The minimum wage

Economics Economics Questions
461

Certainly not. You can have all of those under your logic. As you said, government can not simply discriminate. I am just applying the division of labor here. One office of the government will supply money towards welfare, another towards unemployment, and another for student assistance. But anybody who deems themselves “unemployed” or deems themselves “worthy for welfare” is eligible to take money from these establishments.

My above statement should be satisfactory for your statement. It is like asking why should only farmers recieve subsidies from the federal government? Why not oil companies?

Note what you said: “The government cannot assist one business without setting itself against all other business.” When the government assists the farm business, it is setting itself against ALL other businesses. You are not applying your own logic to farms. Also, our “future welfare” can not be left up to the chaos of the free market? Then why not allow government to control the distribution of food then? You know, something that the soviets, pol pot, and other socialist nations tried?

I use it because I am following your logic to its natural conclusion. First off, you say that farms are the government’s business, and that government should protect it. Now you say it is “none of the government’s business.” Which one is it? Is the government helping farmers or not? If it isn’t helping farmers, then tariffs on foriegn foods are wrong, as well as minimum prices on food. Because these two policies are “helping farmers.” Also, it isn’t always true that if a business has assets, they can be sold or mortgaged. I mean, to a business, a 75 year old building is an asset. But I doubt many other businesses would want that kind of building. It’s very outdated. Land is an asset, but not all land is “valuable.” You ignore things like depreciation and changes in market conditions. You assume that all assets that business holds can be easily sold off, which is not true.

462

You guys seem to have trouble arguing and thinking at the same time, and so I’ll try to slow the pace of the argument down so that you have time to ponder, not only what I have said, but what you have as well. I really hope that you are a lot smarter than your statements, and with only a little reflection, you should come to the same realization

Giving up what you know you need today for something strange and possibly of some future use is an emotional impossibility. Trade may increase the surplus, but trade during real shortage is impossible.

And yet unemployment never increases with the strengthening of minimum wage. Economic activity is always strained in regions with low or no minimum wage, and is always the strongest in regions with an adequate minimum wage. All economic activity stems from the consumer and the consumer’s wage.

The market is a masterpiece of inefficiency. The point of the market is to get profitable consumption of excess capacity. In eating up the excess, it is prone to self annihilation. Your faith in the market is common, but wholly misplaced.

Yes. The primacy of the farm warrants the position. As is, government protects all kinds of business for no reason whatsoever, and in so doing, sets itself against all business. Take the policing of intellectual property. If not for the rights bestowed on Microsoft by the government, that company would not have any assets at all. The protection that Microsoft receives is contrary to the interests of all other business, and allow Microsoft to suck up consumer dollars that other establishments salivate over.

Protecting the process and controlling the process are two entirely different things.

No. You use it to make noise. I said that the financing is none of the government’s business. The transfer of fields from one owner to another is none of the government’s business. Personal finance, that you started to get into that had nothing to do with our conversation, is also none of the government’s business.

463

What a wannabe bureacrat/dictator deem “impossibility” happens in real life all the time, for example: my 7yr old car really needs replacement as it is currently buried in snow and not driveable due to lack of traction; a $35k AWD luxury car would be nice, and I have the money in bank to pay for it without any financing. . . it’s only a phone call away and dealership would be happy to delivery the new car. Yet, I’m not doing it. Why? Because I think the cash may be of some future use value, something I don’t even know what it will be used for at this point. Entreprenuers have known for mellinia to cut back on current consumption in order to make resources available for exploring potential higher long-term returns. No wonder eocnomies run by bureacrats are doomed; the wannabe apprentice bureacrats don’t even know long-term planning/speculation as a possibility.

More groundless assertions. Two starving families may trade the dead bodies of their own relatives so that each family can indulge in cannibalism without eating their own blood relatives. You call that “surplus”?

The two “impossibles” actually happened as Indians cut back on their current consumption of food, in order to make the trade for settler’s metal tools, like I mentioned before. Your theories and assertions are completely detached from reality and historical precedence.

