laliberty said: "he also wants whats best for the customer and this is it." Even if that were true, it needn't be mandatory. You seem to have missed the point of the post. A company that doesn't do what's best for the customer will eventually lose to a competitor who does.
Not always, some companies have become quit good at thriving when they do not do what is best for the customer. If they can provide a dangerous product for less, but can hide its dangerousness, they are extremely capable of not loosing. And if its not mandatory, everyone will go for the cheaper option, and the consumer will end up loosing. And eventually can be an awfully long time, or even an indefinite amount of time.
This is an analysis which assumes people to be so incredibly stupid and unconcerned with their wellbeing that only well-meaning and unselfish government agents (who are as cryptozoological as six-armed unicorns) can, with threats of violence, help them from themselves. It also ignores the fact that the very monopoly you support is how many businesses can get away with precisely what you fear.
In a climate in which government does not protect businesses both from liability for such fraudulence or from competitors who wish to expose and capitalize on said fraudulence, such a scam would be short-lived and heavily-punished. The fact that this isn’t the current climate isn’t cause to double down on the reason it isn’t the current climate in the first place.
outragedbygovernment said: What solution would you propose in place of raising the minimum wage? The $10.10 is for federal employees. Connecticut passed a hike of 5% a year, ending at $10.10 by 2017. I take it you are opposed to the concept of a mandated minimum wage. Or do you think that all minimum wage workers are lazy and sponging off the gov't? Maybe you should try and work a minimum wage job and see what it is like tying to make ends meet.
What solution would you propose in place of raising the minimum wage?
Repealing all minimum wages and not making it illegal for low-skill workers to get jobs at their productivity level. Allowing people to make decisions for themselves, and not forcing workers into unemployment because they lack sufficient skills, talent, and productivity to be employable at the new wage.
I take it you are opposed to the concept of a mandated minimum wage.
You don’t have to “take it” or assume anything when I have specifically responded to you with various links stating exactly that.
Or do you think that all minimum wage workers are lazy and sponging off the gov’t?
That’s not at all an argument made against the minimum wage. It is an argument some make against welfare recipients, but the argument against the minimum wage has nothing to do with laziness or “sponging off government.” In fact, those who make minimum wages tend to be among the least lazy of all marginal workers; hence why they are employed and others are not. And it is the victims of the minimum wage - that is, those who are unable to find employment above the artificial price floor - who tend to turn to government benefits and welfare and become “sponges” at taxpayer expense.
Maybe you should try and work a minimum wage job and see what it is like tying to make ends meet.
Maybe you should try to be unemployed and see what it is like trying to make ends meet. Because that’s what minimum wages do: create unemployment.
On net, minimum wages do not help poor people, it hurts them. It makes less of them employable and it drives up prices on exactly the type of products they tend to buy since those products typically rely on minimum wage employment. Employers hire fewer people, they switch to automated systems that depend on less labor, and (for those who still manage to maintain employment) they decrease other benefits and comforts to minimum wage employees to offset their newly elevated costs. Perhaps you should read or consider the moral and economic rationale against the minimum wage before you charge in with your pathos and straw men.
More on minimum wage here.
I read a few of this guy’s posts, he’s basically advocating wage slavery.
Freedom is slavery? Where have I heard that one before?
He also fails to take into account the fact that people who earn more money also spend more money. I cite the 2012 Economics Policy Institute study into modelling the effects of a $10.10 minimum wage, which concluded the most likely outcome would be a *gain* of over 100,000 jobs.
I respond to a variant of this economic fallacy in a post linked to above. Here it is for your reference. Your disinterest in properly vetting my position does not constitute my “failing to take into account” the false premise presented. In fact, it is you who fail to take into account that the additional money spent by those who are employed at the higher wage come essentially from the money that would have been spent by those who are now unable to find employment at the new rate.
Moreso, here is a University of Warwick paper investigating the impact the introduction of the minimum wage had on the UK had on employment. It concluded that the statistical impact was insignificantly different from zero- i.e. it had fuck all impact on employment prospects.
Such papers and other studies have been addressed ad nauseam. See here, here, here, here, here, and here for just the most recent posts on the subject. In short, the best these studies can present is minimal *additional unemployment that is close to zero. That’s the best case scenario with numbers and controls all tweaked in favor of such a bias.
A lot of the advocacy for not raising or abolishing the minimum wage is being directly spread as misinformation with the singular target of convincing people that a wage rise will not be in their best interests, that the economy cannot handle it, that it will cause job losses, that they don’t deserve it. In reality, it just boils down to simple corporate greed.
Ridiculous, particularly the “don’t deserve it” canard. Instead, we actually advocate for all marginal workers (that is all poor people), even for those with the least productivity or employability. That is starkly contrasted against those who support minimum wages, who instead only advocate for those individuals whose productivity is above the arbitrarily-selected level. To that end, I must ask: where is your compassion?
You claim you’ve read some of my posts. I ask that you do so again. Maybe something will stick this time.
“Jon Stewart is very, very afraid of of us, apparently. Several emailers have written to inform me that Stewart did a small hit/smear job on Judge Andrew Napolitano on The Daily Show last night. The ‘hit’ was about how the Judge [said] that the U.S. probably could have ended slavery the same way that New York, Massachusetts, New Hampshire, Maine, New Jersey, Illinois, Pennsylvania, and all the other Northern states did, as well as the British empire, Spanish empire, the French, Danes, Dutch, Swedes, and others during the nineteenth century, namely, peacefully. (See Jim Powell, Greatest Emancipations: How the West Ended Slavery; and Joanne Pope Melish, Disowning Slavery: Gradual Emancipation and Race in New England, 1780-1860). No, no, said Stewart and pals, 750,000 dead Americans , more than double that number maimed for life, and the total destruction of the voluntary union of the founders was the only way to go. Southerners, six percent of whom owned slaves, ‘were willing to die to preserve slavery’ announced the renowned historian Jon Stewart. The Great Oz (er, I mean, The Great Abe) did what was necessary said the great historical sage and his cast of clowns.”
