UW Student Finds Free Exchange of Ideas Lacking

[Economist]

Because individuals aren't making the decision, individuals are being subjugated by the "market" - corporations determining what their wages are. In a democratic socialist society, people vote for what the minimum wage should be. You speak as if people "want" to work for less than minimum wage under the coercion of the market. Your whole argument is still predicated on corporations and businesses knowing what's best - that the market can determine everything.

Corporations don't control what peoples wages are any more than you control how much steaks costs. I thought you said that you took intro economics? Then how come you don't understand the simplest applications of supply and demand? As Alfred Marshall stated, "We might as well reasonably dispute whether it is the upper or under blade of a pair of scissors that cuts a piece of paper, as whether value is governed by [demand] or [supply]."

Again, answer me this. If I want to work for $1 an hour (and I find an employer who will take me at this wage). Why (because of some legislation that you voted for) should it be illegal for me to enter in this voluntary contract with an employer for $1 and hour?

And I definitely don't think that corporations know what's best for me. But I also don't think that you or some politician know what's best for me. Corporations only get rich off me, if I choose to buy their product. I only work for a corporation if I choose to. However, when it comes to government officials, you must pay (assuming you're a tax payer) even if you did not vote for them. What you're not realizing is that markets do not work best because corporations decide everything. Rather markets work best because they're based on allowing many individuals to pursue their own interests. As Milton Friedman said, "If I want a blue tie, I get a blue tie. If you want a green tie, you get a green tie."

Low wages are not determined through the coercion of the market. If this was the case then most people would earn the minimum wage. In fact, only about 2% of the population over age 25 works for the minimum wage. Low wages usually happen to employees who have low skills, low education, low work experience, etc. Once again, answer my question: If a minimum wage of $8 an hour is desirable, than why isn't a minimum wage of $20 an hour even better?

Also, you said something about me being against unions. Actually this is not true, I have no problem with unions, as long as they do not have legislation to protect them. Such as legislation that says that businesses must hire from unions, and the like.

So you're saying that a CEO of a Fortune 500 is more 1000x "productive" than the wage-labourer? That is essentially what the income disparity is, and you saying "if you work more, that means you are more productive". But guess what, a lot of people making lots of money aren't productive at all! They just own the stocks and shares, or the means of production to society. This is capitalism, not meritocracy.

Actually this has more to do with the economics of tournaments. If you really want to inform yourself you should read some stuff about this. It's the same reason that an athlete might be slightly better than another athlete but make triple. In sports, essentially people care about watching the best of the best, so consumers are willing to pay much more for slight increases in talent. Same thing can happen with CEOs, as sometimes it's imporant to have someone that is slightly more productive. Furthermore, these are not the norms in the economy (but more like the exception to the rule). So for most practicle purposes, people get paid what they produce.

And for the people who got rich off stock, they are either incredibly lucky or incredibly smart, because stocks can sometimes be a risky game. They choose to invest their money in a company that needed funds, and if worked out for them. The flip side is that if they chose wrong, they would have lost that money. They were willing to take a risk with their own money and it paid off.

You think that a free market is where individuals make decisions for themselves? Yes, absolute freedom for Iraqis is being able to choose between Pepsi and Cola when they can't even get electricity or running water.

Nope. But freedom to choose Pepsi and Coke is usually related to freedom to make many more decisions. Furthemore, people in capitalistic societies tend to live longer healthier lives, be more educated, have more liesure time, more freedom in who they work for, etc, which I think you would agree are much more important than choosing between drinking Pepsi or Coke.

Countries have child labour because their government cannot afford social services to put children in school. Why is that?

Why can't their government afford to put children in schools. Because government creates absolutely no wealth. Individuals on the other hand are able to create wealth. When someone takes some plastic and some electronic equipment that is worth $100 and turns it into a computer that costs $250, they have created wealth ($150 to be exact). They took resources and found a more efficient use for them. People used to only value those resources at $100 but now they value it at $250. Governments on the other hand just tax the wealth that others create. Economics is not a zero sum game. Bill Gates is not rich at the expense of other people being poor. Rather Bill Gates has created wealth. Similarly, when people go to work, they create wealth. When multinational corporations stay in business, it's because they are creating wealth. If they fail to produce wealth they will go out of business. For example, if I took those $100 of resources and made something you'd only pay $75 for, than I lost money, and I wouldn't continue for very long. Essentially the market works as feedback to tell others whether they actually produced something of value or not. Socialism fails to produce quality goods and services because it lacks this important decentralised feedback.

