My brother in-law was laid off recently and my sister was mentioning how this was affecting him. He is feeling a little helpless. He got up in the morning and went off to work like he always does, but that morning  when he walked into work, he was told business was slow and he wasn’t needed anymore. They told him to collect his things and go home. There was nothing he could do about it; it was completely out of his control. She commented about how awful the system was. I told her it was this way because of the government, which is pretty much my answer for most problems. My reasoning was that the government, through its regulation and tax system, herd people into wage employment.

If someone wants to earn money, there are three main ways they can go about it: they can sell something, they can sell a service, or they can sell their labor. The first two options are regulated; the third option is not. For example to sell a product or service one needs to be a business which requires getting a license and complying with other government regulation, not the least of which is navigating a complex tax system. Also, since government regulations and tax rules have encouraged employer sponsored health insurance, this is a large expense that self-employed people have to deal with. Since people take the path of least resistance, they go for option three: selling their labor to an employer (wage slaves when you consider how little choice they have).

Wage employment is by far the easiest, the employer tells you what to do and even provides training; simplest, the company has a person or department who deals with all the government requirements and they even do withholding to make paying taxes easier; and safest, at least that is what we are told. But a small business has many customers so if one or a few leave, they still have some money coming in from others, whereas when you have an employer, if they no longer want you, your income goes to zero (talk about putting all your eggs in one basket). Most people don’t just see wage employment as the best option, most people think of it as the only options. This is a result of government interference in the market place and not an unavoidable aspect of a free market.

People think of entrepreneurs as risk takers. We are all familiar with news stories of how eight out of ten businesses fail or some other similar statistic. People think of starting a business as a dangerous gamble but I wonder how many businesses would fail if they didn’t all have a silent partner (government) contributing nothing but taking something like half the profit? And not even just profit, things like licensing and expenses to meet regulations must be paid for whether or not there is a profit. It is a wonder that any business manages to succeed with such a heavy burden.

Wage employees feel helpless because they have been made helpless by the force of government. They have been funneled onto a path with limited options. I think the idea that this inequality in the employee/employer relations is a natural outcome of the market is what drives many left-libertarians into being anti-capitalist. But I believe that in a free market, employees will have much more power in the employee/employer relationship because they won’t just have the option of finding a different employer, they can just as easily work for themselves or even start up a competing firm. Employers will be forced to compete over a limited number of employees so they will need to treat them well if they want to retain employees and grow their companies. We do not need government to level the playing field between workers and management. Government is the reason the playing field is not level. The solution is to get the government out of the market.