Thomas J. DiLorenzo (via eltigrechico)
LTMC: Notwithstanding the merits of this argument, Napolitano did a pretty poor job making his case. Many of the things he said were demonstrably false. He claimed that Lincoln never tried compensated emancipation. That’s wrong. He also claimed that the civil war was not necessarily about slavery. This is a line of thinking that has long been discredited by the historical record. The vice president of the Confederacy expressly mentioned slavery as a justification for the new Government in his 1861 Cornerstone Speech. The cessation declarations of numerous southern states mentioned it. The Constitution of the Confederate States of America expressly mentions it. Most people who were alive at the time also understood this to be the case. As Charles Sumner stated in a speech on the floor of the U.S. senate in 1860:
[T]here are two apparent rudiments to this war. One is Slavery and the other is State Rights. But the latter is only a cover for the former. If Slavery were out of the way there would be no trouble from State Rights.
Historians are basically on the same page here. As Princeton Historian James McPherson notes:
Scholars today are mostly of one mind about why South Carolina seceded and what caused the war. But Americans, even a century and a half later, still deeply disagree with each other and historians, many of them embracing a Civil War story about self-government and “states’ rights” that reveals more about America in 2010 than what actually occurred in the 1860s.
There are other reasons to hate Abraham Lincoln—like the suppression of freedom of the press and the suspension of Habeas Corpus. I would definitely agree that he gets more credit than he deserves. But Napolitano completely butchered the facts on this one. I’m sure there’s a more resilient case to be made that the civil war was unnecessary. But Napolitano failed to make it.
1. Re: compensated emancipation:
DiLorenzo has noted: “Lincoln did pay lip service to various compensated emancipation plans, and he even proposed a compensated emancipation bill (combined with colonization) in 1862. But the man whom historians would later describe as one of the master politicians of all time failed to use his legendary political skills and rhetorical gifts to accomplish what every other country in the world where slavery had once existed had done; end it peacefully, without resort to warfare.”
Furthermore, slavery was in decline not just throughout the world but even in the states: “Slavery was already in sharp decline in the border states and the upper South generally, mostly for economic reasons … there is evidence that there was growing political support within the border states for gradual, peaceful emancipation that would have ended slavery there.”
2. Re: civil war was necessarily about slavery:
You point to Alexander Stephens’ speech as evidence that the civil war was necessarily about slavery, but (1) his speech was about secession not war, and (2) slavery was one of a number of elements of that speech. You also point to the Confederate constitution, but again it was only one element among many others (just as in the U.S. constitution - which included important recognitions of freedom alongside an approval of slavery). There is no doubt that it was a contributing factor in the call to secession, perhaps a key factor - and no one denies its deplorable nature. But it was not the reason for war.
"If there be those who would not save the Union, unless they could at the same time save slavery, I do not agree with them. If there be those who would not save the Union unless they could at the same time destroy slavery, I do not agree with them. My paramount object in this struggle is to save the Union, and is not either to save or to destroy slavery. If I could save the Union without freeing any slave I would do it, and if I could save it by freeing all the slaves I would do it; and if I could save it by freeing some and leaving others alone I would also do that. What I do about slavery, and the colored race, I do because I believe it helps to save the Union; and what I forbear, I forbear because I do not believe it would help to save the Union.”
His only concern was to “save the union.”
In his first inaugural address, Lincoln’s very first order of business was to firmly reiterate his defense of the “right” of southerners to own slaves:
Apprehension seems to exist among the people of the Southern States that by the accession of a Republican Administration their property and their peace and personal security are to be endangered. There has never been any reasonable cause for such apprehension. Indeed, the most ample evidence to the contrary has all the while existed and been open to their inspection. It is found in nearly all the published speeches of him who now addresses you. I do but quote from one of those speeches when I declare that—
I have no purpose, directly or indirectly, to interfere with the institution of slavery in the States where it exists. I believe I have no lawful right to do so, and I have no inclination to do so.
Those who nominated and elected me did so with full knowledge that I had made this and many similar declarations and had never recanted them; and more than this, they placed in the platform for my acceptance, and as a law to themselves and to me, the clear and emphatic resolution which I now read:
Resolved, That the maintenance inviolate of the rights of the States, and especially the right of each State to order and control its own domestic institutions according to its own judgment exclusively, is essential to that balance of power on which the perfection and endurance of our political fabric depend; and we denounce the lawless invasion by armed force of the soil of any State or Territory, no matter what pretext, as among the gravest of crimes.
I now reiterate these sentiments, and in doing so I only press upon the public attention the most conclusive evidence of which the case is susceptible that the property, peace, and security of no section are to be in any wise endangered by the now incoming Administration”
He even went so far as to claim no objection to the Corwin Amendment - a proposed amendment that would have made the question of slavery a state issue of which the federal government could not interfere with - being made “express and irrevocable law”:
I understand a proposed amendment to the Constitution—which amendment, however, I have not seen—has passed Congress, to the effect that the Federal Government shall never interfere with the domestic institutions of the States, including that of persons held to service….holding such a provision to now be implied constitutional law, I have no objection to its being made express and irrevocable.
Yet, he was already discussing war with regards to keeping the union together - arguing to let differences in this question of slavery slide so as to not divide it:
One section of our country believes slavery is right and ought to be extended, while the other believes it is wrong and ought not to be extended. This is the only substantial dispute. The fugitive-slave clause of the Constitution and the law for the suppression of the foreign slave trade are each as well enforced, perhaps, as any law can ever be in a community where the moral sense of the people imperfectly supports the law itself. The great body of the people abide by the dry legal obligation in both cases, and a few break over in each. This, I think, can not be perfectly cured, and it would be worse in both cases after the separation of the sections than before. The foreign slave trade, now imperfectly suppressed, would be ultimately revived without restriction in one section, while fugitive slaves, now only partially surrendered, would not be surrendered at all by the other.
Physically speaking, we can not separate. We can not remove our respective sections from each other nor build an impassable wall between them. A husband and wife may be divorced and go out of the presence and beyond the reach of each other, but the different parts of our country can not do this. They can not but remain face to face, and intercourse, either amicable or hostile, must continue between them. Is it possible, then, to make that intercourse more advantageous or more satisfactory after separation than before? Can aliens make treaties easier than friends can make laws? Can treaties be more faithfully enforced between aliens than laws can among friends? Suppose you go to war, you can not fight always; and when, after much loss on both sides and no gain on either, you cease fighting, the identical old questions, as to terms of intercourse, are again upon you.