And you're asking me why people work for a wage less than 1 share? Generally because they are uneducated and live in horrible poverty and that job is the highest paying job they can get (which is why they are doing it). Education is very important from an economic point of view, precisely because it is highly correlated with productivity. Essentially, these people are working for a low wage because they have no better alternatives. It also seems like government is the likely cause of many of these countries poverty. And various policies which attempt to address this poverty, usually don't work (in fact, they can often make it worse). So why would you want to take away their highest paying job opportunity? You're sick. Implementing minimum wages doesn't work in this case. The company may fire some people, or other higher skilled workers in the area will now compete for these jobs (an in fact will likely get them). So even if the employment stays the same, it might be completely different people, and those who originally worked there are back to a lower paying job opportunity. I wish it wasn't the case, and I wish your feel good policies actually could help and make a difference, but in reality they don't. I'm not saying that it's perfect. What I am saying is that it's optimal. On another note, job experience generally increases productivity. When countries are becoming industrialised, they may start off making cheap toys or clothes, but generally as people start accumulating more skills and wealth, they are able to move into better paying higher skilled jobs. After generations of this, it can actually make a pretty big difference. How do you think countries have growth rates year after year?

Why can't they put food on the table? Is it because they can't work hard enough?

No, it's not about working hard. Effort doesn't necessarily matter. Like the phrase says, "work smarter not harder." The reason people have high paying jobs in the US, is because they're generally productive and highly skilled. Why make toys, when you can develop computer programs? Per hour of work, people in the US are more productive, not because of hard work but rather because of human capital. Just like the reason college graduates get paid more than high school drop outs is not because they work harder, but rather because they have greater human capital. And if someone doesn't currently have the skills to develop computer programs, you're not going to help their poverty by getting rid of all the toy making jobs.

See you're saying that people want to work for $3 an hour as part of their "rational self-interest". But I can tell you that they would rather work for the minimum wage than work for $3 an hour for the same job. But I can also tell you that the corporations would rather pay $3 an hour than the minimum wage. This is not an issue of efficiency or marketplace freedom, it's an issue of corporate domination. Yes, raising the minimum wage here causes corporations to go offshore - but guess who they exploit now? Instead of exploiting American workers, they exploit workers from the Phillipines, Myanmar, and every other place that manufacturers your wardrobe.

Again as Alfred Marshall stated, "We might as well reasonably dispute whether it is the upper or under blade of a pair of scissors that cuts a piece of paper, as whether value is governed by [demand] or [supply]." In other words, it doesn't much matter what they each want, it matters how their wants interact with each other. I also would rather work for $50 an hour than $10 an hour. But guess what, that doesn't mean jack **** because someone will not pay me $50 an hour (I'm not that productive yet). Furthermore, the corporation would rather pay somebody $1 an hour, but again, that doesn't mean jack **** because if people aren't willing to work for it, then they won't have employees. How about another analogy since this economics thing really isn't your cup of tea. I want to date Tyra Banks or Heidi Klum, but guess what that doesn't mean jack ****.

I also find your use of the word exploitation incorrect. Is it really exploitation when a company goes into a country, and people voluntarily choose to work at a certain wage? I already pointed out that people work at these jobs willingly, because it's their best opportunity, so how exactly is that exploitation?

And please actually answer my question this time, instead of cherry picking quotes, and launching personal attacks.

 

[ShawnD]

Again, answer me this. If I want to work for $1 an hour (and I find an employer who will take me at this wage). Why (because of some legislation that you voted for) should it be illegal for me to enter in this voluntary contract with an employer for $1 and hour?

You could use the same argument against OSHA. Lots of people are willing to work in extremely dangerous conditions, but I don't see anybody *****ing about OSHA and the cost to comply with their standards. Fume hoods in chem labs cost several thousand dollars each. Why don't we just scrap those and do it all on the bench? A guy testing SO2 should just stop being a ***** and hold his breath; he doesn't need an air pack.

