Please explain what you mean by “protected by the government.” What actions does the government take? Also, the international trade of food puts our well being at the mercy of foriegn governments? Why doesn’t that same logic apply to steel? Or even coal? Oil? Natural gas? Why only food?
Also, is this sort of logic saying we should have a protectionist policy in blocking exports and imports of food? All food perhaps? There are times where certain foods have bad years. For example, florida and california could have trouble with their orange crops. They might get destroyed somehow. So then how do we supplement this? Also, can the same logic apply to Japan as well?
For your reply Arman, please include the following:
what SPECIFIC actions must the government take to insure an ample food supply?
why your logic of international trade in basic food(please define “basic food”) does not apply to other things like basic oil…basic steel, and even basic coal?
Why couldn’t foriegn farmers simply make more profits going to other countries for their food instead of the one you speak of?
A large import duty applied to basic grains or flour would allow farmers to store bumper crops with expectancy to sell at a profit somewhere into the future.
All other commodities are quickly elastic in supply, and very replaceable in consumption.
When farmers have a bad crop year, the price of their crop should go up in their region, and so their profit should be somewhat close to even. With the prevalence of international trade, every region’s price remains as if it had a bumper crop, while its production falls way off, leaving local farm business in peril
Ok, so basically, a high tax on imports. But wouldn’t you think countries seeing this would respond in a negative way towards us when it comes to exports? Do you not think our trading partners in food will retaliate and not buy OUR goods that we export? Or do you believe very few companies in the US rely on exporting and their only sales come from the US?
Secondly, how high of a tariff(import duty?) I mean, some people would be willing to pay that tariff..and food from outside the US can still come in. The government would simply be collecting revenue…and not stopping the import of foriegn food…which is what your goal was in the first place. How high must the tariff be?
Third, how are things like Oil…Steel, Coal, Natural Gas, and other things more replaceable than food? I mean, oil in the crude form is very unusable. So is steel.
Take for example the effects of the smoot-hawley tariff act. It raised tariffs(import duty) on more than 25,000 items(average tariff increase was 59%). The export industry in the US was devastated. The italian government responded to the tariff by raising their import duties on american made cars. Auto sales of american cars in Italy fell by 90%. The french practically shut out all american goods altogether.
“When farmers have a bad crop year, the price of their crop should go up in their region”
This is not necessarily true either. If orange farmers in florida have a bad crop year…it doesn’t mean orange farmers in Brazil…or california had the same effects. They could simply make up the difference. Supply would be dropped. But if you have a bad crop year…you can’t sell at that higher price right away. That’s like saying drug dealers get arrested in a particular ghetto…and the price of acid skyrockets. Therefore, the drug dealers will now make more money.
Also, I will have to ask you what is a bumper crop. From wikipedia, I see this:
“In agriculture, a bumper crop refers to a particularly good harvest yielded for a particular crop.”
So basically, a bumper crop is a cash crop from my understanding. Now can you give some examples of a “bumper crop” that farmers would store if a huge tax(give a percentage or number of this “large tariff”) on imported grains and flour(which are very broad categories…and open to interpretation…so the tax needs to be more specific than that).
But I also read that bumper crop also refers to a crop that exceeds expectations by having an excellent harvest…better than normal. How can you expect certain crops to have better than normal results?
Also, how can you guarantee this large tariff will stop all food from coming in?
To Arman’s credit, he didn’t say that everything about Japan would stay the same–there would be “minor transition pains” but still, in the end, have a “vibrant economy”. It doesn’t help his point much, as the statements he’s made are certainly false, but it’s slightly different from what you’re claiming he’s said.
I thought he said that about michigan…but you could be right. But saying “minor transition pains” doesn’t tell me much to begin with. Also, could you look at his claim about the food supply? Do you have any comments to share about it?
Please stop the personal attacks. This thread is about the minimum wage, not allegations as to the learning capabilities or lack thereof of users on this forum.
I know I’m getting a bit picky here, but what exactly is “basic food,” and where does one draw the line between bread and Swiss chocolates? Should bureaucrats decide what counts as basic food, and thus should not be exported, and what counts as food that should be exported?
On that note, it is also well understood that building materials are other prerequisites for economic activity. Just as for commerce to take place, people must be alive and reasonably nourished, they must also be alive and reasonably sheltered. While, yes, new building can be put on hold for years or decades without too many ill effects, just as new food growth can be put on hold for weeks or months in some places, there eventually will come a point where people start dying from the effects of lack of shelter–exposure, say, in winter months, or heatstroke in summer months. Should, on that basis, regional governments take measure to ensure that sufficient building material, whether brick, steel, glass or concrete, is available from its locale? Should international trade in building materials be soundly discouraged? Is excess steel better stockpiled than shipped abroad?