And while many southerners believed in the superiority of the white race, so did many northerners - including Lincoln himself who said in his debate with Stephen Douglas in 1858:
“I as much as any man want the superior position to belong to the white race.”
So “state’s rights” was not a cover for preserving slavery per the popular narrative that Sumner suggested, it was ending slavery that was a cover for fighting a war.
3. Re: a more resilient case to be made that the civil war was unnecessary:
The case, to me, is obvious. Take the above Lincoln letter to Greely and replace “Union” with “marriage” - substituting one form of voluntary human association with another. Is a man justified in beating his wife to keep her from leaving him if her reasons are deplorable? Are marriages expected to exist “in perpetuity”?
Further, how would a voluntary association among one group of people be seen as legitimate in forcing subsequent generations into irrevocable association? Lysander Spooner, the great slavery abolitionist, made the case both against the war and in favor of consent in 1867:
On the part of the North, the war was carried on, not to liberate slaves, but by a government that had always perverted and violated the Constitution, to keep the slaves in bondage; and was still willing to do so, if the slaveholders could be thereby induced to stay in the Union.
The principle, on which the war was waged by the North, was simply this: That men may rightfully be compelled to submit to, and support, a government that they do not want; and that resistance, on their part, makes them traitors and criminals.
No principle, that is possible to be named, can be more self-evidently false than this; or more self-evidently fatal to all political freedom. Yet it triumphed in the field, and is now assumed to be established. If it really be established, the number of slaves, instead of having been diminished by the war, has been greatly increased; for a man, thus subjected to a government that he does not want, is a slave. And there is no difference, in principle —- but only in degree —- between political and chattel slavery. The former, no less than the latter, denies a man’s ownership of himself and the products of his labor; and [*iv] asserts that other men may own him, and dispose of him and his property, for their uses, and at their pleasure.
Previous to the war, there were some grounds for saying that —- in theory, at least, if not in practice —- our government was a free one; that it rested on consent. But nothing of that kind can be said now, if the principle on which the war was carried on by the North, is irrevocably established. …
The principle that the majority have a right to rule the minority, practically resolves all government into a mere contest between two bodies of men, as to which of them shall be masters, and which of them slaves; a contest, that —- however bloody —- can, in the nature of things, never be finally closed, so long as man refuses to be a slave. …
The number who actually consented to the Constitution of the United States, at the first, was very small. Considered as the act of the whole people, the adoption of the Constitution was the merest farce and imposture, binding upon nobody.
The women, children, and blacks, of course, were not asked to give their consent. In addition to this, there were, in nearly or quite all the States, property qualifications that excluded probable one half, two thirds, or perhaps even three fourths, of the white male adults from the right of suffrage. And of those who were allowed that right, we know not how many exercised it.
Furthermore, those who originally agreed to the Constitution, could thereby bind nobody that should come after them. They could contract for nobody but themselves. They had no more [*5] natural right or power to make political contracts, binding upon succeeding generations, than they had to make marriage or business contracts binding upon them.
Still further. Even those who actually voted for the adoption of the Constitution, did not pledge their faith for any specific time; since no specific time was named, in the Constitution, during which the association should continue. It was, therefore, merely an association during pleasure; even as between the original parties to it. Still less, if possible, has it been any thing more than a merely voluntary association, during pleasure, between the succeeding generations, who have never gone through, as their fathers did, with so much even as any outward formality of adopting it, or of pledging their faith to support it. Such portions of them as pleased, and as the States permitted to vote, have only done enough, by voting and paying taxes, (and unlawfully and tyrannically extorting taxes from others,) to keep the government in operation for the time being. And this, in the view of the Constitution, they have done voluntarily, and because it was for their interest, or pleasure, and not because they were under any pledge or obligation to do it. Any one man, or any number of men, have had a perfect right, at any time, to refuse his or their further support; and nobody could rightfully object to his or their withdrawal.
In any case, even if ending slavery was the object, preserving the union as it existed prior to southern secession was, at best, unnecessary - even if allowing the natural death of slavery was considered not immediate enough.
Naturally, force - even lethal force - is justified against a violent aggressor. There are few greater aggressions than that of slavery. Ergo, slaves were justified in using lethal force to end the aggression from those who considered themselves their masters. Furthermore, the principle is well established that others may come to aid a victim of aggression from his or her aggressor. In short, it would be completely justified for a slave, or a non-slave in the aid of a slave, to kill a slave owner.
So even accepting that armed force targeted against slave owners is justified, it does not follow that (1) full scale war (with, in addition to the expected destruction and waste, the ugliness that comes with war such as civilian deaths, collateral damage, razing towns, and raping women, etc. - perpetuated by the ostensible emancipators) was necessary since such action was unnecessary everywhere else in the world, including places with far greater and long-standing histories of employing slave labor. It also does not follow that (2) the re-establishment of the union was a necessary next step. Even if war broke out as a consequence of northerners assisting in the escape and emancipation of slaves, it still did not necessitate hundreds of thousands dead and the conquest and re-absorption of southern states.
It is unfortunate that this must be stated, but considering the usual replies: None of this should be interpreted as support of slavery whatsoever, nor support for the Confederacy. I have no sympathy for slave-owners or states of any kind. I am anti-slavery for the same reasons I am anti-war and anti-state. Every human being is sovereign in his or her own peaceful affairs, and ultimately it is consent that is the foundation of a civilized society. As such, what I support is the fundamental freedom of association: the ability of one to interact with another using his or her person or property in any peaceful, consensual manner the interacting parties choose. Not only is this just, it is also the most effective means for disparate individuals with subjective preferences - different desires, wants, histories, cultures, families, talents, disabilities, worries, concerns, allergies, principles, fears, goals, tastes, vices, etc. - to achieve our varied ends. Secession, thus, is a natural extension of this right.
Many economists disagree with the “Austrian” definition of inflation because it lacks a few important considerations. Before defining inflation, it is important to define relative prices.
