Capitalism fundamentally means a free economic system in which property is protected and contracts devoid of force relationships. America was the bastion of such a system from its inception, but time has a way of changing things.
In a free system, employees freely contract with their employers, coming to terms of mutual agreement for compensation. In America’s new system, when employees disagree about wages, overtime, time off, or any kind of working condition, lawyers come to the rescue!
Case in point: Wal-Mart was just strong armed out of $640 million by a team of lawyers in a settlement of 63 wage-related lawsuits.
Complaints included “forcing employees to work unpaid off the clock, erasing hours from time cards and preventing workers from taking lunch and other breaks that were promised by the company or guaranteed by state laws.”
The perversion is the use of the word “force” in the list of complaints. America is not a slave or feudal based society, yet. At any point at which a worker feels exploited he can walk away from the job. Unless there is a long-term contract whose terms an employer breaches, there is no use of force or ethical recourse to forcing a company to pay you more than they’d like.
Apparently, however, there is legal precedent to do so, but this is not Capitalism. This is plunder. Class action lawsuits drain more than $246 billion from the economy every year, not including indirect costs such as effects of layoffs and bankruptcies, and lost opportunity costs.
And if you think justice is being served by this nonsense, just take a look at compensation structures. A class action lawsuit is one in which a group of lawyers rounds up large numbers of supposedly injured parties; in the case of Wal-Mart it is roughly 100,000 employees. Ever see advertisements by law firms soliciting “injured parties”? They do this for your benefit, right?
Legal fees typically run between 33-40%. So in the Wal-Mart’s $640 million settlement, we can expect lawyers to walk away with about $210 million for their noble efforts, while each employee gets upwards of $4,300. How generous of these lawyers!
It sounds nice to say that Wal-Mart is paying all this money, but there is no such thing as Wal-Mart-just a collection of shareholders, employees, and consumers-this plunder is taken from each stakeholder in some fashion.
Why do you think health care costs are so high in America? Hint: lawyers. As more lawyers (i.e. politicians) move towards socializing health care costs (universal health care), claiming they will drive costs down by doing so, think again.
Real cost drivers are not even discussed. Rather, politicians talk about levying the cost burden onto different people…again, how noble! An honest discussion of decreasing costs, and increasing access and quality needs to involve tort reform, relaxing licensure restrictions, liberalizing regulatory barriers to practice, dropping inter-state commerce barriers for insurance, and getting rid of legislative mandates for employer-insurance schemes that proliferate monstrous HMO’s and behave as cost maximization vehicles.
All in all, this new path of crony Capitalism in which lawyers buzz around business people like hornets, lobbying for one new set of legislative rules after another, plundering at will, does not bode well for a healthy future. America once stood as a bastion of freedom and hope for the world. We would be wise to critically re-evaluate our fundamental assumptions, getting to the root cause for the rot that has gripped our society.
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