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I debunk the myth that capitalism exploits workers.

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Transcript
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Myth Debunked: Capitalism Exploits Workers

There is a common accusation by economic leftists that capitalism inherently exploits workers.

When asked what “exploitation” means, they will often say that big businesses force people to work for wages, and that people don’t have any real choice in economic mobility because without the work, they will starve.

While it is certainly true that many some struggle economically, these critics wrongfully blame capitalism as the root issue.

To understand why, it’s important to first lay out the basics of why people work in the first place.

Fundamentally, people need work to provide themselves with survival resources.

Early humans needed to hunt and gather food or else they would starve to death.

This wasn’t “exploitation,” but the default state of nature.

Without work to meet one’s basic needs, people would suffer from dehydration and starvation and soon perish.

It was only with the advancement of property rights that abundance could enable people to specialize in skill and produce far more than they could if they tried doing all things themselves.

It was more efficient for one person to focus on fishing, another on cultivating crops, another on hunting, and then to trade surplus, than for each person to try to do all those things themselves.

As people traded, they began to move beyond barter and started to monetize their goods, using what was traded to then trade further for what they really wanted, like trading a cloak for eggs and then those eggs for bread.

Fast forward to today, people now use currencies to represent their subjective values, and they earn that currency by providing specialized work to others in the market.

Nothing about earning currency and then trading it to meet one’s needs is inherently exploitative.

Working for currency is working to attain what is needed to later trade for items that meet one’s needs, from food, to clothes, to shelter.

The economic difficulty people truly face is what is forced upon them by the government, an entity that demands both a specific form of payment for taxes and a perpetual fee for existence with taxes.

In a truly free market, people could choose to work and trade with different modes of exchange, and a market-based variety of choices would pan out based on what people want to accept.

The government, on the other hand, demands that taxes be paid in Federal Reserve Notes specifically, which pushes people to trade for those notes, at a minimum, to meet those tax requirements under the threat of imprisonment.

That isn’t capitalism.

That is statism.

The government imposes the use of fiat dollars and people trade to get those dollars so that they can meet the government’s extortionary demands at the threat of property confiscation.

Economic leftists confuse this distinction and rope in government mandate with free market capitalism, leading to a misunderstanding of what it means for people to work and provide themselves value.

The other aspect of economic mobility that is often misunderstood is how to contextualize finding fulfilling work while also paying for one’s life needs.

While it is true that some people will inherently have more trouble than others finding fulfilling work based on their skills and location, the question of how people could gain true independence so they can build is not a matter of exploitation by capitalism, but how the government keeps people from true independence with taxes, licenses, and regulations.

If a person wanted to live a minimalist life until they could find work that suits them, they would have difficulty because the government taxes land perpetually, keeping people from being able to homestead undeveloped areas, and prevents minimalist structure creation with zoning laws.

It is difficult for someone to choose a minimalist lifestyle for the sake of biding time until a better opportunity arises when the government imposes restrictions and costs that make such a lifestyle prohibitive.

Take for example the Los Angeles city government seizing tiny homes from the homeless, homes meant to give the poor a modest home to start a new life from.

This can be seen with the Federal government’s stronghold on wide areas of land, restricting some 640 million acres from private homestead.

This can be seen with 94-year-old grandmother Geraldine Tyler, who lost her home over a $2,300 tax bill.

If not for the government’s roadblocks to independent living, many could opt for more affordable situations so they could then strategically work toward a more favorable environment.

And for those who claim that it’s all just a wages issue, this could not be further from the truth as nearly 99 percent of workers earn above the minimum wage.

If businesses could “exploit” however and whenever, then we would expect everyone to only make the “minimum wage.”

But this is not possible in a free market where people can compete, change jobs, and even start their own businesses.

Talent and effort are rewarded, and people look for opportunities both as employees and as business owners.

Once again, it is the government picking winners and losers with regulatory hoop-jumping that keeps people from being able to enter the market for themselves more robustly, whether that restriction is a limited license scheme for taxi operation, or a total ban on any non-licensed contractors.

And while some might say that certain businesses lobby for this restrictive environment, it would only prove the point that the government is the entity that forces these schemes as private businesses could not make and enforce these rules without becoming the state themselves.

Which is a reminder that these distortions by the state are cronyism, not capitalism.

Cronyism is that correct label of “exploitation,” and that exploitation stems from state-imposed force.

The closer we get to a free market without the government picking winners and losers with subsidies, bailouts, and selective licenses, the greater degree of choice people gain, whether it’s for employment, or starting one’s own business.

In sum, to get to a future without exploitation, we need the robust respect of property rights.

Sources
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Why Marx Was Wrong about Workers and Wages [https://mises.org/mises-wire/why-marx-was-wrong-about-workers-and-wages](https://mises.org/mises-wire/why-marx-was-wrong-about-workers-and-wages)

Labor and Capitalist Exploitation: Böhm-Bawerk and the Close of Marx’s System [https://mises.org/mises-wire/labor-and-capitalist-exploitation-bohm-bawerk-and-close-marxs-system](https://mises.org/mises-wire/labor-and-capitalist-exploitation-bohm-bawerk-and-close-marxs-system)

Why “Worker Exploitation” Is a Myth [https://mises.org/mises-wire/why-worker-exploitation-myth](https://mises.org/mises-wire/why-worker-exploitation-myth)

Share of wage and salary workers in the United States paid hourly rates at or below the prevailing federal minimum wage from 1979 to 2023 [https://www.statista.com/statistics/188206/share-of-workers-paid-hourly-rates-at-or-below-minimum-wage-since-1979/](https://www.statista.com/statistics/188206/share-of-workers-paid-hourly-rates-at-or-below-minimum-wage-since-1979/)

L.A. is seizing tiny homes from the homeless [https://www.latimes.com/local/lanow/la-me-ln-tiny-houses-seized-20160224-story.html](https://www.latimes.com/local/lanow/la-me-ln-tiny-houses-seized-20160224-story.html)

A 94-Year Old Grandmother Fights Back After Government Sold Her Home—And Kept The Profit [https://www.forbes.com/sites/kellyphillipserb/2023/04/26/a-94-year-old-grandmother-fights-back-after-government-sold-her-home-and-kept-the-profit/](https://www.forbes.com/sites/kellyphillipserb/2023/04/26/a-94-year-old-grandmother-fights-back-after-government-sold-her-home-and-kept-the-profit/)

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