The scare quotes around “Austrian” clue me in on what kind of discussion this will be. You mention monetarist, Keynesian, and neo-classical later - with no scare quotes around those. Noted.
After reading what Dan linked, I realized that at the root of the Austrian definition of inflation is their belief that an increase in M necessarily leads to increases in prices.
Again, if I print up a bunch of currency and sit on it, there has been an increase in the money supply but there would be no increase in the general level of prices.
So if an increase in the money supply (inflation) doesn’t lead to a general increase in prices (price inflation) then inflation doesn’t actually seem bad because price inflation is what erodes real savings, wages, and creates other intertemporal distortions.
Austrians do not claim that an increase in M necessarily leads to price inflation under any and all conditions. Instead, we assert that it tends to. But if - like you explain - the new money is not actually introduced into the economy (which includes even non-circulated money since there would be a reasonable expectation that it eventually will be. After all, what purpose is served by money that earns no interest, is not counted as a store of value, and is never exchanged?) or if demand for the money increases enough to offset the new supply, then that may not necessarily lead to price inflation.
Mises, in his Theory of Money and Credit, built that demand caveat right into his definition of inflation:
In theoretical investigation there is only one meaning that can rationally be attached to the expression Inflation: an increase in the quantity of money (in the broader sense of the term, so as to include fiduciary media as well), that is not offset by a corresponding increase in the need for money (again in the broader sense of the term), so that a fall in the objective exchange-value of money must occur.
Hazlitt, in What You Should Know About Inflation, offered this caveat by framing it in terms of the supply of goods that money would be used to exchange for:
When the supply of money is increased, people have more money to offer for goods. If the supply of goods does not increase — or does not increase as much as the supply of money — then the prices of goods will go up.
Indeed, Hazlitt later stated as true that “to attribute [price] inflation solely to an increase in the volume of money is ‘oversimplification.’” And went on to provide other means with which money can be made to change in value.
The value of money, like the value of goods, is not determined by merely mechanical or physical relationships, but primarily by psychological factors which may often be complicated.
Also, Hazlitt noted that an expectation in a change in the supply of money can also lead to changes in prices:
It is also an oversimplification to say that the value of an individual dollar depends simply on the present supply of dollars outstanding. It depends also on the expected future supply of dollars. If most people fear, for example, that the supply of dollars is going to be even greater a year from now than at present, then the present value of the dollar (as measured by its purchasing power) will be lower than the present quantity of dollars would otherwise warrant.
Rothbard, in What Has Government Done to Our Money?, explained that the process of new money entering and circulating through the economy is what drives price inflation:
[After the first creators] take the newly-created money and use it to buy goods and services… The new money works its way, step by step, throughout the economic system. As the new money spreads, it bids prices up—as we have seen, new money can only dilute the effectiveness of each dollar.
So it is only under certain conditions (which, ultimately, are nearly all real-world conditions) in which monetary inflation “necessarily” leads to price inflation. When Austrians use the terms inevitable and necessarily, as Mises does here, it is by implicitly assuming - as all economists tend to - ceteris paribus conditions:
Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term `inflation’ to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation… . As you cannot talk about something that has no name, you cannot fight it. Those who pretend to fight inflation are in fact only fighting what is the inevitable consequence of inflation, rising prices. Their ventures are doomed to failure because they do not attack the root of the evil. They try to keep prices low while firmly committed to a policy of increasing the quantity of money that must necessarily make them soar. As long as this terminological confusion is not entirely wiped out, there cannot be any question of stopping inflation.
Again, the new money must be introduced into the economy (or recognized to exist and therefore expected to be used) and demand for this new money must not increase commensurate to the new supply. Only under these conditions can the “Austrian definition of inflation” be said to state that an increase in the money supply necessarily leads to an increase in price inflation.
What we do explain is that price inflation is a primary consequence of monetary inflation and, conversely, that monetary inflation is the true cause of price inflation (Austrians are usually careful to distinguish between such inflation and mere changes in prices). Not many years ago, this was mostly an uncontroversial and pretty universally accepted truth. Indeed, many Keynesians and Monetarists today will claim a “target” for price inflation (usually 2% or 4% or some ostensibly innocuous - and ultimately dubious - figure) and flatly recognize that the central bank’s mechanism for monetary expansion is precisely the primary means to that end. Austrians, like other economists, understand that price inflation is the goal of monetary policy.
Side note: Disney uses union labor.
True. And also contextually irrelevant.
Not really. You were commenting on how long it takes unionized labor to do anything (i.e the roads) while using the example of unionized labor doing a fantastic job (Disney).
Read it again. The specific issue discussed is government monopoly.
- $3.98 for natural disaster relief through FEMA
- $6.96 for welfare
- $22.88 for unemployment
- $36.82 for food stamps through SNAP
- $43.78 for retirement/disability for government workers (civilian/military)
- $235.81 for YOUR Medicare
- $247.75 for defense
- and $4,000.00 for corporate subsidies
Are you sure you are pissed off at the right people?
"Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power." — Benito Mussolini
This breakdown is completely fabricated.
The figures I looked at last year, based on my income and family, showed that well over half of my taxes (56%) went toward medicare, medicaid, social security, food stamps, and other welfare and entitlement programs. 20% of my taxes paid went toward defense with another 4% toward veteran benefits. 9% to unemployment and social services. And so forth.
I’ve railed hard against corporatism - and obviously, much of the above spending takes the form of subsidies to defense contractors, food producers, health providers, and so forth - but let’s be responsible with our claims.
While I suppose it may be possible that over 85% of government spending ultimately takes the form of some sort of corporate subsidy (as suggested in the original post) - that nonetheless is ridiculously disproportionate relative to actual spending. There are, after all, very many bureaucrats and unionized (and pensioned) workers who, at different levels of government, are paid with taxes and who would not be considered “corporate subsidies.” There are indeed many individuals who directly benefit from government largesse that is funded by taxes. Here we see that pensions alone gobble up an estimated 23% of the budget in 2013.
Furthermore, to suggest that defense and entitlement spending is separate from corporate subsidies is both foolish and deceptive.
