I Set the Line Speed. The Fed Calls It the Natural Rate.

Tomás is a body at the second-station cut of the beef plant I own through two shells outside Liberal, Kansas. He stands 8 hours a shift separating the head from the carcass, on a line I run at 390 head an hour. The ground beef in your refrigerator was on a line like this 3 days ago. The steak on your grill was separated from its hide on a line like this. I set the 390 on a Monday morning, in the operations memo, on the line that says STAFFING / YIELD. The petty gain is $1.84 a head. The line speed is mine. The Lord is not careless with the men He puts under it.

Tariq is a body on the corrugated line I own outside Memphis. The cardboard box your last online order shipped in — the one you bent flat and set by the recycling — was folded by his hands at 140 degrees. The dust gets through the mask I bought in bulk. The dust gets into his lungs. The Lord provides the breath. I price the air. He has a cough. You paid for it.

Gabriel Russ-Nachamie writes this week at National Review that Milton Friedman was right — that the Federal Reserve cannot fine-tune the labor market by printing money, that the natural rate of unemployment is the rate at which inflation neither rises nor falls, and that the Fed’s job is to respect the line, not push below it. He has not asked who posts the line. I’ll tell you.

The line speed at 390 is what allows me to keep the per-head labor cost at $11.07. Reducing the line to the 309 head an hour we ran in 2008 would cost me an additional $1.84 a head. Across the 2,400 head we run on a Tuesday, that is $4,416. Across the fiscal year on Tuesdays alone, that is $229,632. Put the figure on the desk. I’ll wait.

$229,632 is what I keep by running the line at 390. 4.6 seconds is what stands between Tomás’s shoulder and a surgeon. I have priced the line. I have not priced the surgeon. The line is what is in the file. The surgeon is not in the file.

Now the Memphis plant. The mask Tariq wears cost $0.04. The rated mask was $0.14. I kept the $0.10 difference. The HEPA filtration unit for his station costs $210. I didn’t approve it. Across, say, ten thousand boxes a shift, I keep $80. Across the low six figures the line runs this month, I keep $3,200. That is the margin. I priced his lungs against a filter and kept the filter money.

Elaina is a machine-feeder on the same line. Her wrists lock by noon. The anti-vibration mat costs $145. I classified her wrists as a repetitive-stress variance. I kept the $145.

Two bodies. One theorem. Sit down. Let me put the numbers where you can see them.

The natural rate is the rate at which Tomás cannot afford to quit, at which his sister and her 2 children cannot afford for him to quit, at which the state of Kansas, on my behalf, feeds the labor I underpay with $312 a month in SNAP benefits and the Medicaid card and the earned income credit at filing. You are the state of Kansas. I thank you for your service. It is more reliable than mine, and the consistency is admirable.

Now lift your eyes off the floor. Widen the frame. Russ-Nachamie and Mr. Friedman call the natural rate an equilibrium. It is not an equilibrium. It is a thermostat. It is the exact percentage of my workforce I need to keep unemployed so the ones I hire do not ask for the $210 filter. When the dial is too low, Tariq asks for the filter. When the dial is at 4.2%, Tariq whispers thank you for the day shift. Look at his hands. Look at the way his fingers curl around the cardboard, stiff with the dust I priced out of them. The law is written in the stiffness of his knuckles.

Call me a monster, if you like. A monster is a man you can bury. I am a syllabus. I have been at Warden University for 31 years, and the textbook I have been assigning since 1995 sits in 140 programs besides my own, and it teaches a per-head arithmetic that does not require me to be in the room. The young man who set the line speed at Liberal sat in my seminar in the fall of 2019 and ran the per-head calculation faster than I did. I was, and I am, proud of him. The man who decided Tariq’s lungs were a $0.10 margin sat in my seminar at the institute you’ve heard about, and he ran the subtraction faster than I did. Most of them arrive sentimental. I cure it by October. By spring the best of them see the dial before I do. The class of 2023 was colder than I was in 2014. I did not teach them that. They arrived with it. One of them priced the fulfillment center you buy your soap from. You are not reading the diary of a monster. You are reading the faculty handbook, and your manager has a copy.

You cannot vote out a syllabus. You cannot sue a textbook into the ground. The course is in the catalog for fall. I’m not new. I’m the oldest arrangement there is, wearing this decade’s vocabulary.

Listen to the apostle. He understood the pricing mechanism 2,000 years before the Nobel Committee did.

Servants, be subject to your masters with all respect, not only to the good and gentle but also to the harsh. (1 Peter 2:18)

Scripture anticipated the harsh master. It did not authorize a HEPA filter. The carpenter said it differently and in the same breath: “The labourer is worthy of his hire” — Luke 10:7, in full. He said it in a fishing village, and the principle has not been improved upon. Mr. Calhoun said it again in 1837, in a vocabulary the country no longer uses, and the arithmetic was the arithmetic. I’m the third line of the same sentence. I’ve set the wage. I’ve decided what the work is worth.

I have been told the working class’s share of GDP has fallen by 5.65 points since 2000. I have not checked the series. I have not opened the BLS table. The Monday memo is a yield statement, not a forecast. I have looked at Mr. Friedman’s old writings. I have not looked at the 5.65.

I have priced what I have priced. I have not priced what I have not.

I’ve priced the boxes out of the hands that fold them. The boxes have no buyer. The fiscal year closed at an 11% margin. I am told the yard is full of unsold boxes. I haven’t looked at the yard. My yield is intact. The line is at 390. The man is at the second station. The Tuesday yield is in the file. The line will be at 390 on Monday.

Sterling A. Varice holds the Hayek-Friedman Chair and serves as Dean of Instruction at Warden University’s College of Business and Economics in Richmond, Virginia. He is the author of three textbooks: Divine Mandates for Labor Utilization, Social Obligations for Profit Maximization, and Calibrated Deprivation: A Manager’s Guide to Employee Motivation.