagen Business Schools in Denmark.)

The case against the traditional firm has this touch of plausibility: because government interventions in mixed economies can make quitting a job artificially costly, people might feel trapped in bad work situations. To the extent that the government deliberately or inadvertently creates obstacles to starting businesses or relocating (through licensing,  zoning, and more), or through a tax system that ties medical insurance to one's job -- to that extent, the government can in effect block employees from leaving bad workplaces or reduce their bargaining power. Such interventions provide a politically derived advantage to employers over actual and prospective employees that could not be achieved in the market.

But employers can create these impediments. Politicians and bureaucrats can and do.

For libertarians, the obvious remedy for politically bestowed advantages on employers is freedom, specifically, the freedom to compete, to start businesses, to move where the terms are better, etc. Ready options increase employee bargaining power. (Adam Smith in The Wealth of Nations decried the English laws that barred workers from moving to other areas in search of better pay.) Competition is the universal solvent.

The case against government policies that favor employers (again, not necessarily by design) should not facilely be extended to managerial hierarchy or traditional employment per se. Socialists haven't been the only ones to equate employment with servitude. Even the great classical liberal philosopher Herbert Spencer compared it to slavery. (Ironically, the pre-Civil War South's most eloquent defenders of chattel slavery denounced the wage slavery of the free labor market.) However, in a free market and even in a mixed economy like ours, the problem isn't distinct ownership and management. It's politicians and bureaucrats.

This is a big subject, and I'm certainly no expert, so I can only scratch the surface here. But Klein and Foss specialize in the economics of industrial organization and are an important reality check on those who think managerial hierarchy is morally objectionable and economically superfluous or worse.

Morally, of course, as long as neither side of a transaction, including the employer-employee relationship, uses force against the other, the transaction passes muster. It is irrelevant that one side can be said to have a "greater need" than the other for that relationship at that time. It is no employer's fault that people need to earn a living. One might even praise the employer for providing the means to do so. But let's remember that no firm is founded to provide jobs. Firms exist to make money for their owners by producing something of value for others. To do that they will typically hire people. Like other market transactions, all these exchanges produce mutual gains.

People start businesses with plans to produce something specific. Until they decide that a new objective is needed, the owner (or owners) will want to motivate and guide the staff to carry out the mission. Exactly who decides how the mission is carried out is a management's judgment call that depends on many factors. That's what management is about, and managing is real work, as the early classical liberals understood. The owner of an Indian restaurant is unlikely to hire chefs who insist on the autonomy to add other kinds of dishes to the menu. It would be wrong to think that those chefs are oppressed or stripped of their dignity.

Owners or their managerial agents, then, select the company's ends. However, the authors say, in the new information economy, it makes more sense than ever to leave the means to frontline employees. "We agree that the new environment suggests the need for a redefinition of the traditional managerial role." But they add: "Despite all the changes that have occurred, there is a strong need for someone to define the framework. In the knowledge economy, the main task for top management is to define and implement the rules of the game." Managers are also important for coordinating different divisions of a company that depend on each other.

Nuance, then, is the order of the day. Klein and Foss clearly are not dogmatically pro-hierarchy: "Indeed, some companies have excessive corporate fat: layers could often be cut, and empowering employees might increase productivity."

But the authors note that although the new technologies have revolutionized business, "the laws of economics are still the laws of economics, human nature hasn't changed, and the basic problem of business -- how to assemble, organize, and motivate people and resources to produce the goods and services consumers want  -- is the same as it ever was."

Any firm or noncommercial organization, for that matter, requires a focus on both the forest and the trees, the long and short term. Why would we be surprised that different people have different skills and different preferences in this regard? Skills, of course, are not evenly distributed throughout a population. A division of labor, knowledge, and inclinations is to be expected. Many will want to concentrate on a specific job, without having to think about management, long-term planning, and such. Lots of people dislike sitting through meetings.

Moreover, people differ in their preferences for risk-taking. Some prefer a regular paycheck in return for less overall responsibility.

The upshot is that human diversity makes noncoercive hierarchies perfectly understandable, inevitable, and beneficent as long as the market is free. That in no way means that bosses can't be stupid, obnoxious, or abusive. Of course they can and are. But if they have to compete without government privilege, abuse and stupidity won't survive because profits will go to the better-run firms, which will attract the best employees. 

In interviews (as in his and Foss's book), Klein emphasizes that one size surely does not fit all companies. As a Hayekian, he understands that nonmanagement workers possess local and tacit knowledge that managers don't -- and that good managers will want their employees to capitalize on that knowledge and reward them for doing so. "[T]here are many benefits to decentralization, as well as costs, and these vary widely with context and circumstance," Klein and Foss write.

Klein and Foss intend their book to correct the impression given by many current writers on management philosophy that hypes the spread of nonhierarchical companies and predicts a future marked by this new way of doing business. It's not true, Klein and Foss respond: "... echoing Mark Twain ... the death of hierarchy has been greatly exaggerated and ... its bad reputation is largely undeserved."

Their point is not simply that some degree hierarchy is more efficient than none at all, but that bosslessness poses perils to businesses, such as discoordination and -- perhaps counterintuitively -- lack of flexibility.

As you can tell, this is a rich thesis. I'll close with a couple more quotes:

Writers [who favor bossless firms] ... are fiercely critical of traditional hierarchy, but we think they exaggerate its problems and neglect many benefits.... The near-bossless companies -- and there aren't many of them -- with their self-managing teams, empowered knowledge workers, and ultra-flat organizations are not generally or demonstrably better than traditionally organized ones. Bosses matter not just as figureheads but as designers, organizers, encouragers, and enforcers....