So I return the OP’s question: are you sure you’re pissed off at the right people?
Because who should be pissing you off are the various agents of the state who make it possible for the cronies (corporate, union, or otherwise) to benefit from our coercively extracted wealth.
So long as there are centers of power, those with means will aim to wield that power or work it in their favor. And there’s no greater power than the state’s monopoly on force. The state, therefore, will always serve the interests of the connected few above the masses.
If government cannot impose taxes or offer tax breaks, impose tariffs or offer subsidies, impose regulations or offer liability protections, impose fees and licensing or offer interest-free loans, impose wage and price controls or offer bailouts - then what good is it for a corporation [or the rich] to control the government?
“Hristos Doucouliagos and T. D. Stanley (2009) conducted a meta-study of 64 minimum-wage studies published between 1972 and 2007 measuring the impact of minimum wages on teenage employment in the United States. When they graphed every employment estimate contained in these studies (over 1,000 in total), weighting each estimate by its statistical precision, they found that the most precise estimates were heavily clustered at or near zero employment effects (see Figure 1). Doucouliagos and Stanley’s results held through an extensive set of checks, including limiting the analysis to what study authors’ viewed as their best (usually of many) estimates of the employment impacts, controlling for possible correlation of estimates within each study, and controlling for possible correlation of estimates by each author involved in multiple studies. Doucouliagos and Stanley concluded that their results “…corroborate [Card and Krueger’s] overall finding of an insignificant employment effect (both practically and statistically) from minimum-wage raises.””
Somewhere in the basement of the Mises Institute, a dark ritual is being performed in an attempt to make this study spontaneously combust in a ball of flame.
First, understanding the negative consequences of minimum wage laws is not some Austrian-exclusive “belief.” It’s universally accepted Economics 101, as even legendary Keynesians Paul Samuelson, Jim Tobin, and [economist] Paul Krugman will tell you (not to mention non-Austrian Milton Friedman). It is, literally, the basic and immutable law of supply and demand: as prices rise, quantity demanded - ceteris paribus - decreases, which in turn results in excess supply (or a glut). When the supply is labor, we call that glut “unemployment.”
In fact, there are countless studies and analyses we can offer each other. And we know that numbers can be interpreted and manipulated in any number of ways. The economic profession is far from free of ideologues.
Plus, there is the real understanding that the complexities of economies - that is the complexities of varied, independently acting individuals with subjective preferences, goals, and histories making decisions regarding scarce resources - cannot be distilled to one changed variable. And as such, because there is always time between when a minimum wage is proposed and when it takes effect, its impact can be all but hidden as employers take different actions leading up to the new minimum wage than simply waiting for the new wage to take affect and firing everyone then. Furthermore, compensation is not merely pay: workplace comforts, vacation days, overtime hours, and other benefits could be affected without employers resorting to firings. So when Doucouliagos and Stanley note, “we only include those estimates which are elasticities [of employment with respect to the minimum wage] or can be converted to elasticities” as a means to filter the various studies, they are not observing the larger picture. Indeed, the larger picture can be nearly impossible to observe if employers had enough time to adjust their practices before the wage took affect.
And despite all that, the best Doucouliagos and Stanley can offer is “[after adjustments,] little or no evidence of a negative association between minimum wages and employment remains.”
Still, if we cannot settle this matter with empiricism (since the analyzed individuals aren’t fungible, and we’ll both nonetheless offer those studies which confirm our biases), then we must turn to reason.
To that end, the following questions demand answers:
- How can increasing the price on gasoline and cigarettes (through taxation) be publicized as methods to curbing their use, but the same does not hold with regards to the price of labor?
- If people are more willing to purchase things during a sale, why wouldn’t the opposite - less likely to purchase things after price increases - be true?
- If raising the price on something does not affect the quantity demanded, then why not raise it higher?
- How is an arbitrary price set by diktat an improvement over the emergent price from free individuals interacting and making mutually beneficial decisions for themselves?
- Why would any employer hire someone who is not as productive as their wage, and who therefore represents a loss?
- If a 3% “cut” on a budget increase (facilitated on non-consensual funding) is - per state-supportive individuals on the left - difficult to overcome, why are employers expected to adjust to a 24% increase in costs for their lowest-skilled/marginally-productive workers (precluding consensual exchanges)?
- If legislation was passed that required a minimum of $10 when giving money to panhandlers, would said panhandlers be better off?
- If you saw a desperate woman looking for work to keep her children fed - with poor language skills and a lack of education making her an unattractive employee at the minimum wage level - offer to clean houses at below the minimum wage, would you personally threaten her potential employer with violence for making such an agreement? Would you personally intervene and keep her unemployed and unable to provide for her family? And if you wouldn’t do so personally, why would using a surrogate - government - be any different?
- Why have minimum wages historically and throughout the world been supported by racists hoping to keep minorities from employment?
- Why was the last year that the black employment rate was lower than the white unemployment rate also the last year there was no minimum wage law?
- If those businesses that cater to poorer communities tend to hire minimum wage earners to keep prices affordable to the clientele in their area, then who would most be harmed by increasing prices as a result of a minimum wage increase?
- If employers have a monopsony, then why do most people (about 95% of all hourly wage earners) earn more than the minimum wage?
- If employers have a monopsony that in turn pays their workers less than their worth, then why don’t you start your own business that offers these low-skilled workers more? You’d clearly attract the labor and, if your monopsony model is correct, there is more than enough room for profit. And doing so would effectively break the monopsony stronghold. Win-win-win.
- If someone wants to work at a job he or she may not be qualified for but compensates for this by offering a lower wage in order to gain experience, training, and an opportunity to advance, and someone is willing to hire that person, what gives you the right to intervene?
Unfortunately, the only ritual being performed is the sacrifice of the well-being of low-wage workers (teenagers and minorities in particular) at the bloody altar of good intentions.
The latest from Matt Wuerker
I try really hard not to be cynical but sometimes I feel like society is just getting dumber.
You see, Nate, that without minimum wages and regulatory stipulations and mandatory benefits, employers would use actual whips on us as motivation, pay us in actual peanuts (hope you’re not allergic!), and might occasionally stab us with actual pitchforks when we underperform. Without the state helping us, we’d be powerless saps - at least according to the ‘progressive’ belief in the monopsony model of employment in which there is effectively no competition for labor.
