Eric Schliesser (Ghent) responds here.

Some quotations:

Brennan implies that the folk who advocate the moral outsourcing argument are economic nitwits. Brennan’s ridicule surprises me because these government subsidies (food stamps, welfare benefits, medical care, etc.) do distort labor markets in all kinds of subtle ways as any moderately careful student of Hayek will tell you. (Not to mention that many of these subsidies distort lots of other markets, too.) Such government subsidies often get captured by rent-seeking industries and bureaucracies.

Well, not all of them are nitwits, but many of them are. The best evidence for this is just to go talk to people and see what their implicit labor economics is. Very few people are as sophisticated about economics as an introductory micro student getting a C average, let alone as sophisticated as Schliesser is.

More:

Either way, the moral outsourcing argument correctly notes that a non-trivial factor of production (labor) is being subsidized in a variety of ways and it raises the legitimate question who benefits from this. For all his appeal to more sophisticated economic concepts, Brennan misses this elementary economic observation.

Hmmm. At the same time, isn’t the consensus that welfare benefits generally disincentivize work and labor force participation to some degree because they lower the marginal benefits of getting a job? The disagreement is over how much such benefits discourage work and whether they are worthwhile anyways. Suppose the government decides to subsidize me at $200K a year in welfare benefits. Would that make it easy for Walmart to hire me at a pittance?* Probably not. Working at Walmart sucks [edit: for someone like me], and with that much guaranteed income from the government, you’d have to pay me much more to work. What if the government subsidizes me at $20K? I’d be willing to work at Walmart for a lot less then than I would if I were getting $200K in welfare benefits. Now suppose I can get no welfare benefits. Then I’d be more desperate, and I’d accept a lower wage from Walmart than I’d accept if I qualified for the $20K in benefits. Now, of course, the complication in this is that some welfare benefits are tied to work, and so it’s arguable that these benefits do reduce the wages that employers have to pay. (E.g., Suppose you qualify for $200K in benefits only if you have some job, any job. You might be willing to take the first job that comes along, at any wage. An employer might know that and thus offer you less.) I’m not sure I missed this, as Schliesser says, so much as purposefully, explicitly, and intentionally bypassed the complicated empirical questions of labor economics by stipulating what the economic facts were in order to focus purely on the moral question. So, I think Schliesser is not so much criticizing me as being in vigorous agreement with me.

More:

Is the employer’s duty exhausted by the wages (benefits, etc.) set within existing labor markets? Brennan ignores this question, which we can call the “moral question.” This is a shame because Brennan is a gifted political philosopher; he might have something interesting to say about the moral question if he were to address it seriously.

For the record, I don’t think that employers’ only duty (with regard to wages) is to pay whatever the market wage is. I accept that employers have duties to avoid exploitation, and that there are some other duties that kick in here and there that can affect what employers should pay. But my example with Bob was meant to push all these other concerns aside to focus on something that a great many people ignore–namely, that there are people who are not very productive, and it’s not clear why their employers should have to pay them a living wage if their labor isn’t as valuable as the living wage.

*There are cases where this kind of subsidy would make it easier for someone to hire me. E.g., I took the job at Georgetown, with the primary appointment in the business school, because I wanted the much higher salary that comes with being a business professor. I had some options in philosophy departments that were intrinsically very attractive–more attractive than my current job–but which paid much worse. If the government gave me a $200K minimum income, I would have taken a lower paying job at a particular philosophy department. But at the same time, the government subsidy makes it harder for Walmart to hire me. If I were broke and had no other options, I’d work at Walmart for whatever they pay. (It wouldn’t be the worst job I’ve had, that’s for sure.)

EDIT: Some people say, “No one who works full time should have make less than a living wage.” Let’s grant that for the sake of argument. But who should pay the living wage? I don’t think it’s automatically the employer’s job to do so. It might be society’s job instead.