[I]f you look more closely at ... ostensibly bossless companies, you see that they do have formal [or informal] bosses.... Right away, this suggests that perhaps the whole bossless company narrative is a bit of a head-fake -- a way to draw attention to the charismatic, influential leaders who create and promote flat structures..... Contrary to popular opinion, the world is not becoming dominated by flatter, even bossless, network organizations.

The market is an efficient decentralized information-generating process. Through private property, voluntary exchange, free enterprise, and the price system, we learn things that we can't learn in other ways. This is as true for the best management methods as it is for the many other things we look to the market for. Government should never impede worker-owned enterprises, but it shouldn't help them either. Freedom is for all. 

Related reading: "Free Men for Better Job Performance" by C. L. Dickenson, published by the Institute for Humane Studies in 1966. It is posted here and here.

TGIF: The State Is No Friend of the Worker

The election season is upon us, and we’re hearing the usual political promises about raising wages. Democrats pledge to raise the minimum wage and assure equal pay for equal work for men and women. Republicans usually oppose those things, but their explanations are typically lame. (“The burden on small business would be increased too much.”) Some Republicans endorse raising the minimum wage because they think opposition will cost them elections. There’s a principled stand. 

In addressing this issue, we who believe in freeing the market from privilege as well as from regulation and taxes should be careful not to imply that we have free markets today. When we declare our opposition to minimum-wage or equal-pay-for-equal-work legislation, we must at the same time emphasize that the reigning corporate state compromises the market process in fundamental ways, usually to the detriment of workers. Therefore, not only should no new interference with the market be approved, but all existing interference should be repealed forthwith. If you omit that second part, you’ll sound like an apologist for the corporatist status quo. Why would you want to do that?

It's all here.

TGIF: Work!

Among those who have commented on the nature of work, I prefer Maynard G. Krebs to Ralph Waldo Emerson, and the economists to the moralists.

Read about it here.

Latest Op-Ed: How to Help Fast-Food Workers

Doubling the minimum wage may seem like a good way to help fast-food workers, but it would hurt them instead. So what should we do? We must sweep away the government-created barriers to income earning, barriers that protect established businesses from competition and rob the most vulnerable people of options.

Read all about it.

Should Labor be Paid or Not?

Good stuff from Benjamin Tucker, Liberty, April 28, 1888; reprinted in Instead of a Book, by a Man Too Busy to Write One (1893/1897):

In No. 121 of Liberty, criticising an attempt of Kropotkine to identify Communism and Individualism, I charged him with ignoring the real question whether Communism will permit the individual to labor independently, own tools, sell his labor or his products, and buy the labor or products of others. In Herr Most’s eyes this is so outrageous that, in reprinting it, he puts the words the labor of others in large black type. Most being a Communist, he must, to be consistent, object to the purchase and sale of anything whatever; but why he should particularly object to the purchase and sale of labor is more than I can understand. Really, in the last analysis, labor is the only thing that has any title to be bought or sold. Is there any just basis of price except cost? And is there anything that costs except labor or suffering (another name for labor)? Labor should be paid! Horrible, isn’t it? Why, I thought that the fact that it is not paid was the whole grievance. Unpaid labor has been the chief complaint of all Socialists, and that labor should get its reward has been their chief contention. Suppose I had said to Kropotkine that the real question is whether Communism will permit individuals to exchange their labor or products on their own terms. Would Herr Most have been so shocked? Would he have printed that in black type? Yet in another form I said precisely that.(131 ¶ 1)

If the men who oppose wages—that is, the purchase and sale of labor—were capable of analyzing their thought and feelings, they would see that what really excites their anger is not the fact that labor is bought and sold, but the fact that one class of men are dependent for their living upon the sale of their labor, while another class of men are relieved of the necessity of labor by being legally privileged to sell something that is not labor, and that, but for the privilege, would be enjoyed by all gratuitously. And to such a state of things I am as much opposed as any one. But the minute you remove privilege, the class that now enjoy it will be forced to sell their labor, and then, when there will be nothing but labor with which to buy labor, the distinction between wage-payers and wage-receivers will be wiped out, and every man will be a laborer exchanging with fellow-laborers. Not to abolish wages, but to make every man dependent upon wages and to secure to every man his whole wages is the aim of Anarchistic Socialism. What Anarchistic Socialism aims to abolish is usury. It does not want to deprive labor of its reward; it wants to deprive capital of its reward. It does not hold that labor should not be sold; it holds that capital should not be hired at usury.

But, says Herr Most, this idea of a free labor market from which privilege is eliminated is nothing but consistent Manchesterism. Well, what better can a man who professes Anarchism want than that? For the principle of Manchesterism is liberty, and consistent Manchesterism is consistent adherence to liberty. The only inconsistency of the Manchester men lies in their infidelity to liberty in some of its phases. And this infidelity to liberty in some of its phases is precisely the fatal inconsistency of the Freiheit school,—the only difference between its adherents and the Manchester men being that in many of the phases in which the latter are infidel the former are faithful, while in many of those in which the latter are faithful the former are infidel. Yes, genuine Anarchism is consistent Manchesterism, and Communistic or pseudo-Anarchism is inconsistent Manchesterism. "I thank thee, Jew, for teaching me that word."