Of course, if these progressives truly believed in what they profess - that employees are grossly underpaid, including health benefits offered, relative to their productivity - then why don’t they start their own competing businesses? They claim that there is more than enough room for profit while still paying a “proper” wage, and such higher pay would produce an increase in productivity that would prima facie offset that pay. So what’s stopping them? According to their own logic, it would be a boon to employees, a boon to consumers (who would naturally gravitate toward these probably more expensive but more “fair” products), and they could make a few bucks on top of it all. That’s a win-win-win, folks! So show us you mean what you claim to be true, progressives, and put your own money on the line.
Is quite compelling, according to Sally Satel:
On Oct. 2, the U.S. Department of Health and Human Services proposed a new rule that would…[designate] a specific form of bone marrow — circulating bone-marrow stem cells derived from blood — as a kind of donation that, under the 1984 National Organ Transplant Act, cannot be compensated. If this rule goes into effect (the public comment period ends today), anyone who pays another person for donating these cells would be subject to as much as five years in prison and a $50,000 fine.
Here’s why it’s a bad thing:
altruism has proven insufficient to motivate enough people to give marrow and, as a result, people die… Each year, 2,000 to 3,000 Americans in need of marrow transplants die waiting for a match. Altruism is a virtue, but clearly it is not a dependable motive for marrow donation.
Satel notes earlier in the article:
Locating a marrow donor is often a needle-in-a-haystack affair. The odds that two random individuals will have the same tissue type are less than 1 in 10,000, and the chances are much lower for blacks. Among the precious few potential donors who are matched, nearly half don’t follow through with the actual donation. Too often, patients don’t survive the time it takes to hunt for another donor.
Allowing compensation for donations could enlarge the pool of potential donors and increase the likelihood that compatible donors will follow through. So the [recent] ruling by a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit [authorizing compensation for donors] was promising news for the 12,000 people with cancer and blood diseases currently looking for a marrow donor.
I can see two potential problems: the first is that people might donate bone marrow out of economic desperation, and this feels wrong to us at first glance. But is it really? Particularly when both parties benefit so readily from it? Indeed, given the risks of bone marrow donation, don’t donors deserve to be compensated? This is an objection which could be readily met by setting a threshold for compensated donations, to ensure that donors are compensation fairly for their donation.
The second problem is a more difficult one. There is potential that for-profit donations may eventually crowd out uncompensated donations, since why would any stranger do for free what they can get paid to do instead? Particularly when they’re making such an essential sacrifice—their own body?
At the end of the day though, I think the balance of equities weighs in favor of allowing for-profit donations. I have enough faith in the goodness of people that crowding out will be minimal. If someone walked up to me tomorrow and said I could save someone’s life with a bone marrow transplant, but that they couldn’t afford to pay me, I like to think that my decision would not be based on the lack of compensation. Meanwhile, some people may be more likely to donate if they know their risks will be well compensated. Allowing for-profit donations seems to be the better side of the argument, from my point of view.
I of course agree with your conclusion, but you overstate the concerns.
To your first “potential problem”: “people might donate bone marrow out of economic desperation.” Your solution is government (ostensibly; you don’t specify but the implication is there) “setting a threshold for compensated donations” to ensure “fairness.” As in pretty much every other instance of “fairness” being set from without, whatever is decided would be completely arbitrary. If two people negotiate on a price and willfully agree, then the price is fair. Either one owns oneself and thus controls his or her body, or he/she doesn’t.
Some may conclude that “economic desperation” would lead people to accept prices that seem unreasonable. You do not want people to be taken advantage of, and I grant that is a noble concern. But if for-profit organ donation is made legal - that is, if the state does not interfere in the consensual exchange of free individuals - then the market for organs will function like like all other markets. As I often note, the laws of supply and demand are immutable. Does anyone doubt that there will likely be more people in need of organs (marrow, in this instance) than those willing to endure the painful procedure to give it away? Thus, there will be competition for marrow. This drives the price up. And as the price rises, it will incentivize ever more people to enter the market and offer their marrow. This increases supply! More marrow will be available to sick people in need. As the supply increases, then, the price again lowers as it trends toward equilibrium. This means greater access to the sick. All good things.
Furthermore, because caring people like you would still exist, non-profits would no doubt emerge to help offset the costs for organs and offer minimum prices at what the non-profits and their sponsors seem fair - further assuaging concerns of individuals being taken advantage of. And those same non-profit or altruistic organizations could turn around and offer those purchased organs at a discount to individuals who, for example, may qualify as financially “at-need.”
As to your second “potential problem”: “for-profit donations may eventually crowd out uncompensated donations.” To address this, we must look at the matter in a different way.
Would you agree that, while very helpful and important, organ donation is not the most essential factor for our survival, yes? After all, only a small percentage of the overall population needs an organ transplant, whereas every human requires food, clean water, shelter, medicine, other forms of healthcare, etc. But we can acknowledge that it would be foolish to think in terms of the for-profit farmer “crowding out” the one who donates his labor with only the thanks of strangers as his reward. And most would agree that it would be irresponsible to suggest that doctors not be compensated for their years of dedication and sacrifice and training and expertise and labor and risks, yes? Thankfully, slavery has mostly been outlawed in this country. So why would the selling of organs - a much more painful and dangerous process than plucking a carrot from the ground - be different?
As illustrated above, selling organs would create incentive for people to offer theirs. The greater the need and the smaller the supply, the greater the price offered. The greater the price offered, the more people willing to exchange. Then, as now, most people with compatible family members will still receive donations from them. But those unfortunate souls without compatible family members will have more life-saving options available to them.
Allowing free people to buy and sell bone marrow is the only humane option. Not only does it represent a more just and civilized society (no state introducing threats of violence into the consensual decisions of free people), but it also means that no longer will so many people die every year hopelessly waiting for a matching donor.
And in that, I am very glad we can agree.
The NFL is a private company and can do whatever they want.