 

[Economist]

You could use the same argument against OSHA. Lots of people are willing to work in extremely dangerous conditions, but I don't see anybody *****ing about OSHA and the cost to comply with their standards. Fume hoods in chem labs cost several thousand dollars each. Why don't we just scrap those and do it all on the bench? A guy testing SO2 should just stop being a ***** and hold his breath; he doesn't need an air pack.

Actually, the economics on safety regulations are quite clear. Increased safety in work environments generally leads to lower wages. I also don't agree with most government imposed safety regulation in the work place. If someone is willing to work in a dangerous environment, who am I to stop him?

 

[opus]

Actually, the economics on safety regulations are quite clear. Increased safety in work environments generally leads to lower wages. I also don't agree with most government imposed safety regulation in the work place. If someone is willing to work in a dangerous environment, who am I to stop him?

Wow, so we should get rid of all regulations in the market? Who cares about lead in our water, mercury in our food, as long as those corporations keep cutting costs and corners to bring the savings to us, the consumer!

EDIT: you know what, this video can explain things better than i ever can, also with cute drawings

http://www.slatev.com/player.html?id=1334447289

 

[Economist]

Wow, so we should get rid of all regulations in the market? Who cares about lead in our water, mercury in our food, as long as those corporations keep cutting costs and corners to bring the savings to us, the consumer!

This is such an innaccurate picture. Do you really think the reason companies don't poison us is because of the FDA? Do you also think it is in a profit maximizing firms best interest to intentionally hurt their consumers? I can just hear them in the board room saying, "I've got a wonderful idea! Let's put mercury in their food, then they will continue paying us for our product! Muhahahaha." Companies don't act safely because they are compasionate, rather they do so because it is in the their financial best interest. In other words, it's hard to stay in business when you mistreat customers, which is what really keeps companies in check (not the government).

Also, how do you explain the numerous companies that go above and beyond the safety regulations? You still haven't answered my related question, of how only like 2% of the US work force over 25 gets paid minimum wage? If these companies were so evil and had so much power like you say, then why wouldn't more peoples' wages be the minimum?

EDIT: you know what, this video can explain things better than i ever can, also with cute drawings

http://www.slatev.com/player.html?id=1334447289

And you know what? This video can explain it much better than I can. Watch Volume number 7 titled "Who protects the consumer?" It's in the bottom right in case you don't see how to change volumes.

http://ideachannel.tv/

Edit: I just watched your video (I hope you may extend the courtesy of watching mine). I would actually like to point out that I am not against environmental regulation, because you have standard negative externalities (although I may be skeptical of how governments will actually tackle the problems). The same negative externalities don't quite apply in these other industries. In other words, environmental regulation is necessary because two individuals acting through voluntary exchange are more likely to harm third parties. But when an individuals chooses to work for less than the minimum wage or work at a dangerous job, then you don't have as many negative externality issues. Mostly likely he choose this option because he deemed it as his best opportunity for the moment, and if he is harming anybody, it is himself, and last I checked the government isn't a parent or a nanny who is there to protect from yourself and make sure you don't make bad decisions.

 

[mheslep]

Flawless idea, except Iraq has been a disaster in capitalism and democracy.

Iraq has had two elections; in the National Assembly election of 2005 ~12 million people voted or ~79% of those registered. Apologies for letting a fact get in the way of your opinion.
http://www.sptimes.com/2005/12/29/news_pf/Worldandnation/UN_led_team_finds_Ira.shtml"
http://fpc.state.gov/documents/organization/68287.pdf"

 

[mheslep]

. And guess what? Norway, Finland, Sweden, Denmark, and Iceland all top off the US in most humanitarian rankings.

For the general population of the country (not everybody) the http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita" , an indicator of, say, how much food one can buy with their income, has US #2 to #6 ; Sweden is #15 to #18. Now take away some niche countries that average point sources of wealth over vary small populations and the US is easily #1: Norway - North sea oil >50% of exports/4M people; Qatar - gulf oil/900k people; Luxem. - banks/480k people; Ireland (mostly Dublin, great town) - interesting but most of the $ is going offshore.

