A Capital Day

Monday is Labor Day, a day chosen by President Grover Cleveland to celebrate workers’ contributions to American economic and social life. The early September date got the nod expressly to derail those radical syndicalist, communist, and anarchist agitators who pushed May Day as their day to rally the proletariat. Labor Day was a frank attempt to mainstream the labor movement.

Nowadays it means next to nothing, as near as I can make out. Some folks used to take it seriously as a holiday. Today, though, we celebrate “labor” not only by not working, but by traveling, picnicking, attending sports events, and partying in general. It really has nothing to do with honoring a sector of economic life. It’s all about fun, and about giving an extra day of paid leave for public employees and unionized workers . . . and many, many others.

Since it means so little now, it’s probably worth reminding ourselves why it once meant so much — or at least enough to create an “alternate” and “official” celebratory day.

Once upon a time, labor was associated with slavery, and even in the “free labor” market, hiring someone amounted to hiring an inferior. Abuse of workers was not uncommon enough, even though it was often not as bad as depicted in some of the literature of the day.

Like today, the more skilled, the more valuable the worker — that is, the harder to replace the worker, and the more the worker contributed — the better that worker was treated. But a certain callous disregard for freely contracted labor aroused a great deal of animosity from laborers towards employers. This was especially evident during the days of slavery in the South, where slaves were often treated better than hired hands. Why? Because a slave amounted to capital, and possessed capital value — slaves could be resold. The most dangerous work of unloading cotton bales, for instance, usually went to Irish workers, not black slaves. The plantation owner did not care if an Irishman died. The free Irish were expendable, the slaves were not.

Working conditions and the wage contract improved over time, both with and without the aid of “organized” labor. But improvements often went too slowly for the politically minded, so many regulations and “progressive” rules were advocated and enacted despite their sometimes obvious ill effects. (Many “pro-labor” regulations simply put some folks out of work altogether, for instance — which is the reason why those measures were advocated, in not a few cases. Yes, to dis-employ competitive laborers. And that is also why free immigration came to a halt during the Progressive Era, as an anti-competitive move. These measures didn’t help “laborers in general,” they helped some laborers at the expense of others.)

These days, labor unions shrink in the competitive sector but thrive in the public sector — booming so much that it’s dooming the finances of that sector (the public debt of the several states amounts to many trillions of dollars, and a lot of that has to do with amazing compensation rates, particularly in the form of under-funded pensions and healthcare). So “Labor Day,” which when I was young might as well have been called “Labor Unions Day,” now possesses an understated quality about it. Public unions don’t really want to call attention to their own wage contracts, with their plush benefit packages. Their ultimate bosses — the general citizenry — might object.

Which brings me to the droll suggestion of the Foundation for Economic Education (FEE):

Since labor and capital are hugely dependent upon each other, why do we have a “Labor Day” in America but not a “Capital Day”?

This suggestion of FEE President Lawrence W. Reed is actually quite important. In the distant past, labor went unappreciated in general, and in law. But today? Well, pretending that labor is everything in an economy — or even the only thing worth celebrating — lends itself to the pernicious notion that capital is (and businessmen, savers, investors, entrepreneurs, and bankers are) necessarily exploitative.

That’s mere Marxist nonsense. Sadly, it’s a general outlook that many people in today’s labor movement still have.

And, for that reason, maybe we should celebrate a “Capital Day.” Savings, investment, and producers’ goods? All are important. And the people who own them have rights. Their contributions to our lives are enormous. Indeed, without them, labor would be home production and not much else. It’s the savers and investors and businessmen and entrepreneurs who make the jobs that allow people to hire themselves as workers. The jobs come from them.

And not from the government.

Politicians may promise “jobs,” but they don’t directly create them, unless they take the money to pay for government jobs from others. Taxpayers. Ultimately, workers. (For the money doesn’t come from profits, usually, even if the “rich” are the ones taxed. They shift as much of the burden of taxation onto others. The incidence of even a consumption tax tends to rest on production. In one way or the other, it’s the “workers” who pay the dearest from government jobs.)

So, let’s find a day to celebrate capital . . . and then not invite the government. Shout three or four cheers for invested wealth, and the people who do the investing and the managing. And by all means explain your cheers to your neighbors.

But please: Don’t make it “official.” It might encourage capitalists to beg for more bailouts. And that would send the wrong message.

Let the capitalists sink or swim on their own.

I think even old Grover would have been pleased.

September 2, 2012

This column was first published on Townhall.com.