Indeed. That much was already noted in the original post. Of course they can choose who to associate with. The point is that there is an incongruity with its paeans to militarism that involves individuals using guns overseas to make us less safe while denying an ad that is about a father owning a gun at home to keep his wife and child safe.
This is dumb.
What is? Is it dumb to note the hypocrisy in the NFL’s stance? Is it dumb to note how outrageously anti-gun media voices must be to avoid public relations backlash from the ignorant and naive masses who would doubtlessly cry fowl at a commercial that has a man state “I am responsible for [my family’s] protection” and further imply that he can use a certain tool to do so?
I love DD but they can’t force another company to do what they want.
Of course they can’t. And not a single word in that post even suggested otherwise. Again, it was explicitly noted in the original post: “I support the NFL being allowed to choose to run whatever they want (or not) during their games, assuming that such decision-making is part of its contracts with the network airing the game.”
“Look at the difference: In 1977 I bought a small house in Portland Oregon for $24,000. At the time I was earning $5 per hour working at a large auto parts store. I owned a 4 year old Chevy Nova that cost $1,500. Now, 36 years later that same job pays $8 an hour, that same house costs $185,000 and a 4 year old Chevy costs $10,000. Wages haven’t kept up with expenses at all. And, I should point out that that $5 an hour job in 1977 was union and included heath benefits.”
an anonymous online commenter on the current economy. (via alchemy)
LTMC: When I was working at a gas station, I had an old-timer come in and tell that he used to make $2/hour at a factory job when he was in his late 20’s. He said he could feed his whole family for the night by buying a 24-cut pizza for $2. Fast forward to my gas station job, where I was making $8/hour, but a 24-cut pizza in my town costs closer to $20—2.5 times more on a dollar-for-dollar basis. He said he had no idea how I even survived on what I was making (I was insured through college at the time, but had no savings, and relied on family for large expenses).
This is what people mean when they talk about income inequality. The reason wages have not kept pace with expenses is because the nation’s previous method of wage redistribution—union representation—has declined substantially. Wage increases have subsequently been absorbed on an increasingly larger basis by corporate entities and the top 1% of earners. Strong unions used to serve as a soft redistribution mechanism to help ensure that increases in prosperity were shared equally. A critical mass of union representation in the labor force has always had derivative wage benefits in the non-union labor market. That critical mass no longer exists, however. Consequently, the decline of union labor has led to a concurrent decline in wages relative to expenses, because there’s no longer an institutional mechanism for redistribution of earnings increases in the economy. The critical mass of union representation is gone, and nothing has taken its place.
First, income inequality has nothing to do with poverty or well-being. People in, say, Beverly Hills may have large discrepancies (“inequalities”) in income but they are all fairly wealthy. And people in, say, some slum in Bolivia may have no income inequality but they are all equally poor. Indeed, the poor in the United States are wealthy compared to the poor in Africa. Relative wealth is absolutely meaningless. It falsely presumes that wealth cannot be created and that trade is zero sum. How wealthy my neighbor may be does not necessarily affect me unless I, frankly, allow envy to interfere with my happiness.
Second, the most relevant manner in which union representation has anything to do with “income inequality” is insofar as unions price out marginal workers from jobs through their government protections against “scabs” and their support for minimum wages. Unions have not been the great protector of the worker that the left makes them out to be.
There are many reasons why someone might conclude that most were better off in 1977 than today.
Regulations - ostensibly required for matters of safety and protecting the environment - have increased the costs of automobiles dramatically. Cars cannot simply be made as cheaply as they once were, and those that might be more affordable elsewhere are made more expensive due to protectionist import tariffs or outright bans. Furthermore, advances in technology have equipped cars in ways unthinkable years ago. That used mid-70’s Chevy Nova had none of the safety and luxury and comfort features standard in cars today. Those airbags, radios, and power windows aren’t free to produce, after all. Ergo, comparing the price of a cheap car in 1977 and a cheap car in 2013 is not comparing like goods. Instead, the 1977 Nova may have more in common with a brand new, barebones Tata from India which, if not for government/EPA interference prohibiting its import into the United States, would cost the American consumer about $3,000. And, adjusted for inflation, that $3000 today is much less than than the $1500 spent on the used Nova in 1977.
Housing is made more expensive mostly because of goosed demand facilitated by easy credit from government agencies and lowered lending standards facilitated by government decree. The housing bubble is decades in the making (though it really began its meteoric climb in the 1990s), and the recent correction didn’t come anywhere near correcting since the same activities that led to the bubble are mostly still in effect. A dramatic decrease in lending standards put people into homes that they could not afford, creating an increase in demand that drove the costs of owning a home upward.
Russ Roberts, in his paper “Gambling with Other People’s Money,” details the entire process of perverted incentives in the housing market that incentivized buyers to purchase more and bigger homes while protecting investors from the risks of making such loans - all which led to dramatic increases in housing prices, most of which are still artificially overvalued today. (Also relevant are Woods’ Meltdown, Sowell’s Housing Boom and Bust, and Norberg’s Financial Fiasco)
Furthermore, government involvement in education has steadily pushed prices of education upward while simultaneously devaluing the marketability of said education. Graduates, thus, begin their careers with a large amount of debt which affects their ability to save. The attempts to make education as market agnostic as possible has also led people into majors with little practical utility (while diminishing the prevalence of trade schools), further harming their employability in the marketplace.
And with minimum wages pushing individuals to enter the workforce much later than they once did, said individuals are thus that much behind in their ability to advance in their careers and move past the point in which a minimum wage would be relevant to them. (See here, here, here, here, and here for more on why the minimum wage is terrible for the economy in general, and marginal workers specifically.)
But the true culprit in devaluing the purchasing power of the dollar is the Federal Reserve.
This is why comparisons of prices and wages must always be “inflation-adjusted.” The minimum wage today ($7.25) is over three times what it was in 1977 ($2.30). Adjusted for inflation, however, it is actually 18% less. In other words, it is inflation that makes the income less valuable. But most people don’t understand what inflation is, and they just take it as a given.
On the contrary, economy-wide price inflation is a product of monetary inflation - that is, an expansion of the money supply.
