On rationalism

I’m a little surprised that there wasn’t at least some kind of whining about yesterday’s post, wherein I said something about raising the minimum wage being a good idea given the dysfunctional economy we live in.  I didn’t go much into the reasoning behind it, other than to say that employers tend to not recognize the contributions of their employees adequately.  But, there’s more to it than that.

Ayn Rand had this to say about Capitalism:

“Since knowledge, thinking, and rational action are properties of the individual, since the choice to exercise his rational faculty or not depends on the individual, man’s survival requires that those who think be free of the interference of those who don’t. Since men are neither omniscient nor infallible, they must be free to agree or disagree, to cooperate or to pursue their own independent course, each according to his own rational judgment. Freedom is the fundamental requirement of man’s mind.”

Unfortunately for us, we live in a world where few actually understand how to think, and those that do are subject to the whims of the majority who don’t.  Worse, those that don’t think rationally believe they do.  In the case of employers, it goes like this:  I pay my workers $X.  I make $Y in profits.  If I pay my workers $X+10, then I make $Y-10 profit.  And that’s as far as it goes.  This thinking was demonstrated by the reaction of McDonald’s stock price, which was likely at least in part due to the President’s comments in the State of the Union address.

Only, rational thought requires employers to look beyond this overly simplistic equation.  This is especially true of large employers, like Walmart.  In some areas, at least, Walmart is a big enough employer that their actions can have a substantial effect on the local economy.  If they pay their workers more, then the local economy is better off.  Their employees have more money to spend, and some of that might actually be spent at Walmart.  Turnover rates would be lower.  Taxes could be lowered in part because of less need for government assistance.

It’s true that a lot of people might just take the extra pay and think of it as some sort of entitlement and nothing would change at all, at least for them.  But higher pay based on performance would likely attract somewhat more worthy individuals, and convince them to stay longer.  Lower turnover results in lower costs.  Higher pay results in lower “welfare” payments.  Lower welfare payments result in lower taxes.

At least, that’s the way it should work, if we lived in a society where rational thought was something that happened on a regular basis.  Unfortunately, that isn’t reality.  The propensity for everyone to label first themselves, and then everyone else is, I think, an example of how nobody wants to think any more.  It makes it easy because we can just apply whatever our ideology is to whatever the problem is and bang, we think we have a solution.  And everyone else is stupid because their ideology is so obviously flawed.

But our world is complex.  In fact, it is so complex that simple ideologies don’t work.  Objectivism doesn’t actually work in the real world because it requires that people think rationally; that they deal with each other fairly; that they treat each other with respect simply because we are all human beings.  And that doesn’t happen.  And until it does, then I say, “Yeah.  Raise the minimum wage.”