Thursday, October 11, 2007

Zapp, the Springer AG, the Pin Group and minimun wages (amv)

Yesterday I watched Zapp, usually a more or less insightful report on fads and fashions in media correspondence. Yesterday, however, Zapp reported on an alleged conspiracy by Springer AG, the German power-house of print and other media (including the most widely read BILD). Now, Zapp has "discovered" that newspapers published by Springer AG support the view that minimum wages (ceteris paribus) increase unemployment of low-skilled labour. Eureka! How could they! Of course, it is indeed surprising that somebody in Germany does attack the pseudo-romantic attitude towards minimum wages. Usually TV and print media alike (though the latter to a lesser extend) debauch the public, and tell them about their alleged "right" to a job and their "right" to a decent payroll. Don't get me wrong: it is interesting that Springer does defend the free market to protect their vested interest, since Springer is part of the pin group, a new postal service which already competes successfully against the old monopoly. Policy, however, attempts to introduce minimum wages for this sector ... it is a recent case of the old, old fact that companies which are for whatever reason unable to serve consumers best (like the Post AG) misuse the monopoly of power to keep competitors off their back. Minimum wages are not an instrument to avoid poverty or exploitation, but it is a privilege which the government grants to one at the expense of the other. It is indeed a pity that the Springer AG only states these facts because their own capital is at stake. But to suggest, as Zapp did, that any position against the minimum wage can only rest on capitalist resentment against workers interest is at best naive. In fact, let us turn this kind of ad-hominem argument against Zapp. Clearly, Zapp is part of the NDR-family which is mostly funded by government coercion! If vested interest is the only background we want to look at, the case is quite obvious: Zapp does not earn its money by serving the consumers best, by struggling against competitors for the highest profit on the market. It rather legitimates itself by the pretence to educate you and me, and if we do not want to pay their payrolls, that is, if we do not want to be educated by the NDR, we are simply forced to do so (GEZ!). Is this a more moral position than Springer’s, which depends totally on the consumer's willingness to by their products, voluntarily? And is there no vested interest inside the NDR to keep government intervention strong, since they are themselves protected by the government? Indeed, if the NDR would claim that the Post AG has no right to government favouritism, on what ground could it defend its own privileges granted by government coercion against the public? If anything, vested interest can be found on both sides and it is only economic theory which can objectively clarify that, other things being equal, minimum wages cause unemployment, and that those who are supposedly protected (and those who are mobilized to vote for those parties which promise their best and highest protection), are indeed worse off, the losers, while those who made use of the monopoly of power to protect their interests are the only winners of the game (in this case the Post AG).