1. To make the case against trade protectionism, Bastiat wrote a petition to the French parliament in 1845 on behalf of French candlemakers, who he said suffered from the unfair competition of a foreign rival flooding the French market with light at such an incredibly low price that domestic candlemakers couldn’t compete. That rival was the sun, and Bastiat proposed laws requiring “the closing of all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull’s-eyes, deadlights and blinds,” as a ridiculous form of protectionism for the French candlemakers.
2. When a new railroad was proposed from France to Spain, the French town of Bordeaux wanted a train depot because “if goods and passengers are forced to stop, this will be profitable for boatmen, porters, owners of hotels, etc.” Using reductio ad absurdum, Bastiat proposed that if a depot for one town was good for the general interest, then it would be good for dozens and dozens of other French towns, to the point that there would be so many stops and depots that it would actually become a “negative railway.”
More recently, the reductio ad absurdum approach has been used frequently to argue against raising the minimum wage. For example, here’s former Dallas Fed president Robert McTeer in Forbes first citing Bastiat and then arguing that:
If legislating a higher minimum wage, or dictating one by administrative fiat, could create prosperity, why stop with two or three dollars per hour? Just go ahead and raise it to $50 an hour and get a really good bang for your bucks. (Actually, there is no logical reason to stop at $50.)
While some might argue that reductio ad absurdum isn’t the best approach to use when pointing out the flaws and fallacies of the minimum wage law, I’ll follow Bob McTeer’s approach with another reductio ad absurdum argument against the minimum wage. Here it is:
There are thousands of different wages in the economy, here’s a list of hourly and annual wages from the BLS for more than 800 different occupations. If minimum wage proponents have faith that politicians and the government know the “best” or “optimal” minimum wage for unskilled workers, then shouldn’t that faith extend to politicians and the government determining minimum wages and perhaps maximum wages for all occupations in all industries. Note that the BLS wages are nationwide averages, and would vary around the country based on regional differences in the cost of living, so minimum wage proponents would further grant the government the power to regulate wages around the entire country.
But then wages are just one price – the price of labor – and there are thousands, if not millions, of other prices throughout the economy. If it’s best to let politicians and the government decide on wages (minimums and maximums), then shouldn’t the enlightened policymakers also be trusted to set all prices in the economy – consumer prices, commodity prices, home prices, etc.? After setting all wages and prices, shouldn’t politicians and the government also determine the price of credit by setting minimums and maximums for all interest rates in the economy?
Bottom Line: Just like Bastiat argued that if one train stop served the public interest, then an infinite number of stops could also be justified, I would argue using reductio ad absurdum that if minimum wage proponents want to give the government the power to set minimum wages for unskilled workers, then they should likewise grant government the power to set all wages, all prices, and all interest rates in the economy. On the other hand, if you don’t agree that the government should set all prices, wages, and interest rates in the economy, then it seems inconsistent and illogical that you think the government should set the minimum wage for unskilled workers.
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