You have it completely backwards. Real unemployment rate has gone up dramaticly in this country in the last half century as minimum wage increased. The official BLS “unemployment” rate has its statistic method gutted since the 1960s. People who are unemployed for long enough as to be ineligible for government unemployment benefits are no longer counted as “unemployed.” More and more people are no longer counted either as employed or “unemployed” in the government statistics, yet they want a job but can’t have one, what do you call that in reality? When a recent Walmart store opened in, it put up a sign for 200 job openings, 6000 people lined to apply; does that sound like an economy with only 5% unemployment? For comparison, applicatin to the highly competitive Harvard undergrad admission is around 12:1, not the 30:1 ratio for the Walmart jobs.

The correlation you find between economic activity and minimum wage is completely backwards. The US did not have mininmum wage in the late 19th century to the early 20th century, at the beginning of that period, 80% of population were subsistence farmers and did not have employment compared to at the end of that period, less than 20% of the population were still on farms when federal minimum wage was introduced. That’s a trenmendous amount of job creation in the private sector without the intervention of minimum wage. Even today, you can compare the Indian and Chinese economic growth rate of 8-12% without minimum wage to our own currently at sub-2% (and probably negative if the correct inflaiton adjustment is used) with minimum wage. Economic prosperity may tolerate the dreamers and political bandits to loot the economy with all sorts of taxes and regulations for a few decades, before the economy is poor again.

Protectionism is a form of control: a government imposition that impinges upon the consumer’s sovereignty.

464

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The thread lich strikes again…

Something you’ve not demonstrated. So sorry, but it isn’t. What you have demonstrated is that you’re the undisputed master of the post hoc, ergo propter hoc fallacy. Good show.

465

Before making any more posts and embarass yourself further, you should really read up on the history of 20th century planned ecomomies. . . or planned economies of all time, dating back to the early colonial times in recorded North American history, and dating back 2000+ years in the old world. Those millions of deaths due to starvation caused by the government banning of markets and replacing them with supposedly “efficient and scientific” government planning were well documented. In fact, the documentation is so thorough, we can literally see A/B tests, as in: millions died of starvation for decades under “planned economy” and the same countries prospered again after the market economy was allowed again.

466

No. Not only is the basis of your argument wrong, but the conclusion doesn’t even follow your own argument.

You tell me why how someone spending their own money on themselves (capitalism, free market economics) is less efficient than Having the government take someone elses money, and spend it on someone else (regulation, welfare, socialsim). for the exchange of goods and services, which includes jobs, there is nothing that we know of in the physical universe that is more efficient than a free market.

I don’t know if you live in the US, however take a look at the most regulated, aspects of our country. Education, health care,social security…

Now ask yourself what are the least efficient aspects of our country? Education, health care, social security.

The most anti-poor, most anti worker concepts are bred from socialism and its line of thinking. Look at the baltic and celtic tigers…they adopt free market principles, and guess what happened? Same with hong kong. Or dubai, which in the middle of a God-forsaken desert…

467

You really have got to be smarter than that! In what way are you describing today’s hunger being ignored in the hopes of future gain?.

.I couldn’t believe you actually put this stupid story out. And you repeat it??? Are you THAT gullible!!!

If the surplus was not going to be sufficient to provide excess to the settlers, then the settlers would have been poorly advised to arm the natives. Hunger would have eventually led to raiding and pillaging.

By your say so alone. Minimum wage was enacted in 38, at the bottom of the recession of 37. Unemployment has never been worse. The NLSA was gutted for Puerto Rico, and that island’s unemployment remained double the mainland’s until over the last year or two it plugged the holes and made the island’s labor standard near equal to the mainland’s. Now it is getting its economy on track.

The market cannot be banned. When the government tries to ban markets, they only push the market underground, and without protection, business proves very profitable. The unprotected market is what the old USSR had. Are you in favor of removing copyright protection from Microsoft? If not, then you are not in favor of an unprotected market! Modest guidelines protect the market without controlling the market.

So he said/she said. My understanding vs your beliefs. I know the basis of your beliefs. I’ve been there. You will not examine my foundation because you are comfortable in your belief, not because you find any error in what I have said.

You only prove my point that the concept is common, not that the concept is correct.

