International Minimum Wage

[Arvin]

I started thinking about the ultimate 3rd world killer; as in protectionist policies that harm 3rd world workers. My idea to completely kill the 3rd world economically was an international minimum wage, the chaos it would bring to the 3rd world would be unimaginable. So I searched mises.org, found nothing on it. Then I googled it and found this.

So it seems like there are actually people advocating this crazy idea. Is it worth the time to actually debunk this or is it a waste of time? I mean Austrians have already debunked every possible intervention in the market, do we need to debunk every idea separately?

Also, I don’t know if I got this from someone or if I came up with it myself: A way to predict coming legislation is to take any subject, come to the dumbest conclusion, finding the dumbest solution and enforcing it with a gun. Using that simple rule I’ve forseen lots of legislation. I think I was the first person in Sweden to forsee that the Environmental Party was going to want meat taxes because of carbon emissions and so on.

[DanielMuffinburg]

The minimum wage is a price control. So, there will be a surplus of labor, meaning that there will be people who will be “too expensive” to be hired by anyone. Their only solution would be through the black market (prostitution, maybe), or they would have to be maintained by someone so as to not starve to death.

[Harry_Felker]

@Arvin

So it seems like there are actually people advocating this crazy idea.

Yeah, the world is full of socialists…

[DanielMuffinburg]

I should also add that there would be no possibility of emmigration for the unemployed worker since the minimum wage would be everywhere.

[Harry_Felker]

@Daniel

I should also add that there would be no possibility of emmigration for the unemployed worker since there minimum wage would be everywhere.

Very valid additional point…

[DanielMuffinburg]

Btw, anyone notice the problem with the title of the paper?: The Case for an International Minimum
Wage in the Context of Free Trade.

You can’t have “free trade” and a “minimum wage” in the same economy/market/whatever.

[Harry_Felker]

@Daniel

Btw, anyone notice the problem with the title of the paper?: The Case for an International Minimum
Wage in the Context of Free Trade.

You can’t have “free trade” and a “minimum wage” in the same economy/market/whatever.

Only in Oceania

[Jayjay]

Another University of Western Sydney masterpiece… I suppose it’s to be expected, Steve Keen (Marxist/Post Keynesian) is one of their most outspoken academics. He gained a lot of support for “calling” the crisis due to his following of Hyman Minsky and paranoia of debt; unfortunately what makes him dangerous is that his “solutions” are nothing but price and wage controls along with inflation (oh, and he wants to somehow “remove” the “flaws” in the market without regulation – he’s quite vague though. Something about evil capitalists, cavaliers, blah blah insert Marxist dogma here).

That university has to be leading the socialist push in Australia.

[tacoface]

it’s also a shithole which no student wants to go to.

[Arvin]

@Jayjay

Another University of Western Sydney masterpiece… I suppose it’s to be expected, Steve Keen (Marxist/Post Keynesian) is one of their most outspoken academics. He gained a lot of support for “calling” the crisis due to his following of Hyman Minsky and paranoia of debt; unfortunately what makes him dangerous is that his “solutions” are nothing but price and wage controls along with inflation (oh, and he wants to somehow “remove” the “flaws” in the market without regulation – he’s quite vague though. Something about evil capitalists, cavaliers, blah blah insert Marxist dogma here).

That university has to be leading the socialist push in Australia.

So this guy is actually renown in Australian academia? Wow…

Well, we could probably kill this idea before it becomes popular, I’m just afraid that we will unintentionally spread this crazy idea. I will have to read some more Austrian Economics before I write a critique though, but if someone else wants to do it, that’s cool. I can do it after I’ve read some more though.

[hayekianxyz]

I don’t see how it could work, on the one hand you’d have the possibility that it was low enough not to affect the more developed nations, on the other hand, you’d got the possibility that it would affect the more developed nations. Of course, the problem of the latter “solution” is that it would have to be high enough to cause massive amounts of unemployment in less developed nations (alongside unprecedented amounts of emigration from the poorest countries).

The only solution to that I can think of would be for one central body to declare MW as a proportion relative to some measure of a countries well being (avg. wage rate, GDP per capita).

