Animal Farm

Species extinction is a loaded topic that touches too close to heart to many of my friends and I will do my best to empathize with them.

The Black Rhino has been declared extinct, and we were powerless to stop it. It will only exist in empty museum halls and dusty textbooks, banished eternally from the grasslands it once roamed.

In the grasslands the Black Rhino has become another victim to the Tragedy of the Commons. Individuals, acting rationally out of self-interest, depleted the resource even though its depletion is contrary to the group’s long-term best interest.

They say capitalism was the cause of the Black Rhino’s extinction, however, it could have been key to its salvation. Anti-poaching laws have done little to prevent greedy poachers from hunting down the black rhino to extinction for its horn.

The proper institutions are not in place, government officials are very much bribable. How can anti-poaching laws be enforced if poachers can bribe officials to look the other way? With proper institutions in place, Capitalism coupled with Property Right, a key element of free markets, would have saved the Black Rhino.

Individuals in clear possession of endangered species are best suited to insure their survival. As proprietors of the animal, it is in their best interest to keep something so scarce alive because they know that others value it.

Owning the last pocket of an endangered species screams profit. Rational Choice Theory argues that if there’s value in an estate sheltering an endangered species, then it would also make sense to “farm” them to increase the value of the estate. Yes, I said “farm.”

My friend argues that we would be saving an endangered animal for the wrong reason. I can empathize with her. I too would not want to see an animal caged in its habitat, even if that cage extends beyond its migration patterns. Ultimately I believe that saving an animal for the wrong reasons is better than failing to save them.

If you don’t believe I care about the issue, check out this “endangered species chocolate” bar I bought last night. It’s Rainforest Friendly, NON GMO verified, and Gluten Free!

endangered species chocolate

DC to stay true to its track record of progressive polices

The debate over DC’s minimum wage has been brought up once again. In the summer, DC council members voted to increase the required pay for employees that work in large retail stores, specifically Wal-Mart. Last month Mayor Gray vetoed the bill, the Large Retail Accountability Act, because he thought it would not be right to signal out Wal-Mart. He believed an increase in the minimum wage should be enforced across all sectors of the market.

The goal of this new wage hike is to help the exploited workers of DC make a “living wage” that will see the increase in employee’s wages rise from $8.25 to anywhere between $10.55 to $12.50, as suggested by council member Vincent Orange (D-At Large).

Common sense tells us that everyone will be better off as a result of a hike in the minimum wage, a higher wage would be expected to result in a higher standard of living. Upon closer inspection, economists beg to differ.

Economists argue that businesses that were considering hiring another employee will decide against it, or perhaps the smaller businesses that cannot afford to pay all of their employees the new higher wage will be forced to cut their employees’ hours, or let them go all together. Yes, those employees fortunate enough to still have a job once the dust has settled will see a higher pay, but will they really be better off?

Those lucky enough to not be laid off will have a higher “nominal” wage, but their “real” wage will be the same, if not less. To offset an increase in wages, firms will charge more for their services or goods.

Council member Orange claims that “this is about: a government that exhibits some kind of compassion that provides for people to have a better quality of life.” Unfortunately for him, it is never enough for a policy be of good intent. As Milton Friedman put it, “One of the great mistakes is to judge policies and programs by their intentions rather than their results.”

The results of a minimum wage hike will see to it that the very people we intended to help, the inexperienced youths and the elderly, will be made worse off.

The skill set that most youths carry would not justify a “living wage.” They simply do not contribute enough to society, yet. A higher minimum wage will only price them out of the market. Employers facing a hiring decision will choose the more experienced worker who comes closest to justifying a higher wage. The unemployment rate for youths aged 16-19 is already a staggering 34%, we would expect this figure to rise with another minimum wage hike.

Everyone wants what’s best for the elderly, but sometimes we are in fact “doing bad by doing good.”  An increase in the minimum wage will have a similar effect on the elderly as it did for the young, but for different reasons. The elderly do not contribute like they used to, and this is to be expected. In economic jargon, their marginal value product has diminished.

In essence, improving living conditions by raising the minimum wage is alchemy.