468

My post was in reply to your ealier statement regarding giving up “today’s need” not necessarily food/hunger. However, if you want to talk about hunger, yes, I have skipped lunches before in order to buy an ethernet card when I was in college (when a 10BastT card cost over $100). Yes, I was hungry for a while.

There was no reason for my grandmother to lie to me about what happened in her own village, witnessed with her own eyes, half a century ago. She wouldn’t be where she was telling me the stories if not for hunger making her leave her ancestral farming village, in order to go to towns where the government officials were distributing food looted from the farmers . . . needless to say, the result of depopulated farms was even less food for the whole country. Such was the horrors of government planning.

There was no “would”; it was “did.” The settlers gave the indians metal tools in exchange for food. The settlers benefitted from having food, and the Indians benefitted from having metal tools, for cultivaltion and raiding other Indians. Comes to think of it, if you think trade is impossible without surplus food, how can warmaking be possible without surplus food? Both “impossibles” are obviously false. Both trade and war making are exchanges, althought free-will trade tend to be more efficient than political exchange done through violence or the threat thereof (i.e. war making, taxation and regulation).

That’s a complete farce. The ratio of job holders to the entire population is much much lower today than it was back in 1937. The government “unemployment” number has no real meaning as it excludes millions of people who are no longer eligible for unemployment benefits, hundreds of thousands of people who have to stay in school because they can’t find jobs, and tens of millions who are on entitlement programs because they can not find productive jobs.

Puerto Rico economy grew rapidly in the second half of the 20th century due to heavy capital investment by private businesses from the US. Its per capita income is lower than the mainland because it had a very low starting point . . . the island was poorer than Cuba or Mexico when the US acquired it during the Spanish-American War.

Yes, I’m for removing copyright protection from Microsoft, as there is no place for government enforced monopoly. Next question? Outlawed business may or may not be profitable . . . it’s kinda hard to run a business profitably if the sole properietor is in jail and get tortured. Government attempts to ban or even redirect market activities certainly have a bearing on the market place: such regulations introduce another layer of tax-eaters whose sole function is to consume tax money and get in the way of free exchanges through the threat of violence, which is also costly.

I think I’m starting to see where you went wrong with your theory: you followed the classic statist fallacy of Zero-Cost Assumption of government regulations. While trade can happen long before there is food surplus, it is certainly true that a professional trader in a free market has to ensure that his customers at both ends of a pair of trades find themselves better off through the trades in order to ensure his own survival. The Zero-Cost Assumption presumes that the two customers at both ends of a pair of trades should be able to find each other without the middleman, thereby cutting out the middleman (who in this ideology is a net resource eater). The reality is that in most markets, free trade is a value creator, even with a middleman. Without new technological advance that makes him unnecessary, replacing a free market trader with a set of government regulations to fix the exchange ratio between two producers would only lead to a new layer of middlemen called “bureacrats,” who would be necessary to enforce the government regulations. The bureacrat in the middle is nowhere nearly as inclined as the free market trader to create real value for the producers at either end of the trade, and he has the government power of violence to back him up; it doesn’t take long for either of the two producers to figure out that instead of producing more, he should be spending presources to bribe the bureacratic middleman in order to get a more favorable exchange ratio. What you end up with is essentially a government “trader” who doesn’t care what service he renders to the producers because he can exact payment from the producers through violence in the name of “taxation”; the regulations that he promotes doesn’t have to reflect changing market dynamics at all because his pay is dependent on the pleasure of his superior not the people who receive his service like customers to a free market trader.

469

Actually, it’s because you’re full of hot air. So far you’ve shown very little knowledge of anything pertaining to economics. Denouncing economists may earn the admiration of the folk you normally cavort with, but it will earn you no credit here. Carl Menger dealt with this surplus nonsense over 100 years ago - read his Principles of Economics, especially the section on the theory of exchange.

470

I stopped trying to follow this dead horse a long time ago, but from what I can gather, Arman seems to think that the purpose of the economy is to sell or dump surplus goods, thus making the mistake of ignoring why these “surplus” goods were produced in the first place. Consumption makes no sense unless one understands production, and vice versa. Supply and demand are two sides of the same coin, not separately autonomous functions.

