It’s easy to feel like today’s economic problems are chronic and universal. So for a change of pace, let’s look back to a time when elites complained about too many jobs and called upon government for a maximum wage.
The story starts in the 1340’s in England. The King, Edward III, had been dealing with foreign problems abroad, including a number of wars, most of them with France. This was draining the coffers and leading to a lot of national debt, causing discontent at home. So, the King heads home and fires a bunch of royal officers and judges (i.e. government employees), which pisses off his political opponents. They argue and eventually come to a compromise that involves both severe restrictions on government spending and an increase in taxes. So far, it all sounds weirdly familiar, right?
Then came 1348. The Black Death had already been raging through mainland Europe at breakneck speed, and in 1348 it finally jumped the English channel and began its spread across England. Within 2 years, 40% of the population of the country was dead.
40% of the country was dead.
What would that feel like? Try to imagine. For just a moment, try to make that personal.
For every 100 friends you have on Facebook, 40 of them die in the next year.
You go to your yoga class, or your gym, or your lecture hall at school, and imagine half of the people who showed up on the first day are no longer there… because they are now dead.
It is an empty world. Of course, that’s just thinking about the people who are not around. That is not even considering the more grotesque aspects of the situation. Where are all of the bodies going? What exactly does the air smell like in the inner city? Let’s not think about that right now.
Instead, let’s think about the numbers: How many of the small stores that you know are now closed? You know which ones I mean: the little boutique clothing stores with 4 employees, two of whom are now dead? The little shop where you buy your holiday cards, or the gas station that is run by two parents and their college-aged son… they are all closed now, because every second person in the city is now dead.
That was the world in 1350 in England.
With the world is turned on its head, what happens next?
In today’s world, we have unemployment, and the wealthy business-owners are saying: “You know that minimum wage thing? We need to just get rid of that. According to a free market, when unemployment is this high wages should be lower! When wages go down, we can employ more people. Let the free market sort the situation out!”
In the upside-down world of 1350, there were many, many more jobs than there were people. The problem was the opposite of unemployment, although there isn’t really a word for it. The demand for workers was many, many times the supply. So the free market started to do what the free market would naturally do in this situation: wages shot through the roof.
Remember how this happens in a natural free market. Blue collar worker John Smith (and yes, there were people named John Smith in England even as far back as 1350) knows that Land Owner Willard needs workers desperately, because without workers his land will lay fallow, with no crops, and he will have no income in the spring. So when Willard says, “I will pay you three shillings,” and John Smith says, “I’m going to need ten shillings or I’ll go somewhere else,” Willard has very few options. He knows that all of the other land-owners are just as desperate as he is. If Willard really does try to insist on three shillings, there is a very good chance that the guy down the road will cave and agree to pay John 10 shillings. Then Willard will have no workers, and his land lies empty. So Willard is forced to agree, and wages are now 10 shillings.
The elite complained. The elite whined. It just isn’t fair! These workers can basically insist on any wage they want! They can lay around and do sloppy work, and they know that I can’t afford to fire them because there are more jobs than there are workers.
So what did the elite do? They decided that regulation was required. That’s right! Government interference with the free market! The free market was not doing what they wanted, and so they appealed to the King. And the King made some laws. (Those were the days for fast government action, huh?)
The 1349 Ordinance of Labourers and 1351 Statute of Labourers were a crack-down on the problem of rapidly rising wages that resulted from the Black Plague. Here are some of the best parts:
Edward by the grace of God etc. to the reverend father in Christ William, by the same grace archbishop of Canterbury, Primate of all England, greeting.
Because a great part of the people and especially of the, workmen and servants has now died in that pestilence, some, seeing the straights of the masters and the scarcity of servants, are not willing to serve unless they receive excessive wages: We, considering the grave inconveniences which might come from the lack especially of ploughmen and such labourers, have held deliberation and treaty concerning this with the prelates and nobles and other learned men sitting by us; by whose consentient counsel we have seen fit to ordain: that every man and woman of our kingdom of England, of whatever condition, whether bond or free, who is able bodied and below the age of sixty years, not living from trade nor carrying on a fixed craft, nor having of his own the means of living, or land of his own with regard to the cultivation of which he might occupy himself, and not serving another,if he, considering his station, be sought after to serve in a suitable service, he shall be bound to serve him who has seen fit so to seek after him;
WHOAH! Do you know what that just said?? If you are unemployed, able-bodied, under 60 years old, and are not a land-owner or independently wealthy, then YOU MUST AGREE TO WORK FOR THE VERY NEXT PERSON WHO ASKS TO HIRE YOU.
…and he shall take only the wages liveries, meed or salary which, in the places where he sought to serve, were accustomed to be paid in the twentieth year of our reign of England, or the five or six common years next preceding.
Not only do you have to agree to work for whoever is willing to hire you, but you are not allowed to ask for any more wages than people were getting paid before the plague started.
…if any man or woman, being thus sought after in service, will not do this… he shall be taken and sent to the next jail, and there he shall remain in strict custody until he shall find surety for serving in the aforesaid form.
There is more stuff like this. Grocers are not allowed to set prices higher than what they were before the plague, and so on. You get the idea. But the long and the short of it is: the elites of the time were not so pleased with the dynamics of the free market. Their solution? “If someone doesn’t agree to work for the wages that I think are right, then throw them in jail!”
Of course eventually, this lead to revolts and uprisings, although even that took about 30 years to completely materialize. These problems do sort themselves out in the end, after all.
But don’t ever let someone try to tell you that business people are always, as a matter of ideology, in favor of the free market. It only looks that way now, because being in favor of the free market is also being in favor of their balance sheet.