Bryan Caplan  

Roots of West Virginia's Anti-Capitalistic Mentality

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West Virginia's got the lowest level of economic freedom in the U.S. What's the reason? Newly-minted WVU Ph.D. Claudia Williamson traces it to West Virginians' serious historical misconceptions in her chapter in Russ Sobel's edited volume, Unleashing Capitalism: Why Prosperity Stops at the West Virginia Border and How to Fix It. Here's Williamson:

Growing up in West Virginia, I was often told of the horrific and unbearable conditions that coal miners faced over the state’s history. The stories usually involved numerous accounts of how the conditions of the mines were unsafe, the miners were not fairly compensated, and miners were continually exploited by the owners of the mines. The most popular stories of exploitation surround examples of miners and their families living in over-priced, yet run-down company housing and having to shop at the company store where prices were heavily inflated.
Drawing on Price Fishback's work, Williamson persuasively argues that, once again, popular opinion is dead wrong. Miners enjoyed the benefits of a competitive labor market, got paid extra for dangerous condition, and didn't "owe their souls to the company store."

Ken Fones, WVU history prof takes issue with Williamson's chapter, though it's surprising how much ground he gives - and how many of his complaints reflect a poor grasp of basic econ. From his conclusion:

The people of West Virginia do not object to capitalism per se; they object to the unfettered sway of large corporations that have no interest in building a balanced and self-sustaining economy that promises high wages and high productivity in the market so that all of the state’s people might benefit.
It's almost like historians don't see that "unfettered "corporations increase productivity - and compete for workers - out of simple self-interest. Almost.

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COMMENTS (14 to date)
Lord writes:

Large local resource monopolies are unfettered competition? It sounds like they have learned all too well.

Steve Sailer writes:

Ali G: Check dis. I is now in a coal mine which is where the Wales people used to live, underground. Millions of years ago miners lived under here before they became human beings.

Miner: They never lived here, they just worked here.

Ali G: They worked in 'ere? What a crap job.

spencer writes:

Claudia Williamson says labor turn over reflects competitive markets and a turnover rate of over 50% shows a high degree of mobility.

Wal-Mart has over a 50% labor turn over rate so this author must believe that there is a high degree of competition for Wal-Mart employees.

Of course you could look at it another way and think that a high turn over rate reflects poor working conditions.

Do you believe that WMT has such a high turn over rate because other retailers are recruiting all their good employees away with higher salaries?

FC writes:

1. Coal mining is horrible.
2. Proles want to work as coal miners.
3. Proles must be stupid.
4. Stupid proles need the vanguard party to take care of them.

Justin Ross writes:

Claudia W. Rules.

Spencer: Yes, Wal-Mart is highly competitive in local Labor Market with other retailers. Especially in West Virginia. Do yourself a favor and Google "compensating differentials" and answer the question for yourself about why a high turnover rates do not imply "crap jobs" and do imply high mobility and competitive markets. Better yet, take an economics course.

Bill Stepp writes:

As a resident of the People's Republic of New York, which loses out to Rhode Island and West ginny, I demand a recount!

Justin R writes:

I'm curious as to how Fones knows what Williamson's "ideology" is based on reading this chapter. Knowing Claudia I realize the answer - He Doesn't, or else his statements about her would be more congruent with reality. This "ideology" claim is an example of projection: her evaluation of the subject does not fit his ideology, thus she must be grinding an ideological ax.

Economics is a science, and for those other fields (like History) where perspective is so important I imagine it is customary to discount views based on the author. While economics, like every science, has some bad apples who would rather sell books than be good practitioners, Claudia (nor Russ Sobel) is not among them. His blog entry demonstrates a miserable understanding of economic systems (moderate principles level econ students would even surely pick out many of the errors). Which is fine, he is not an economist, but he should leave then the economics to those in position to properly evaluate those systems.

Blindly pushing ideology by attacking those scientists working on these very real problems makes him an enemy of the poor and of West Virginians' standard of living.

dearieme writes:

Mining seems to be particularly prone to historical drivel. There are elderly Welsh miners who will tell you all about Winston Churchill sending in troops to shoot down striking Welsh miners. "My uncle saw it with his own eyes" and suchlike. I gather that (virtually?) every historian who has looked into it has decided that it's untrue.

fundamentalist writes:

So is Prof Fones irrational, per Caplan's irrational voter thesis? What about socialist economists like Paul Krugman, for whom the cost/benefit ratio of analyzing economics isn't too high, but he still holds similar views to those of Prof Fones?

Michael Sullivan writes:

High turnover seems like a positive indicator of a competitive labor market, but there could well be other reasons for high turnover in an industry.

She claims that miner's were compensated for poor working conditions, based *solely* on the claim that it was a competitive labor market, which is demonstrated *solely* based on the high turnover rates. No other evidence.

That feels a little too much like assuming what she is trying to demonstrate.

It would be nice if there were some actual data on miner's average hourly wages relative to other jobs at the time.

The only place where the data speaks *directly* to the question under discussion is the "company store" effect, where they actually compare prices of company store goods and similar goods in other stores.

Ricky writes:

West Virginia has never seen capitalism as most of the the people in the US (current generation) have not. What West Virginian's are opposed to is the exploitation they have experienced from the government / business relationship known as State-Capitalism.

Gary Rogers writes:

How much of this stems from the unions trying to justify their existence?

Sam Wilkinson writes:

There's more subtlety in the world than being pro-or-anti-capitalism. Anybody who looks at the history of "company towns" would conclude that they were overwhelmingly anti-competition. How you can endorse that sort of anti-capitalistic behavior while criticizing the opposition is absurd.

Sam writes:

Also, it is Fones-Wolf, if somebody cares to change the post. It's probably worth getting your opponent's name correct if you're going to criticize him.

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