Suffering in Santa Monica

Saint Monica is the 4th century mother of Augustine, who endured anguish while her son embraced sin and heresy before his conversion to sound doctrine.

Santa Monica, California, is a fancy beach town that, for decades, has succumbed to every temptation against sound economic principles, and the latest outrage is going to cause anguish like never before.

This past week, the city council passed a "Living Wage" measure that requires a minimum wage of $10.50, which is a 68 percent increase over the state-mandated living wage. But it doesn’t apply to everyone: it is imposed against the most profitable businesses only.

If you operate in the tourist area on the beach or downtown, and your revenues are $5 million and up, you must pay the wage. In addition, the law imposes a mandate that employers pay health-insurance coverage up to $1.75 per hour, increasing to $2.50 per hour in July 2003.

Anticipating that businesses would likely cut back hours and employees under the strain of the law, it further mandates that employers not "retaliate" against them. Many businesses face the choice of either cutting the hours they are open or closing their doors. The precise fallout is difficult to predict: there will surely be a massive reshuffling of labor resources, but the basis on which it will happen will not be economic but political.

Nonetheless, the "Living Wage Movement" is celebrating. About 50 such laws exist around the country but they all apply to government institutions and contractors. This is the first time in the US that such a law has been imposed against private business. Hence, the pathetic socialists, forever looking for evidence that History is on their side, can delude themselves for another day that their stupid laws constitute "progress."

That such a law is bad for business, and bad for employees, is incredibly obvious. If increasing wages is as easy as passing laws, why not raise the living wage to $50 per hour? Why not $500 per hour? Somehow the city council understands that this would be over-the-top and cause bankruptcy and rampant corruption. Why, then, should any steps toward that end be taken?

The city council hasn’t figured out the basic economic principle that the only way to raise wages over the long run is to allow the free market to work. Capital investment increases to correspond with consumer demand and businesses find themselves in a position to make higher bids for quality employees. But this happens through a process of development that can’t be rushed through legislation.

Imagine the perverse incentives this creates for a business with $49 million in annual revenues, or for a developer who might consider taking over a beach-front business to make it run more efficiently. Suddenly, he is faced with vast new labor costs. Consider the costs of maid service alone: one maid can clean 14 rooms in an eight-hour shift, which means that an entire crew is required to operate one of these places.

The law will be challenged in court on grounds of equal protection. The problem is that a business just across the street will not be subject to the law, which is grossly unfair. The injustice of it all nicely illustrates the leftist view of justice: mistreat the successful and reward and subsidize the less successful. Apply the principle across the board, and you can destroy an entire civilization.

Now, why in the world would a city council do something that is so obviously self destructive? St. Monica asked that question when her son was hip-deep in the Manichean heresy, which required its followers to become environmentalists and sit under melon trees waiting for food to drop. The answer, which isn’t quite an explanation, is mental and moral blindness. The mask that covers their eyes is socialist ideology undergirded by the sin of envy.

People must have come to Augustine and said: "Why are you following this con-man called Mani? Don’t you know that he is a loon?" Augustine dismissed these critics as tools of the Catholic Church.

So too do the Santa Monica socialists disregard even the most reasonable skeptic as a tool of the beach-front capitalists who fail to envision the beautiful new socialist world they are creating right there in Santa Monica.

This is hardly the first nutty law this city council has passed. It has wrecked the place with rent controls that subsidize the rich and famous, while passing pro-homeless laws that have drawn the riffraff from every skid row in Southern California. The place looks like a third-world banana republic, with the super rich walking the streets next to squalor. Folks, this isn’t the bourgeois America that Tocqueville described.

Why can’t the city council see the obvious? Again, blindness is the reason. We see the same blindness in the Supreme Court, the US Congress, and the thousands of government agencies that daily try to regulate our lives for our own good. No matter how much coercion they impose, no matter how many failures they spawn, they stick to their program of attacking liberty and property while dismissing their critics as malicious.

It was the prayers of St. Monica, and the preaching of St. Ambrose, that finally freed Augustine from his attachment to nutty religious heresies.

When he finally came home to the faith of his childhood, he cried to God: "Too late have I loved Thee!" But it wasn’t really too late, because he entered the Kingdom of Heaven.

So too can Santa Monica enter the civilized world. It is not too late. The city council only needs to take off its blinders, embrace the idea of freedom, and let the market take care of the rest. Until that happens, the city will continue to sit under a melon tree waiting for food to drop.

Llewellyn H. Rockwell, Jr. [send him mail], is president of the Ludwig von Mises Institute in Auburn, Alabama. He also edits a daily news site,

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