[DanielMuffinburg]

@GilesStratton

I don’t see how it could work, on the one hand you’d have the possibility that it was low enough not to affect the more developed nations, on the other hand, you’d got the possibility that it would affect the more developed nations. Of course, the problem of the latter “solution” is that it would have to be high enough to cause massive amounts of unemployment in less developed nations (alongside unprecedented amounts of emigration from the poorest countries).

The only solution to that I can think of would be for one central body to declare MW as a proportion relative to some measure of a countries well being (avg. wage rate, GDP per capita).

Don’t forget about the ATBC. Look at the Great Depression. Hoover and Roosevelt didn’t let wages to fall so we had massive unemployment.

[JB31]

So basically, now some people won’t be able to get jobs because certain companies will no longer to be able to afford labor? Won’t that ultimately push some businesses out of business and create a labor surplus? International minimum wage would certainly lead to more unemployment.

[Harry_Felker]

@Jacob Bloom

So basically, now some people won’t be able to get jobs because certain companies will no longer to be able to afford labor? Won’t that ultimately push some businesses out of business and create a labor surplus? International minimum wage would certainly lead to more unemployment.

Until whips and chains slavery is brought back…

[mash]

Jayjay,

Just need to clarify some points in your post.

Firstly Steve Keen and Hyman Minsky, being Post Keynesian are not paranoid about debt. Debt performs a useful function within the market. It is only when it is used for speculative and ‘unproductive’ means that they have cause for concern.

Secondly, I noticed your use of scare quotes on Steve calling the crisis. What exactly are you trying to imply?

Thirdly, on removing the flaws in the market.Maybe I can shed some light. Because Steve adheres to complexity theory (chaos theory) he sees the market as one aspect of a system evolving that is constantly evolving through time. It’s an identifiable process. A chaotic system can be made more stable by fixing some of the initial conditions. Now his solution is to fix some of the initial variables to limit how unstable the system can become.

I think, though I will admit I am not entirely sure and my knowledge is limited, that a similar claim can be made with what an ancaps are trying to do with the social system; fixing some of the initial conditions and then allowing the system to continue on from there. For example, establishing private property rights and a contract system. This is of course if assuming that ancap is a process theory and not an end-state theory.

Fourth. I think you will find most universities in Australia are similarly ‘socialistic’. Most of them promote sustainability, equality and other various ideas that tend to be associated with socialism. UWS is no no different in this regard. One point I’d like to make though is from what I’ve seen it is the only unversity in Sydney which offers a compulsory History of economic thought and political economy. it is a lot more pluralistic in what it allows to be taught. Students will read about Austrian economics, as well as other heterodox schools. I don’t think the same can be said about the other unis in sydney. I have a few friends enrolled in course in two of the other unis and their either have not heard of Austrian economics or can only vaugely mention some ideas associated with them.

fifth.I don’t know where you got the idea about he is thinks capitalists are evil. This reminds me other quotes I’ve read where people say he hates capitalism, he hates profit, he supports communism.

I assume by your mention of cavalier that you are referring to his February debtwatch 31 (in January of his archive). The quote can be understood as his criticism of banks lending out credit for speculative and unproductive means, which combined with endogenous money creation is a core idea in Minsky’s Financial Instability Hypothesis. It’s hardly dogma.

Your post sounds like similar ones I read where Rothbard is characterised as supporting multi-national corporations, slavery etc or ancaps (I realise Rothbard is an ancap but these are claims i’ve read on ancap) apparently supporting pillaging of oceans and natural resources and pollution. They are just as baseless. The Unfortune thing is that it appears to be on all sides of politics.

[liberty_student]

@Jayjay

Another University of Western Sydney masterpiece… I suppose it’s to be expected, Steve Keen (Marxist/Post Keynesian) is one of their most outspoken academics. He gained a lot of support for “calling” the crisis due to his following of Hyman Minsky and paranoia of debt; unfortunately what makes him dangerous is that his “solutions” are nothing but price and wage controls along with inflation (oh, and he wants to somehow “remove” the “flaws” in the market without regulation – he’s quite vague though. Something about evil capitalists, cavaliers, blah blah insert Marxist dogma here).

That university has to be leading the socialist push in Australia.

Mr. Keen was involved in a discussion here, however he couldn’t articulate a proper understanding of Say’s Law, after having written a critique of it. I believe he abandoned the discussion when non-academic laymen were instructing him on Austrian economics.