471

“My post was in reply to your ealier statement regarding giving up “today’s need” not necessarily food/hunger. However, if you want to talk about hunger, yes, I have skipped lunches before in order to buy an ethernet card when I was in college (when a 10BastT card cost over $100). Yes, I was hungry for a while.”

I’ve heard friends of mine do this too. He went without extra food for a month in order to save up for computer parts. I have personally stayed hungry in order to play my video games longer. So there are people out there who are willing to go hungry in order to gain something that is not related to food.

And “modest guidelines” lead to controlling the market. As Mises has said, you can not have a “middle of the road” economy. It will only lead to more and more regulations.

I wouldn’t necessarily assume that every banned market will be pushed underground. I mean, if we banned the VCR market, I doubt there would be a huge underground market. You would have to look at the cost/benefit analysis.

472

Yes it does actually. Financing is the government’s business if you consider you want to protect the “food industry.” How do you protect the industry without worrying about the finance of the industry? If the domestic industry fails and people then have to rely on foriegn food(which you oppose), then you will HAVE to get involved with the finance of the food industry. But alas, you say finance is none of the government’s business, so therefore, you oppose protecting the food industry, when you made it clear many posts back that you want to protect farmers from foriegn competition.

473

The industry can only be protected on the sales side. Financing is the business of the entity, and you can’t help one entity without hurting another entity. And what does that have to do with your use of a credit card??? Nothing. You make statements to make noise.

The underground market is very competitive for the consumer dollar, to the point of running gun battles. Not every market would survive.

That is just plain fool talk. On the right, you have full goose stepping authoritarianism, and on the left you have unbridled individualistic anarchy as in the throes of revolution. Extremes are evil. Revulsion of moderation is just plain wrong.

You guys have never known uncertainty over your next meal. You are quite certain that you will not die of starvation. In this world of plenty, skipping a meal is not an emotional impossibility. In a world of scarcity, it would be.

That is over simplification. A better analogy would be an engine and caboose of the same train. It is commonly accepted that production is the engine of the economy. I contend that consumption is the drive, and that production always follows.

If you find his arguments so compelling and comprehensive, why don’t you use some of the points against me? Books of that era I generally find rather oblivious to reality, though quite intellectually compelling. I’ve no interest in reading more of them right now, though if I happen across a copy I might give it a perusal.

I get no admiration for my ideas. I only tell you what I know is right.

Adults tell their kids about ghosts, goblins, witches, santa Claus, Easter bunnies, tooth fairies, and cannibalism to entertain them, without, it seems, regard to how such stories might warp the child’s mind.

Which meant that the natives had food more than sufficient for their own needs and the settlers needs. If food had been indeed scarce, then there could not have been exchange. If you cannot get food in quantities that you believe you need through exchange then you will take and will not exchange. Scarcity renders exchange impossible.

The study of economics today is focused on explaining away reality that conflicts with the mind set of the economist.

But there is always competition that really enjoy the demise of that business. You can’t kill the industry by killing the individual business.

If you want to reduce bureaucracy, then eliminate diverging tax/user fees/fares/tariffs/rent seeking etc etc. The one tax payer need only meet with the one tax collector in a year. When the politician thinks about another way to get into your pocket, bureaucracy blooms. The current notion of consumption tax is to the point. IF the sales tax were indeed to eliminate the income tax, then maybe it might be up for discussion. In the experience of England and Canada, it is just more bureaucracy layered over the old, and you guys are being led down the garden path over this.

474

No its your coment that is nonsensical…protect it from the sales side? As in force people to buy it? Then you are protecting the finances of the business… How do you think businesses finance operations? Through sales.

Can you say something coherent for once? It doesn’t even have to do with this discussion…For purley out of curiosity/academic reasons I want to see if its possible.

475

The complexity of supply and demand is an oversimplification? I contend that BOTH are the ‘engine’ of the economy. One without the other is pointless. You may be trying to say that the desire to consume drives production, but it’s equally obvious that production must precede actual consumption. It is impossible to consume something before it’s produced.

476

Alright, this thread has become pretty much pointless, and has gone heavily off track. Arman, do yourself the favour of actually taking the time to read an economics book rather than arguing against strawmen and figments of your imagination. I certainly have no obligation to educate you. If any of you want to continue this, I suggest you do so by PMs.