Tried to? Ha!
Ok here’s an attempt:
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Resources are needed to make tools. Proof: law of conservation matter and energy.
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If one consumes all ones resources, there is nothing left to use for tool making. Proof: definition of consumption. See any dictionary. Conversely, if one underconsumes, one has not consumed everything, meaning there are resources available for tool making.
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Tools are needed to increase productivity beyond the previous maximum state of things. Proof: If there is no cause for an increase, the increase won’t happen.
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If unconsumed resources are not devoted to making tools, but to other things, productivity will not increase, and indeed the pool of resources available for productivity decreases. Proof: logical consequence of step 2, and a law of arithmatic [if you subtract from a pile, the pile grows smaller].
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If one attempts to make a tool that requires more resources than one has at ones disposal, one cannot make the tool. Proof: definition of “requires”.
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Further, if one attempts to make a tool that requires more resources than one has at ones disposal, one puts step 3 into motion. Proof: left as an excercise for the reader.
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[Compressing a few steps together here, cause it’s getting long] When a central bank prints money, this fools people into thinking there are more resources available than really exist. Proof: Money is obtained by working, meaning increasing productivity, meaning increasing the pool of resources. Saving money means underconsuming, meaning not using the resources created. Thus the existence of saved money in banks implies, absent money printing, that resources are avilable for tool making.
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Thus newly printed money cause step 6, which causes step 5, which causes step 4, which causes step 3.
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The consequnce of step 3 is that we have less resouces at our disposal than before, with no tools ot show for it. Which means productivity cannot increase, and consumption has been reduced with nothing to show for it. This is called a recession.
Consumariat, keep in mind that “unemployment” in the context of Austrian Economics doesn’t just mean “people losing jobs” - it means “fewer people being employed than otherwise would be”. Whether that’s because people lose their jobs or they never get hired to begin with is immaterial here.
Well, just because a firm decides to cut their wages to keep the amount of employees constant, it still does not change the fact that the demand for workers have decreased due to the minimum wage .
I disagree with this. Firstly it is not the demand that has changed, it is the quantity demanded of workers below the minimum wage. A simultaneous effect of the MW is to incrase the quantity demanded of workers above the MW in order to substitute for the ability to get sub-MW workers.
If you own a factory that needs to be utilised to a certain minimum capacity in order to pay for itself, then changing the ratio of workers to capital is simply not an option. The demand (as opposed to quantity demanded) is determined by other factors than the wage level. Add into this the constant competitive need to remain profitable compared to your rivals, you would have no reason to reduce the number of employees down to this minimum level of capital utilisation - it would just not make sense from a profit maximisation POV.
I think you fail to see that when trying to explain Econ law, you have to keep everything else constant.
I understand completely the need to keep everything else constant, I think it is you who fails to see that this is exactly what I am doing. The only variable I am changing here is the MW. From this single variable change it is apparent to me that there are multiple effects, so I have in no way gone against ceteris paribus.
It is important to distinguish between the manipulated variable (the minimum wage) and the affected variable(s). What you seem to be suggesting is that I ought to keep all affected variables constant apart from one, which is an utterly unreasonable demand. It is like arguing that I should analyse the effect of changing one angle of a triangle and only consider one change out of the other two angles. This makes absolutely no sense because the three are interconnected.
Applying this specifically to the MW issue, it seems to me that a rise in the MW has two direct effects;
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A reduction in the quantity demanded of workers below the MW (reduction to zero)
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An increase in the quantity demanded of workers above the MW (to substitute for the sub-MW reduction)
Both of these change simultaneously because the demand for workers (as opposed to quantity demanded at a given price) remains constant. (Remember, the demand is set by structural, and competitive necessities).
Furthermore, a secondary effect comes in at this point as a result of the two changes above. The effect is to necesitate the restructuring of the business in order to find the funds to make the MW possible.
Another poster makes the point that these restructurings will have already been made if they were possible. The point is that the were not possible previously but are possible now. The reason that they are possible is because the MW has been implemented universally across all competitors - no competitor can tempt your higher-earning workers away if you cut their wages because all your competitors face the same pressure to cut their higher wages too.
To your first point about demand and quanitity demanded. Yes, i know the difference between the two and your critique would be absolutely right if we were only talking about the short run effect. I am not talking about short run but overall effects of minimum wage. Robert Murphy does well pointing this out:
To say that the demand (not just the quantity demanded) falls in the long run
means two things: First, at the constant minimum wage, the number of workers
who can find jobs will fall. Second, even if the government eventually removed the
minimum wage, the equilibrium number of workers hired (at that point) would
initially be lower than the original number of workers before the imposition of the
minimum wage.
Secondly, the effects of minimum wage would still be the same even if the employers decreased their wages. But we have answered your concern here because you only ask about effects of minimum wage on unemployment in your OP. We clearly know that there are more results from minimum wage but you only ask for its effects on unemployment.
To say that the demand (not just the quantity demanded) falls in the long run
means two things: First, at the constant minimum wage, the number of workers
who can find jobs will fall.
Simply quoting from another person who repeats the same point you already made is not particularly convincing.
Second, even if the government eventually removed the
minimum wage, the equilibrium number of workers hired (at that point) would
initially be lower than the original number of workers before the imposition of the
minimum wage.
You will have to expand upon this point. It is not immediatley clear to me why this would be the case.
But we have answered your concern here because you only ask about effects of minimum wage on unemployment in your OP
This simply isn’t good enough. Try answering my question about triangles with this retort and you could end up proving that the angles of a euclidian triangle do not add up to 180 degrees.
Just read the first part of that book that was recomended - Intro to Economic Reasoning. I din’t see any arguments in there that convinced me that the Action axiom can be used to ‘prove’ anything a-priori apart from the idea of ordinal rather than cardinal ranking of preferences, and supply and demand. Beyond this point certain assumptions are needed - even the author admits this.
Furthermore, Mises was aware of this;
“Every theorem of praxeology is deduced by logical reasoning from the category of action. It partakes of the apodictic certainty provided by logical reasoning that starts from an a priori category. Into the chain of praxeological reasoning the praxeologist introduces certain assumptions concerning the conditions of the environment in which an action takes place. Then he tries to find out how these special conditions affect the result to which his reasoning must lead. The question whether or not the real conditions of the external world correspond to these assumptions is to be answered by experience. But if the answer is in the affirmative, all the conclusions drawn by logically correct praxeological reasoning strictly describe what is going on in reality” (Mises 1978: 44).
So it seems that Praxeology as it was originally concieved was not as far reaching as some mordern Austrians claim.
The chapter on ‘Marx’s’ labour theory of value was a joke - It is obvious that David Gordon has not read Marx in any depth as his arguments are just rehashed ones used originally against the classical LTV. Marx’s version was in response to his perception that the classical one was flawed. This isn’t to say that Marx’s theory is correct - it’s just that it needs to be criticised on terms that are relevent to it as opposed to just using straw men.
Consumeriat,
That’s a great quote from Mises.
In Defense of “Extreme Apriorism” By Murray N. Rothbard is a short paper that lays out the 3 assumptions about the world used in Austrian Economics.
They are all ridiculously self evident, as you’ll see if/when you read the paper.
I want to point out that this does not take away from the deductive nature of praxeology too much, because the statements it makes can be rearranged to purely logical ones. For example, instead of assuming one of the axioms [that there exist different places on the Earth that have different natural resources] as a given, one could change it things to an if-then statement. If different places on the Earth have different natural resources, then it follows bla bla.
Will have to take your word about Marxism, don’t know much about it.