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I owe my soul to the company store.5

My dad sang this song to me growing up; I use it with my own children as a lullaby. (The song was actually written by Merle Travis, whose version I prefer to Ford’s. I only know this because I found it among the millions of choices on iTunes.)

Coal companies cannot lawfully pay wages in scrip any longer. It even may have been illegal to pay Abby in scrip back in the 1960s, when I saw Noona carrying her coupon books.6 Scrip was outlawed because it was exploitative. The power the coal company exerted over its employees was too great.

But notice something. The scrip system was not a market perversion but its perfection. No one was coerced, and economists would say that no one was acting irrationally. The coal miners were not prisoners—they could quit at any time. And because they were acting voluntarily, the theory is that they were better off working for scrip than whatever the alternative was, which probably was not working at all.

This is why economic reasoning often seems obtuse and out of touch. To say that coal miners in the days of scrip and debt servitude were acting voluntarily is a misunderstanding of what “voluntary” means. There was coercion everywhere. Miners were not prisoners marched at gunpoint to the mines. But Abby had to feed his family; there were few other jobs to be had, and no better ones for someone with his skills; he had no way to move on; and the wage came in the amount and form the company offered. “Take it or leave it” is not a real choice when “leave it” is not an option. Abby was in the same boat as Henry Lamson—he of the hatchet-in-the-head case in chapter one.

Abby’s example shows why markets do not necessarily provide a way for people to improve their lot. They simply enable people to engage in exchanges. Those exchanges inevitably benefit the parties that are already more economically powerful, because they can extract more from the exchange. If you have little economic power, there is nothing inherent in the market exchange that makes you better off than before. All an exchange ensures is that the deal you “voluntarily” agree to is better than your other options. If you have no other options, then an exchange can make you worse off. You can spiral downward, little by little, as the unfavorable exchanges add up. You have to make some kind of deal, and all the choices are bad. There is nowhere else to sell your labor, nowhere else to go, and no way to subsist on air and dirt.

In other words, if you’re given a choice between being pushed down an open elevator shaft or pushed down a staircase and you rationally pick the latter, it doesn’t mean that you weren’t pushed, aren’t going down, and won’t get hurt on the way to the bottom.

3.

Markets are amoral. There is no good or evil in markets, no just or unjust. There is only “willing and able to pay for” and “not willing and able to pay for.” You don’t get out of markets what you deserve—you get what you can negotiate for, based on the information you have and what you have to offer in exchange. And if you don’t have much or know much, you don’t get much.

Your wage is not based on what you need but on what your employer is willing to pay you. And your employer’s willingness to pay may not depend on the added value you create for the company. If markets have their say, your wage would depend not on what you produce but on how much the company would have to pay your replacement. If you’re a coal miner, your wage does not depend on the value of the coal you dig but on what the company would have to pay the guy standing outside the gate looking for work. If you’re an associate at a law firm, you make the market rate for associates, not what the firm bills from your work. And if you’re a recent liberal arts graduate, you might be lucky to make a couple bucks an hour plus tips at Joe’s Crab Shack. Wages are competitive only in a competitive market, and a worker is not guaranteed anything other than what he or she can get by threatening to walk away.

This applies whether we