At the start of 1977, M1 (total stock of monetary assets in the economy) was $306.9 billion. Today, M1 is $2.6 trillion. That’s an increase of 847%. Every dollar added, thus, makes every dollar in existence that much less valuable.
Strictly speaking, inflation is what happens when a government central bank — in our case the Fed — increases the supply of money and credit out of thin air. When these increase and the supply of goods does not, prices will generally rise — that is, the value of the dollar will fall — and it will take more money to buy things than previously. That’s common sense. If people have more money to spend, not because they produced and sold more goods, but only because the central bank printed it, prices will rise with the rising demand. Generally, a rise in prices is called (price) inflation, but it’s actually just the consequence of (monetary) inflation.
When the value of the dollar falls, our incomes fall, even if wages are nominally unchanged. With price inflation, one hundred dollars buys less today than it did last year. Or, to put our monetary history in perspective, what five dollars bought in 1914, when the Fed first opened its doors, today costs about one hundred dollars. A wage increase might make up some lost ground, but people on fixed incomes don’t get wage increases, so they’re out of luck. Also, prices typically rise faster than wages during an inflationary period. …
Because Fed-created money enters the economy at particular points (through banks and bond dealers), a select few people get it sooner than the rest of us. Those who are thus privileged are able to buy at the old, lower prices, while the rest of us don’t see the money until prices have risen. That is an implicit tax and transfer.
And the problem isn’t simply a rising price level. Relative prices are what provide entrepreneurs and investors the information required for rational economic calculation and service to consumers. Inflation changes relative prices. Thus, it distorts the price system and, in turn, the multidimensional economic structure. That means any stimulus is unsustainable because the inflationary policy will eventually end and unemployment must follow as the inflation-induced errors are revealed.
Inflation serves the governing class. Honest, hardworking people should abhor it.
On top of everything, the state keeps about half of what every person earns through social security, medicare, income taxes, sales taxes, etc.
Which brings us to the common thread amongst all these impediments: the state.
The state is what makes goods artificially expensive. The state makes employees much more expensive for an employer to hire than what the employee will ultimately be paid (I’ll have a post on this soon). The state devalues the purchasing power of every dollar we hold.
Now, I absolutely grant that many rich have gotten richer at a higher pace than the rest of us for some years now. While not necessarily a problem in and of itself, it is the truth - and a symptom of a larger issue: this is precisely because of the generous benefits afforded them by the leviathan state the left views as the savior of the common man.
And, again, the Federal Reserve is the biggest facilitator of this massive theft from the common man to the wealthy and connected: that’s the state’s true redistribution of wealth. Expecting the state to be otherwise is pure naiveté.
So long as there are centers of power, those with means will aim to wield that power or work it in their favor. And there’s no greater power than the state’s monopoly on force. The state, therefore, will always serve the interests of the connected few above the masses.
As I’ve noted:
If government cannot impose taxes or offer tax breaks, impose tariffs or offer subsidies, impose regulations or offer liability protections, impose fees and licensing or offer interest-free loans, impose wage and price controls or offer bailouts - then what good is it for a corporation [or the rich] to control the government?
It is the state that is zero-sum. What it gives it must first take, and the givers and takers are usually decided by the connected.
The state is no friend to the poor, nor - as I’ve hopefully shown - no friend to the common man. Turning to monopolized authority to centrally plan people out of poverty and hardship only leads to more poverty and hardship.
As much as I hate that this happened, and I recognize police brutality is a huge problem, the fact remains that all the facts are not know AND America has something y’all seem to remember for people like the Boston Bomber but forget when it comes to policemen: innocent until PROVEN guilty. He has not been proven guilty and the investigation by the police department has not finished. You cannot abandon this principle.
- "all the facts are not know (sic)"
Cop tasered boy with his hands up and walking away, causing boy to hit his head on the ground when he fell which lead to brain damage and a coma. What more need be known?
- "innocent until PROVEN guilty."
Such a principle is an important element in a properly functioning criminal justice system, but the point is that one need not be proven guilty in a court of law to be fired. If this were private security in a private school, the security guard would have been - at the very least - suspended immediately and the school would have dealt with the private security firm swiftly so as to please the parents and students. After all, unlike cops and public schools, private security and private schools are dependent on the voluntary patronage of willing customers. Parents concerned that their children might be killed by over-zealous security would no doubt find a new place to send their kids.
- "the investigation by the police department has not finished."
Considering the overwhelming majority of such investigations tends to absolve officers of wrong-doing, I wouldn’t hold my breath waiting for a just outcome.
Proving that idiocy truly has no bounds, Spain issued a “royal decree” taxing sunlight gatherers. The state threatens fines as much as 30 million euros for those who illegally gather sunlight without paying a tax.
The tax is just enough to make sure that homeowners cannot gather and store solar energy cheaper than state-sponsored providers.
Via Mish-modified Google Translate from Energias Renovables, please consider Photovoltaic Sector, StunnedThe Secretary of State for Energy, Alberto Nadal, signed a draft royal decree in which consumption taxes are levied on those who want to start solar power systems on their rooftops. The tax, labeled a “backup toll” is high enough to ensure that it will be cheaper to keep buying energy from current providers.
Spain Privatizes the Sun…
The state’s thirst for control again exceeds any pretense of limit.
N.B.: I think C4SS’s assessment incorrectly referring to this state action against private individuals as “privatizing" may stem from their typically Marxian/Proudhonian interpretations of property.
Of course, sunlight cannot be privatized. Resources like sunlight, oxygen, and gravity, are referred to as “background conditions” or “non-economic goods” because, as the name implies, they are not (typically) economic goods. There is no inherent rivalrous, perishable scarcity as there would be with economic goods such as iPads, gold, labor, or coconuts.
As Carl Menger explained in his Principles of Economics:
[A]ll the various forms in which human economic activity expresses itself are absent in the case of goods whose available quantities are larger than the requirements for them, just as naturally as they will necessarily be present in the case of goods subject to the opposite quantitative relationship. Hence they are not objects of human economy, and for this reason we call them non-economic goods.
Using the term “privatize” in this case, with regards to the sun - or, more appropriately, sunlight - only serves to sully the concept of privatization. I am afraid, considering the source, that may have been the point.