That’s one of the forces that lead markets to clear: a decrease in supply relative to demand leads market prices to rise; others rush into the market, taking advantage of these high prices and thus high margins; this causes prices to decline again. Also, perhaps the reason why local farm business is in peril is that it lacks the comparative advantage against farmers from other places (cf. Ricardo) and thus the land would be put to better use, as would occur as part of the market process in such a situation. Now perhaps you wish to interfere with the market to ensure certain prices, and thus overrule market clearing and comparative-advantage competition; very well, but be aware that minimum prices cause an excess in production. This was shown theoretically by Mises, and empirically by the huge amounts of food in the US school-lunch program. (Essentially, price props on farmers creates production in excess of what would occur on the market; the government buys this excess and uses it for the school-lunch program.)
We went through this already: the definition of scarce is “less han the demand.” If you want to go by the Economics definition of “demand,” then Economics also defines all resources with limited availability as “scarce.” If you want to go vernacular on us, then the word “demand” means “want” without any regard to whether the person can afford to pay for it; i.e. someone who is hungry has a demand for food, regardless whether the person can pay for it; in that sense, without the price qualifier, “demand” always exceed “supply” for any tangible item that usually has a price on it . . . otherwise, there wouldn’t need to be a price.
You are entirely detached from reality when you stated that any town would have a vibrant economy even if it were to be suddenly isolated from the rest of the world; most cities and towns in the US do not have enough land to produce enough food to feed the people currently living there. New England has not been self-sufficient in food for at least two hundred years; that’s why Yanky traders braved the Atlantic storms in their leaky wooden boats.
“Scace” is defined as “less than the demand” in the dictionary. You only came to your warped conclusion by defining away “demand” by the price qualifier. In the normal English sense of the word “demand” there is no price qualifer: someone who is hungry and wants a loaf of bread counts as a demand for bread regardless whether he can afford it. Only among the Economist jargons is “demand” defined as the want of those who can pay (those who can not pay do not count); in that context, all limited resources are also defined as “scarce” because Economists understand that they are studying the allocation of scarce resources when they pre-suppose price qualifier when analysing “supply” and “demand.” If an item is truly not scarce, i.e. always available when someone wants it even without the abilty to pay, there wouldn’t be a price tag. The very action of of paying for something means juggling priorities; that means, there isn’t enough supply of the goods to meet all demands/wants (hence the need to cut demand quantity down to price-qualified economic demand)
No redefining attempt on my part. You on the other hand used the Economics definition of “Demand” without realizing that you delved into Economic jargons that presume scarcity when the Econmic “Demand” (with price qualifier) was invoked.
You will have a vibrant career future in Kim’s North Korea What you have written is pretty much the basis of the “Jeju” (self-sufficiency) national policy of North Korea for the last half century. I’m sure, the North Koreans are enjoying a much more vibrant economy than New Yorkers have
For what it’s worth, food is perishable. That’s why money was invented many thousands of years ago: to be able to “store” excess food from one year in the form of money, and trade it back to food in the lean years. That’s why counter-party in trade has been a necessity in life for thousands of years. That’s also why free-market trade beats top-down totalitarianism.
“I can make Wal-Mart raise their price on corn and they will not sell less corn.”
equals
“I can make John raise his price on his labor and he will not sell less labor.”
so
Wal-Mart is trying to sell corn. You make Wal-Mart raise the price.
John is trying to sell his labor. You make John raise the price.
Let’s say the minimum wage is being increased from $5.15 to $7.25.
While John’s labor can become more productive, his CURRENT productivity has been priced at $5.15 by his current employer. You’re telling me, out of all the employers that are paying $5.15/hr for something, if the price were hiked to $7.25/hr, none of these employers would discontinue the purchase of that labor serivce?Not a single employer would decide not to purchase that labor service because of the price increase? That’d be like saying if Wal-Mart has 1 million repeat, corn-buying customers not a single one of those customers would buy a single can less of corn if corn went from $.52 to $.73.
You’re saying no one will ever be laid off due to minimum wage hikes because all this minimum wage hike does is redistribute money. It takes from the business owner and puts it into the hands of the minimum wagers. The minimum wager will then spend this extra money and this spending will make it go back to the businesses it was originally taken from. Right?
So if I rob someone on the streets, the victim will not be hurt because I’m going to spend his money and the spending of that money will benefit the vicitim because it will be spent on the vicitms’ goods and/or services?
