As Lord Freud's more illustrious ancestor pointed out, our unguarded comments can sometimes reveal our true sentiments. It's for this reason that his claim that some disabled people are "not worth the full [minimum] wage" has outraged so many.

At best, the statement is careless. Sam is entirely correct to say that there is a huge distinction between people's moral worth and the value of their labour; the existence of bankers suffices to prove this.

There are, though, two issues here.

First, some of our language and hence thought blurs what should be a considerable distinction. When we speak of wages as "earnings" we are importing a notion of moral worth into what is in fact an amoral exchange. Similarly the common but cringeworthy talk of a man being "worth" £x million equates wealth with moral standing. As Adam Smith said in his better book, we have a "disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition." (Theory of Moral Sentiments, I.III.28).

Secondly let's give Freud the benefit of the doubt, and assume that he meant that the labour of some disabled people is worth less than the minimum wage. (Giving him this benefit might be an example of what Smith meant, but let that pass.) Is he right? Should we relax the minimum wage to price them into work?

Such a view makes some sense if you think in terms of simple marginal productivity; there are some severely disabled people who can't do much. In the real world, however, the applicablity of marginal product theory is, ahem, dubious. As Lars Syll says (pdf):

Wealth and income distribution, both individual and functional, in a market society is to an overwhelmingly high degree influenced by institutionalized political and economic norms and power relations, things that have relatively little to do with marginal productivity in complete and profit-maximizing competitive market models - not to mention how extremely difficult, if not outright impossible it is to empirically disentangle and measure different individuals' contributions in the typical team work production that characterize modern societies...Remunerations, a fortiori, do not necessarily correspond to any marginal product of different factors of production.

The key phrase there is "power relations." Years ago, I had a summer job cleaning in a bakery. Two of my colleagues were what were euphemistically called "a bit simple." But they were actually good workers - not least because, unlike we students, they didn't think hard graft was beneath them. If Freud had his way, people like them would be badly paid not because they can't work, but because they lack the bargaining power to demand their economic worth. In this sense, the call to scrap minimum wage laws is - in practice - a green light for the exploitation of the most vulnerable. Better ways of helping the disabled would be ways of improving their bargaining power: stronger trades unions, full employment, a citizens' basic income.

It is for this reason - rather than any mis-speaking - that Freud should be condemned. Either he is too stupid to see that labour markets are saturated with inequalities of power, or he doesn't care. Whichever it is, his position as a minister merely vindicates Adam Smith:

In the drawing-rooms of the great, where success and preferment depend, not upon the esteem of intelligent and well-informed equals, but upon the fanciful and foolish favour of ignorant, presumptuous, and proud superiors; flattery and falsehood too often prevail over merit and abilities.