As many people already said, you need to understand the world properly before trying to “fix it”.
I read the whole economic portion of your essay. Would you mind reciprocating and answering my question?
In case the question wasn’t clear, I’ll elaborate.
The real world is always in flux. Preferences change, needs change, material circumstances change. Every change means that whatever arrangement of the means of production best provided for people before, no longer does. How many carpenters in Portland is best? How many garbage men in Chicago? How many nurses in Wichita? How many computer technicians in Albany? It is impossible to know the answers to the flurry of such questions that arise anew with each passing moment in the kaleidoscopic world of change we inhabit. And it is impossible for any single individual or bureau to even approximate the answers.
The only thing that can approximate the answers is the labor market. And this is how it does it: changes in the data of the world shift consumer demand from one segment of the market to another, bidding down prices in the former and bidding up prices in the latter. This induces the producers in the now-less-important industry to reduce its workforce and wages, and producers in the now-more-important industry to increase its workforce and wages. The lower wages discourage workers from training for and entering the now-less-important industry, and encourages workers to train for and enter the now-more-important industry. Thus do people qua workers shift production in order to best provide for themselves qua consumers under ever-changing circumstances. And again, such new circumstances are ever emerging in a mind-bending flux.
Under your procrustean near-equalization of wages, the labor force would be completely deaf to the ever-humming chorus of price signals. Every increase in demand for Medicine A would go unheeded, because the concomitant increase in demand for workers to help produce Medicine A would have no effect on wages for those workers. Without enough workers to produce it, calamitous shortages of Medicine A will result.
And who would help satisfy the demand for sanitation workers or a deep sea fisherman, when you could be a receptionist, or a babysitter for the same amount of pay? Billions of misallocations like these will occur under your system.
You say your government wouldn’t give order to your economy; it couldn’t even begin to address those billions of misallocations anyway. But, as I’ve demonstrated, the market wouldn’t give order to it either, because your system would cripple it. So these billions of misallocations would simply go unaddressed, and they would drag everyone in your system, first into slowed growth, then into stagnation, and finally into abject squalor.
Now, there’s a good question. Keep in mind that in the system I’m proposing only common labor employed by businesses is paid the allotted income. All other employees in every business are paid out of the revenue of the business. Every business decides for itself which positions fall into which category. So, to retain any particular employee who the business deemed performed something more than common labor, the business would have to negotiate a salary with that person. Labor would be allocated for the whole of the economy in that fashion.
The only thing I’m out to “fix” is our economic system as it now exists. Again, I’m offering an alternative to Austrian economics that accomplishes things that every libertairan wants and, it so happens, also accomplishes things every liberal wants. That, I’m saying, would make it infinitely easier to accomplish, politically. Surely we aren’t so poisoned by ideology that we would forego what we want just to keep liberals from getting what they want.
You might want to see “About the Author” on ajustolution.com.
That is a large improvement in manners, but, as I’ll be saying many times in replying to as many of these responses as I can (with some inevitable triage), I’m not saying there is anything wrong with Austrian economics. I’m talking about somehting different–and new–that is aimed more at adherents of the more general philosophical perspective of libertarianism.
[Sorry, folks–I thought when I clicked “reply” the machine would direct my response to the appropriate place in the thread. I’ll do better. The response immediately following Grayson (I think the name was) about the allocation of labor refers to that post. the others are messed up, but mostly they could refer to any response so far.]
Re Spideynw: Einstein was an unknown patent clerk with only an undergraduate degree and no previous publishing credits when physicists accepted for consideration his startingly original ideas about the nature of the universe.
Please allow me to say a general word about another common response, that what I’m proposing is really some form of socialism. I’ll quote from the essay to which this thread alludes: “Liberty would be maximized; the profit motive would drive the economy; the free market would determine what was produced, in what quantity, and at what price; and there would be no limit on how much money anyone could earn or how much property anyone could acquire.” Oh, and there wold be no taxes. Come on. If that’s socialism, we should all be signing up.
I’m talking about using the democratic political process to chnage our entire approach to money, but only that.
it’s comments like this that further affirms for me that it’s not about an intellectual argument that you are putting forth but rather some kind of impulsive, high time preference, base-level effort clung more to the ego, “I’m out to ‘fix’…”.
unfortunately the sale is turning me off to not only deny the product but to leave the store and puke.
Re: Wilderness
Interesting response, given the epigram that follows it about “Kissing ass” being, apparently, too common. Certainly, no one is under any obligation to consider what I have to say, but to claim that one isn’t going to read it, much less attempt to truly understand it, because one didn’t like the “sale” is to put forth a bad excuse that wasn’t the least bit necessary, anyway.
In all honesty, that was well said![Y]
What if an employee is deemed to “perform something less than common labor”? Can he be laid off? If not, then how is your “allotted income” different from a soaring minimum wage? If so, then how is it different from a combination of a soaring minimum wage and a gigantic government unemployment “insurance” scheme? How do you avoid all the problems widely known to be associated with both?
Really, I am not sure what you want here.
Here is a start:
“First of all, improving capitalism is only a good idea because capitalism has so much to commend it, despite its problems.” Capitalism to me means unregulated markets and free trade. How does one improve on unregulated markets and free trade? You cannot deregulate the market if it is not regulated and you cannot decriminalize trade if it is already unhindered.