On that note, it is also well understood that building materials are other prerequisites for economic activity.<
There is absolutely no business that the government should be interested in protecting. The only prerequisite for economic activity is excess food. Everything else is elastic and replaceable in the market. How much steel goes to landfills? Increase the demand and build a new recycling industry. Ever here of plastic lumber from recycled materials? Knock out a supply of wood, and there are other options. Nothing else is a basis to the economy except excess food.
Should bureaucrats decide what counts as basic food, and thus should not be exported, and what counts as food that should be exported?<
Its not even about preventing export, but by blanket tariff on imported grains, or even all imported food, you put a protection over the local agribusiness, allowing expansion, especially into storage facilities. You should expect other countries to follow suit, and that’s good. Prosperity tends to breed peace.
I don’t like bureaucratic decisions either, but if you at least give them an intelligent guide, maybe they might shy away from excising according to the effectiveness of the lobbyist (I know, big maybe). Thing is, the market tends to work very well with some minor protection. It teeters on collapse with none. But then a successful economy tends to perpetually expand bureaucracy.
Also, perhaps the reason why local farm business is in peril is that it lacks the comparative advantage against farmers from other places (cf. Ricardo) and thus the land would be put to better use, as would occur as part of the market process in such a situation.<
Having a poor crop year is the farmers’ lot. Every now and then the crops will be poor for a few years in a row. There is no better use for land than providing excess food to the economy.
While John’s labor can become more productive, his CURRENT productivity has been priced at $5.15 by his current employer. You’re telling me, out of all the employers that are paying $5.15/hr for something, if the price were hiked to $7.25/hr, none of these employers would discontinue the purchase of that labor serivce?<
The employers don’t buy the labor, but market the labor. It is not a cost to the business, but more of a debit against sales income. In the macro, the more money spent on labor, the more money in the consumers (laborers) hands, and it is the consumers that are actually purchasing the labor service, not the business.
In the normal English sense of the word “demand” there is no price qualifer: someone who is hungry and wants a loaf of bread counts as a demand for bread regardless whether he can afford it.
Where’d you learn your English???
1.
to ask for with proper authority; claim as a right: He demanded payment of the debt.
2.
to ask for peremptorily or urgently: He demanded sanctuary. She demanded that we let her in.
3.
to call for or require as just, proper, or necessary: This task demands patience. Justice demands objectivity.
Law.
a.
to lay formal legal claim to.
b.
to summon, as to court.
–verb (used without object)
5.
to make a demand; inquire; ask.
–noun
6.
the act of demanding.
7.
something that is demanded.
8.
an urgent or pressing requirement: demands upon one’s time.
Economics.
a.
the desire to purchase, coupled with the power to do so.
b.
the quantity of goods that buyers will take at a particular price.
10.
a requisition; a legal claim: The demands of the client could not be met.
11.
the state of being wanted or sought for purchase or use: an article in great demand.
Yes, a most urgent request is a demand, but nowhere can it be construed that a demand is a want without a qualifier. Want with the authority (ie the money). Your confusion of want with demand is as ridiculous as confusing scarce with limited.
But that confusion aside, you know what it is that I mean, and feigning oblivion is just obstinate stupidity.
"You’re telling me, out of all the employers that are paying $5.15/hr for something, if the price were hiked to $7.25/hr, none of these employers would discontinue the purchase of that labor serivce?"
You didnt answer the question.
So regardless of how much he pays in wages, it’s not really him paying it but the consumers. And it doesnt really matter what the wages are because it’s simply a wealth transfer and that wealth will come back to the business in the end. And the consumers are going to value the labor services regardless of the price of the labor service because the laborer is one of them, a consumer. And the consumers just circulate their money bac to everyone’s pockets anyway.
Let me ask you, What economists’ work do you read? Give me an author’s name. No, I think you can think for yourself. I do a lot of self-thinking as well. But I want to see where your ideas come from. It sounds like mainstream stuff. I’d like to examine those ideas and compare it to the criticisms by much more learned free market thinkers than myself. It just seems in your idea of the market there’s no rational decision makers. There’s just all this stuff that just kinda happens because that’s the way it is.
(And I dont care what you say, if millions of employees de facto raise their wages from $5-$7, there will be at LEAST 1 employer that will not agree to that price. It doesn’t matter if that’s the right decision or not. Someone is going to get laid off)
Arman, who’s quote is that? If you want to quote someone, just highlight the text and click QUOTE. You can do this as needed. You may already know this, but I’d like to know who’s being quoted.
What you have written is pretty much the basis of the “Jeju” (self-sufficiency) national policy of North Korea for the last half century. I’m sure, the North Koreans are enjoying a much more vibrant economy than New Yorkers have