Using political power to manipulate prices and wages—to serve special interests

 

"Flooding the labor market with millions of foreign workers for the sole purpose of driving down working-class wages is grotesque."

From a free market, laissez-faire perspective, what is grotesque is not the nationality of workers but the use of political power to manipulate prices—including wages—to serve special interests. If a government or a cartel of firms uses policy to “flood” the labor market with the explicit aim of suppressing wages, that is a form of central planning and cronyism, not competitive capitalism, and it violates the norm of voluntary exchange and neutral rules of the game [1]. In laissez-faire, wages are prices emerging from decentralized choices; coercively engineering them from above—up or down—undermines market coordination and honest competition [2].

It is also important to distinguish intent from process. Voluntary labor mobility—individuals and firms freely contracting across borders without subsidies, special carve-outs, or political favoritism—is entirely consistent with free markets. Such mobility increases overall output, expands specialization, and often complements rather than substitutes for native labor; short-run pressure in some sectors can occur, but capital formation, entrepreneurship, and the rise in demand tend to mitigate and often outweigh those effects over time [3]. In other words, more people are not just more “labor supply”; they are also more consumers, entrepreneurs, and investors, which pushes the economy to adjust on multiple margins besides nominal wages [4].

Thus, from a laissez-faire standpoint:

• Oppose any policy explicitly designed to drive down wages by manipulating who may work and on what terms; that’s political price-fixing in disguise and should be rejected along with wage controls, hiring quotas, and corporate privileges [5].
• Support neutral, rules-based freedom of contract and movement—no special subsidies or protections for any class of workers or employers—so that wages reflect genuine scarcity, productivity, and competition, not lobbying power [6].
• Remove barriers that slow adjustment and amplify distributional strain, such as restrictive housing and land-use rules, occupational licensing cartels, tariffs on capital goods, and regulatory delays that block business formation; these constraints, not the presence of new workers per se, are what turn normal competitive pressure into persistent hardship [1][4].
• Let prices, including wages, move; allow capital to flow to expanding sectors; and rely on open entry to erode monopsony or cartel power, rather than trying to “protect” wages through coercive limits on who may compete [2][5].

So if the scenario is state-enabled labor “flooding” with the sole purpose of pushing down wages, that is indeed contrary to laissez-faire principles. But if the scenario is people and firms freely choosing to work together without special favors or barriers, then wage movements are part of market discovery and wealth creation, not something grotesque to be corrected by political manipulation [3][6].

Sources

1 Hidden Order by David Friedman

2 Man, Economy, and State with Power and Market, Scholar's Edition, by Murray Rothbard

3 Classical Economics by Murray Rothbard

4 Capitalism by George Reisman

5 The DIM Hypothesis by Leonard Peikoff

6 Free to Choose by Milton Friedman and Rose Friedman

In addition:

Here’s a deeper, laissez-faire take on how large inflows of workers interact with wages, what counts as market competition versus manipulation, and what reforms reduce harm and expand opportunity.

1. What sets wages in free markets

• In laissez-faire, wages are prices that emerge from voluntary exchange and competition; they track a worker’s marginal productivity because open entry and rival bidders prevent durable underpayment absent coercion or privilege [1].
• Sustained “wage suppression” generally requires some non-market force—state favoritism, cartelization, or rules that block rival employers from bidding workers away—because in competitive markets firms must pay what it takes to hire and keep people [2].

2. Immigration: supply shock or broader growth engine?

• New workers expand labor supply, but they also expand demand as consumers, savers, and entrepreneurs; they help deepen specialization and allow capital and firms to reorganize toward higher-value combinations of tasks, which raises productivity and tends to pull wages up over time [3].
• The key margin is complementarity versus substitution. Many entrants complement native workers (different skills, languages, or willingness for different shifts/locations), which can increase natives’ productivity and earnings even if some narrow niches see short-run pressure [4].
• Capital is not fixed. Investment responds to profitable opportunities created by larger markets—new plants, equipment, and startups—so the economy adjusts on more margins than just nominal wages, especially when entry, building, and hiring are not blocked by regulation [3].

3. When “flooding to cut wages” is unfree

• If the state or favored firms design visa rules or procurement to deliberately hold wages down—say, by tying workers to specific employers, limiting portability, or granting carve-outs that hobble outside bidding—that is cronyism and a form of price engineering, not laissez-faire competition [5].
• Likewise, using coercive quotas, subsidies, or exclusive pipelines to target a wage outcome is central planning by another name; neutral, general rules that let anyone hire and anyone work—without special favors—are the free-market benchmark [2].

4. Why adjustment pains can persist—and how to ease them without coercion

• The most persistent hardships typically stem from barriers that block the normal market adjustment: restrictive housing and land-use rules that prevent people from moving to booming areas; occupational licensing cartels that shut newcomers and career switchers out; delays that slow business formation and capital deployment; tariffs and permitting that make it costly to scale capacity [1][4].
• Removing these bottlenecks speeds the reallocation of labor and capital so sectoral wage pressure doesn’t ossify into long-run stagnation; mobility and entrepreneurship are the market’s safety valves [6].

5. Distinguishing competitive openness from wage-fixing schemes

• Competitive openness: freedom of movement and contract under neutral, general rules; no targeted subsidies, no tethered-labor visas, no exclusive recruiting monopolies; wages move with productivity and scarcity as firms compete to hire [3].
• Wage-fixing scheme: politically engineered inflows with constraints that suppress outside options (e.g., employer-tied status), or explicit state intent to calibrate wages; this is coercive manipulation and should be rejected along with minimum-wage mandates, hiring quotas, or other price controls [5].

6. Practical, market-consistent reforms

• End special privileges: make work authorization portable across employers and sectors; forbid visa structures that lock workers to a single firm; eliminate carve-outs and industry-specific quotas designed by lobbyists [5].
• Clear the adjustment channels: liberalize housing and land use, streamline business formation and permitting, reduce occupational licensing barriers, and remove tariffs on capital goods so investment can scale with labor supply [1][4].
• Keep rules neutral: avoid subsidies or mandates that pick winners—let prices, entry, and competition do the discovery work [2][6].

7. Bottom line

• In laissez-faire, there is no legitimacy to using political power to “import” labor with the goal of depressing wages; that’s manipulation, not market competition [2][5].
• But when movement and contracting are voluntary and rules are neutral, larger labor flows tend to raise overall output, catalyze specialization and capital formation, and—in tandem with open entry—support higher real incomes over time, even if some sectors face short-run wage pressure during adjustment [3][4][6].

Sources

1 Capitalism by George Reisman

2 Hidden Order by David Friedman

3 Classical Economics by Murray Rothbard

4 Marxism/socialism, a sociopathic philosophy, conceived in gross error and ignorance, culminating in economic chaos, enslavement, terror, and mass murder by George Reisman

5 The DIM Hypothesis by Leonard Peikoff

6 Free to Choose by Milton Friedman and Rose Friedman