Eugenics and the Minimum Wage

lundi 25 janvier 2010 ·

Libertarian and Conservative economists like Hoover Institution’s Thomas Sowell (Sowell 2004) have long argued that a high minimum wage and heavy labour regulations excludes unskilled workers from the labour market, thus denying them access to jobs in which they could learn skills and earn experience that would justify a wage increase. Often presented 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 century and 20th, proponents of the minimum wage actually desired the effects described above. The Eugenics movement sought the improvement of mankind by strong government intervention to isolate and exclude the weakest so to improve the genetic pool.

The publication of the Theory of Evolution by Charles Darwin has revolutionized more than just natural sciences; it started a radical revolution in the world of economics. An opponent of eugenics, Alfred Russell Wallace postulated that the natural selection process was not at work in the human civilization(Levy and Peart 2008). For Wallace, any human being feels sympathy for the destitute and will try to help him with different mean. As Adam Smith puts it in his Theory of Moral Sentiments, “if 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” (Smith, [1758] 2008) . However, this sympathy provided a gigantic problem to Francis Galton. In his mind, this sympathy meant that the weakest and the unfit would endure and breed with other human beings and thus create genetic regression. In fact, even the word “regression” that we now use in econometrics was coined by Galton who argued that the height of a group of tall individual would regress towards the mean as time goes by(Galton 1886). However, Galton mostly favoured policies that would allow the “multiplication of the best variants” (Galton 1904), he seldom talked about eliminating lesser elements. However, eugenics spread amongst economists. In a completely free market, immigration would become a factor of great importance since populations would move about frequently and mix within their hosting society. Migration between Nordic countries was acceptable but there were other countries with populations that were considered of a lesser quality (Commons 1916). Amongst them were the Irish and the Italians who were considered as lazy, stupid or mentally unstable. As for the black man, he was considered as a “negro” and according to famous economist Stanley Jevons as being “of lower race” and who “enjoys possession less, and loathes labour more”(as quoted in Levy and Peart 2008). If lesser populations blended with purer populations, they would erode the strength of the nation and thus you had high opposition amongst 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 create, according to Alfred Marshall, a lowering of a population’s genetic makeup (Marshall 1890). By the first decade of the 20th century Marshall, Jevons and Commons were also joined by Irving Fisher, Arthur Pigou and Herbert Croly from The New Republic (Leonard 2005). This allowed the emergence of new trends within the eugenics movement that rejected the policy recommendation of Galton of just promoting the best variants within the human race in order to embrace a policy of excluding the worst elements.

Amongst those we could find several founders of the London School of Economics and Political Science including 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” (as quoted in Leonard 2005). For them and others, it was necessary to reduce the fertility rate of lesser populations while increasing the fertility rate of better populations. 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 (USSC 1927). However, the idea of reducing their fertility rate was apparently not sufficient. In his judgment, Holmes stipulates 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” (USSC 1927). Thus there was a need for more aggressive policy to reduce the chances of survival of the feeble. Sydney Webb defined the entire part of the population that he saw as “problematic” as the “unemployables” and that capping of work hours and the minimum wage would have the social benefits of eliminating the so-called unemployables (Webb 1910). 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. If wage-determination was left to the market, the unfit would be able to find work even if badly paid because even if they were considered incapable of outdoing their superiors, they could be able to “under-live” them because of a biological predisposition(Leonard 2005). In the United States, this was particularly aimed at the black community by fear that they would be able to replace existing workers at lower prices and thus allowing them wages on which to subsist. Irishmen, Coolies (Asians) and Italians were also amongst those “unemployables” in the United States(Leonard 2005). In the United Kingdom, the Irishmen were the main target, especially by Sydney Webb(Leonard 2005). So even if there was a social cost to the minimum wage through lesser 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”(Leonard 2005). 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(Leonard 2005). It always came back to the necessity to exclude certain population groups so they would not lower the genetic makeup of a community, lead to its decadence and destruction.

Since World War II however, with the horrors of Nazi Germany, eugenics has completely disappeared from the mainstream academic community. Academic papers like 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. Let’s remember that now the minimum wage is being presented as a tool in providing anyone with a decent wage regardless of racial origin and that its level is always calculated by government officials to produce the less distortions possible on employment. However, let’s not forget where ideas start when we analyze them.

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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 Encyclopédia of Economics. Online. http://www.econlib.org/library/Columns/LevyPeartdismal6.html (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. http://www.adamsmith.org/smith/tms/tms-index.htm (page consulted on November 18th 2009).

Smith, Adam. [1776] 2008. An inquiry into the nature and causes of the wealth of nations. Online. http://econlib.org/library/Smith/smWNCover.html (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.

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Bryan Breguet est candidat au doctorat en sciences économiques à l’université de Colombie-Britannique. D’origine Suisse, il a passé les cinq dernières années au Québec au cours desquelles il s’est engagé en politique provinciale malgré le fait qu’il ne possédait pas encore la citoyenneté canadienne. Il détient un B.Sc en économie et politique ainsi qu’une maitrise en sciences économiques de l’université de Montréal. Récipiendaire de plusieurs prix d’excellences et bourses, il connaît bien les méthodes quantitatives et leurs applications à la politique.







Vincent Geloso holds a master’s degree in economic history from the London School of Economics, with a focus on business cycles, international development, labor markets in preindustrial Europe and the new institutional economics. His research work examined the economic history of the province of Quebec from 1920 to 1960. He holds a bachelor’s degree in economics and political science from the Université de Montréal. He has also studied in the United States at the Washington Centre for Academic Seminars and Internships. Mr. Geloso has been an intern for the Prime Minister’s cabinet in Ottawa and for the National Post. He has also been the recipient of a fellowship from the Institute for Humane Studies and an international mobility bursary from the Ministère des Relations internationales du Québec. Currently, he is an economist at the Montreal Economic Institute.

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