“Still, capitalism does have some fundamental problems. It is inherently unstable,” That is a problem not with capitalism, but with life. Yes unfortunately we all die and no one is omniscient. We all have to sleep and eat and drink. It is unstable because of reality. So you think reality can be changed?
“and has always been dependent on governments and central banks to keep it from collapsing in on itself,” This is an assertion, not an argument. Do you have any proof that this is true?
“which has in turn created a countervailing tendency towards inflation.” If you are saying that inflation occurs mainly because of central banking and government involvement of currency, I would tend to agree. If not, then I need more explanation.
“In capitalism as it has ever existed,” Capitalism has never truly existed.
“The uneven development of capitalism in the world has made seeking economic opportunity the prime motive for massive migrations of people” Another baseless assertion. People move for all kinds of reasons, economics being only one of them.
“Capitalism has always had involuntary unemployment and poverty associated with it.” Again, capitalism has never truly existed. As such, how can you make such an assertion?
Given that there are so many fallacies in just the first few sentences, why would I want to continue reading?
First of all, I would like to say that about 2/3rds of this paper consists only of unfounded and unsubstantiated assertions. The so-called “uneveneness” of capitalism and its “inherent instability” is in no way self-evident. Leaving that aside, your proposals are preposterous. Also, it was difficult to read your paper because it literally makes no sense and is horribly written.
That being said, the allotted incomes, according to your plan, would be paid out to a certain subset of society by the government based on previous performances at a fixed rate. How will the remunerations to labor, that is, their wages, fluctuate in the face of productivity changes without a market? Will Central planners arbitrarily decide the “appropriate” wage level? Furthermore, if the government is paying the workers with pure inflation, does that mean that the land owner’s and entrepreneurs get to keep the lion’s share of the revenue? Usually, a large portion of income is given to labor (about 2/3rds) and the rest is divided between capital and land. This would mean huge supernormal profits in industries where this practice is most common and therefore a massive (and arbitrary) reallocation of resources. This would affect the demand for real capital and therefore the natural and market rates of interest. The whole economy would be continuously trapped in permenant disequilibria.
Re. Lilburne, asking whether employees earning the allotted income could be laid off:
Absolutely that person would be laid off. This is not about having people other than the owners and managers of businesses making business decisions for businesses. Of course, the question does arise, why would any business have an employee who was performing “less than common labor,” i.e., I take that to mean, superfluous labor. Isn’t that the province of government, according to most members of this community? LOL
One direction in which that response does point is the issue as to where the money comes from to pay those who are payed the allotted income. Many people, at first blush, tend to think it somehow comes from government, but it does not. That is the most original, even radical, part of this idea. The money to pay everyone being paid the allotted income comes from a separate, independent monetary agency. It prints money as needed to get everyone paid. It does not, however, have any ability to influence what the size of the money supply would be. The total of the money supply would simply be the number of people being paid the allotted income (“common labor” in businesses, everyone employed in government, retirees, and people genuinely too incapacitated to work any kind of job whatsoever) multiplied by the amount of that income (which would be the same for everyone receiving it, and would never change once set).
But you cannot. That’s the fundamental understanding of the Austrian school. Life is dynamic. Economies are dynamic. Preferences and conditions are dynamic. You cannot fix “the system” because you cannot perceive of all of the future flaws of your plan, or the needs of the economy in the future. If it was possible to plan a “system” then we wouldn’t need markets.
But this is not true. Austrian economics is based on economic science. We can improve the science, we can show where Austrian Economics makes mistakes but to claim that you have an alternative to a scientific approach is what?
And please stop making claims about what every libertarian wants. Many of us are ancaps and voluntarists. Panarchists. For a good number of us, we have little use for the state in any role. So you certainly cannot come up with a universal system that addresses the wants of people whom you don’t even know. To claim such is the epitome of hubris.
More poor argumentation. The issue isn’t ideology, it is ideas. The fundamental idea behind liberty is markets. You are proposing doing away with markets, even more aggressively than the state is now. That is a move towards centralization and less liberty.
Your ideas, while novel, are not new, and not unique. People keep showing up with some “better system” and mostly because they don’t actually understand any fundamentals of economics, austrian or otherwise. I strongly suggest you learn more about money, markets and epistemology.
Well, I wanted to get this idea before people who might be interested in an idea that would absolutely remove government and central banks from managing the economy, and doing way altogether with taxation of any kind, while retaining the fundamental elements of capitalism: in other words, I was thinking, libertarians. At the same time, as I have pointed out, instituting this change would not require defeating political liberals because it also happens to solve the problems that are closest to their hearts. Obviously, anyone who thinks all of those points are “fallacies” will not be interested in this idea.
People on ths forum are asking questions and making claims that it would take pages of text to answer/refute. If nobody other than Lilburne wants to ask a specific question, so be it. But putting me in my place, or whatever it is you’re trying to do, with these bombastic responses, knowing they can’t be refuted in a brief paragraph, is just silliness, and a waste of your own time as well as mine. If you want, you can take my word for it that they are all adequately addressed in my book (which is chock full of references to other thinkers in chapters four and five).
This.
It’s not that we don’t understand what your system is about, it’s that we see problems with it from the get-go which aren’t acknowledged nor solved.
Your so-called proposals don’t make any sense, and therefore are not taken seriously. What do you want from us? Elaborate on your positions and answer our questions.
And that is what we usually do, have lengthy discussions. And the problem is?