This is my first post here and I was wondering if anyone had any insight. As a little background I have been a member of the Libertarian Party since I have been able to vote and I was excited by this Ron Paul wave of popularity during the last election. I just read Meltdown by Thomas Woods which I found an exerpt of on campaignforliberty.com and after reading it I immediately hopped over to amazon and ordered it. I’m a biologist so I’m not intricactly involved in politcs or economics, however, working in academics and living in Massachusetts I am the odd man out on a daily basis and of course every democrat walks around with their chest puffed out these days so I often find myself discussing politcs at work.
Our discussions are mostly good natured, but these kids always think they have me stuck on one point or another. So the question is if we don’t go through with these “stimulus” programs to prop up these companies that are “too big to fall” - what happens to the people currently working as bank tellers or janitors or whatever who are making the minimum wage? The reasoning is that if they have no savings how are they going to eat if a bunch of giant companies go under. I mean, as was eloquently explained in Meltdown these companies obviously have some profitable assets that other companies will buy up and this will save a lot of the jobs, but I digress. This is important because this particular fellow said to me “If you can show me what happens to those people, then I’ll consider the merits of the free market” - For this reason I figured I’d seek out a more expert answer to this question than my own because I think I might be getting close to a breakthrough with this person, and that is why I’m asking here for an answer.
Additionally, and I am probably a little bit ignorant to the position of the Mises Institue and I apologize, but I keep getting the argument that an unregulated market = slavery; and to be more precise that without regulation and intervention that there is nothing to stop companies from all agreeing to pay workers low wages while employers hoard wealth. In my mind, the most important thing is to make sure that the market is determining prices and wages, and for this reason anti-trust laws still need to exist even in an ideal laissez-faire economy. Is that the prevailing position around here or is it that there should be literally no regulations whatsoever?
Addionally, the issue of discrimination has been brought up. I try to argue that the market determines prices/wages, but we’ve even seen in this country within the past 100 years discrimination that obviously isn’t in line with free-market principals, I mean, if a guy can do a job as good as another guy it shouldn’t matter if he’s black/gay/whatever. When I was asked outright my position on anti-discrimination laws I responded that I wanted to think about it because my concern is that introducing legislature often leads to more problems than it solves, but this seems to be to be a potential problem at least in my ability to communicate what I really mean when talking to Obama fanboys. It’s tough being in an overwhelming majority and just discussing politcs and economics as a hobby, so if anyone has any quick thoughts and talking points (preferable) and/or reccomended reading material (also desirable) lay it on me!!
What happens to the people is that they look for work. Asking you to give specific predictions about the future with multiple conditionals is idiotic–tell the guy that. Further, tell him not to confuse his empathy with morality.
Markets regulate themselves. It is only with government intervention/“perks” that problems arise.
There’s nothing wrong with discrimination qua discrimination. However, should an employer discriminate clientelle which the rest of the consumers think should be served, they’ll not patronize said employer.
The first question is difficult for me to answer as far as a completely stateless society is concerned. I’d probably support a bare minimum social net for such situations; alternately the person could turn to charity for their immediate needs. Perhaps some of the more dedicated an-caps on this board can come up with some creative answers.
I would probably turn the question around on its head: why does your counterpart place so much importance on those who have these minimum-wage jobs right now, but none on those who have no jobs at all? Is it not the artificially high wage rate that causes unemployment, and does the stimulus not perpetuate that state of affairs by stopping capital from being redirected toward more productive purposes?
Edit - to me, the crux of the question is about what the person does between the time that he loses his job and the time that he finds another one, with the corollary that he doesn’t have any savings. There’s no doubt that the free market will allow him/her to find more/better jobs in the long run, but the question stands as to what the person will do with no work and no savings. It really doesn’t have much to do with the stimulus - do we normally prevent companies from going under simply because they employ low-wage workers? Of course not; it would completely destroy any advantage that the market process may have. So we see that the principle behind the stimulus is wrong, and we see that the stimulus clumsily handles the true question: what should we do about workers with no savings that lose their jobs?
try reading what is seen and what is not seen a short essay by frederic bastiat. It’s easy to see the workers that lose there jobs if the banking system goes under but to continue to prop up this ineffective not to mention immoral system draws resource away from other sectors where their labor would be more effective.
If your democratic friends were truly the party of Jefferson and Jackson, then they would also support hard money and laissez-faire. Those were the only two Presidents to pay the debt, done by abolishing the central banks of the time.
In a free market unemployment is only a temporery dislocation. When one industry falls below a profitable level, another or more quickly respond to their need for labor. Say, can all the pedogogues. My what a loss! They would have to get into productive industries. It is the case that unemployment is purely voluntary in a free market. Y’know communist countries have acheived near maximum employment, from the very young to the very old, and quite illy as well. It does not go to say that they have been maximumly productive. Famine and socialism walk hand in hand.
Funny; it is actually the reverse. That a highly regulated market is one where all must appeal to authority.It is also the case that such a market produces shoddy goods.
It may be that the argument for antitrust is a red herring. Only government can grant a monopoly. In a free market there is no protectionism that grants special privileges. A business must stay active in the market in order to stay in the market.
Discrimination is a touchy subject. I just want to say that usually such laws create barriers to entry on the market. It’s more foul protectionism. How’s this; If I sell cookies; and it gets out that I only hire lesbian-left-handed-eskimo-midget-albino’s, my reputation is damaged. There would be a small market if any for such a bad entrepreneur. Even if I made really food cookies, I would be giving my competitors an edge.
The stimulus package will have the long term effect of lowering the purchasing power of the dollar: inflation tends to do that. So the folks making the least money will have the toughest time maintaining themselves. With sound money the living standard of every worker tends to go up yearly.
Good luck with your planer friends.
The Discovery of Freedom by Rose Wilder Lane. A good read by a good author. Too bad I can’t find it in hardcover.
You seem to be on the right track anyway, I’m sure the more you read the more you will be able to take down your misanthropic comrades.