For years I identified as a libertarian, but my understanding of ‘political economy’ has led me to embrace classical liberal principles. This shift stems from recognizing that the exploitation of the working class is a persistent reality, driven by greed among some business owners and corporate executives.
Having grown up in a middle-class home in Massachusetts, my father was a Boston firefighter. I was exposed to the lack of adequate pay that my dad received under then-Mayor Thomas Menino. This was in the 1990s and 2000s.
The Boston Firefighters Union (Local 718) was often involved in the fight for proper salaries for the Boston Fire Department. I learned that EMS and police officers often received more favorable annual pay contracts than firefighters.
As I grew and entered the U.S. Marine Corps in 2006, I was exposed to the steady federal government paycheck every two weeks (on the first and the fifteenth). I then became a commissioned officer and enjoyed even higher pay.
By the time I chose to resign in 2012, I was reading a book by former Congressman Ron Paul called Liberty Defined: 50 Essential Issues that Affect Our Freedom. In it contained a chapter on unions. Paul’s general consensus was that they were not very favorable from a libertarian or pro-liberty approach.
As my understanding of political science deepened, I learned that Republicans and conservatives often view labor unions unfavorably. Their reasoning is that wages should not be manipulated by organized groups. Instead, they should be negotiated by the employees directly with their employers.
The Moral Factor
However, I’ve come to recognize a crucial, often overlooked aspect that many libertarians disregard: the impact of greed on individuals and the broader economy. Ignoring morality is a critical error.
Milton Friedman’s doctrine, influential among conservatives and libertarians, emphasizes a purely transactional view of capitalism. This perspective is flawed because it treats greed, selfishness, and the pursuit of profit at others’ expense as simply ‘business as usual,’ minimizing the economic risks. The argument that ‘everyone is greedy’ and it’s a natural human trait ignores the real-world consequences.
This is a false premise. Greed, when pursued at the expense of others’ honest labor, invariably has destructive consequences. While there’s nothing inherently wrong with seeking wealth and prosperity, the means of achieving it are crucial.
We are all interconnected. The economy is a web of people’s relationships with one another. True capitalism––absent greed––is a win-win for everyone. It enables a bargained-for-exchange to occur among all participants.
For example, a store owner sells products or services for exchange of money, a medium of exchange which the store owner can then use to buy from someone else. Hence, there is a value being added on both sides of the transaction. One person benefits from receiving the products or services and the seller is compensated. Thus, both parties agree to do so voluntarily.
Minimum Wage Laws and Free Markets
While a government-mandated minimum wage does regulate the free market, it can be necessary to prevent worker exploitation and ensure fair compensation for labor.
I now reject the fallacy that a person’s worth is solely determined by their skills, and that someone ‘only deserves’ ten dollars an hour for flipping burgers or digging ditches. This assessment is entirely subjective.
There is no objective measure in reality as to how much someone should earn for their labor. It’s entirely up to the personal opinions and willingness of the employer. Thus, employees often agree reluctantly with these low wage parameters, often because they have little choice to find higher paying work elsewhere.
This brings the principle of self-governance into play. The inability to self-regulate necessitates external regulation. Exploiting the working class, who struggle to earn a living wage amid inflation and rising costs, violates natural law.
I am getting morally conscious because you cannot separate ethics from laws, economics, and society. Doing so divorces our humanness from the very fabric of capital markets and work.
The forgotten term used in many university classrooms in the 1970s was ‘political economy.’ This refers to the policy and legal framework of the economy based on ethics, social contract, and the norms of decency in a civilized society.
These ethical principles remain relevant. Workers will protest and strike when they feel mistreated, exploited, or taken advantage of for corporate gain.
Economist Milton Friedman’s influence brought this harmful doctrine into mainstream U.S. economics. The idea that a public company’s primary purpose is maximizing shareholder profits fosters greed and can lead to the exploitation of labor.
Later on, figures like Jack Welch, CEO of General Electric, fostered a new era of Wall Street earnings reports in which companies constantly strive––to this day––to beat their last quarter’s earnings on the ‘top and bottom line.’ Much of what goes on behind the scenes in the departments of CFOs here is a lot of number manipulation and fudging games.
Despite outwardly espousing noble mission statements, many companies prioritize self-enrichment at the expense of others, rather than focusing on the long-term health of the company.
True value and service to customers, proper wages to ‘team-member’ employees, and overall healthy work environments that create strong jobs and communities––ought to be the number one mission of every company in a free market.
If morality is honored concerning proper compensation to workers and true job satisfaction in order to provide excellent products or services to the marketplace, then everyone is happy.
A More Ethical Approach
Furthermore, I would like to propose an idea in the spirit of libertarianism and classical liberalism: that if these principles of free markets, private property, individual liberty are taken to heart, then a holistic approach must be followed. What I mean is that we cannot dismiss morality from the exchange of business in the marketplace. People must be paid properly for the work they provide, even if it means prices must go up.
The persistent rise in prices is largely due to the erosion of the dollar’s value over the past century, a consequence of the Federal Reserve’s fiat system and the abandonment of the gold standard. If inflation justifies increased executive compensation, then all incomes should rise proportionally.
The large disparity gap between corporate leadership profit and the lower rung of the pyramid is not only unethical, but it leads to a poorer economy. The more the working class has the ability to earn a living wage, the more they can spend, and the more productive and wealthier our society becomes.