But to be fair we should compare the US to industrial democracies of some comparable size and in that case the US is clearly #1 followed by Canada - again doing well with oil exports, UK, Japan, Germany - might give them a break after absorbing the east, and France, which one might say has the most socialist economy of the 5, last.

If one wanted more of a compassion index, one might look at charitable donations in which the US is #1, a generous ~1.5% of GDP, UK comes in 2nd at half that (percent of GDP)

How about the best place to get a job? Unemployment rates: Japan #1 4.1%, US 4.8, UK 5.4, Canada 5.9, Germany 7.1, France 8.7

 

[opus]

Iraq has had two elections; in the National Assembly election of 2005 ~12 million people voted or ~79% of those registered. Apologies for letting a fact get in the way of your opinion.
http://www.sptimes.com/2005/12/29/news_pf/Worldandnation/UN_led_team_finds_Ira.shtml"
http://fpc.state.gov/documents/organization/68287.pdf"

"Yet due largely to political pressure from the international community, the elections went ahead in January 2005, under a misguided "closed party list" system. Rather than choosing a specific candidate, voters across the country chose from among rival lists of candidates backed and organized by political parties."
- http://www.iht.com/articles/2007/11/02/opinion/edallawi.php

Yes, because a successful democracy (a "fact" in your book) is a place of sectarian violence and non-stop religious rife.

EDIT:

For the general population of the country (not everybody) the http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita" , an indicator of, say, how much food one can buy with their income, has US #2 to #6 ; Sweden is #15 to #18. Now take away some niche countries that average point sources of wealth over vary small populations and the US is easily #1: Norway - North sea oil >50% of exports/4M people; Qatar - gulf oil/900k people; Luxem. - banks/480k people; Ireland (mostly Dublin, great town) - interesting but most of the $ is going offshore.

I said humanitarian rankings. No one doubts that the US is the richest country in the world (which GDP/PPP measures). I don't know what point your making, because clearly it does not refute the success of the democratic socialist models in Europe.

But to be fair we should compare the US to industrial democracies of some comparable size and in that case the US is clearly #1 followed by Canada - again doing well with oil exports, UK, Japan, Germany - might give them a break after absorbing the east, and France, which one might say is the most socialist of the 5, last.

If one wanted more of a compassion index, one might look at charitable donations in which the US is #1, a generous ~1.5% of GDP, UK comes in 2nd at half that (percent of GDP)

You're completely wrong. http://www.fas.org/sgp/crs/row/RS22032.pdf

The US is the highest donor in the world, yes, but they are among the lowest as donors on a % of GDP. There is nobody that donates above 1% of GDP - the UN "mandate" was to reach 0.7%. Very few countries have exceeded that, and the United States is near dead-last in terms of the OECD. Nice try, though.

EDIT 2 since you edited in more uncited figures:

How about the best place to get a job? Unemployment rates: Japan #1 4.1%, US 4.8, UK 5.4, Canada 5.9, Germany 7.1, France 8.7

Please have a look at http://www.oecd.org/document/38/0,3343,en_2649_33927_36936230_1_1_1_1,00.html

It's ultimately difficult to have comparative statistics on unemployment because there is a vast multitude of definitions on what "employment" and "unemployment" means. You can read the wikipedia article for this information. However, given that you normalize the figures across the countries, you will find very little discrepancy between most industrial economies. Not to mention ongoing economic cycles as well which ultimately affect these figures year to year.

 

[Economist]

For the general population of the country (not everybody) the http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita" , an indicator of, say, how much food one can buy with their income, has US #2 to #6

PPP per capita is always the best economic index to use when comparing countries standards of living. People generally use exchange rates which gives one a very distorted picture. For example, when you hear someone saying that "The average person in a country Y only makes $2 a day" they are usually referring to exchange rates (in other words, how many US dollars could they buy with their daily earnings). However, this is a bad measure because it fails to take into account the fact that food (and other goods) are cheaper in those countries. Just to be clear, often times they are still really poor, but just not as poor as exchange rates would indicate.

To quote the macroeconomics textbook we used in my intermediate macro class: "The difference between PPP numbers and the numbers based on current current exchange rates can be very large. Return to our comparison between India and the United States. We saw that, at current exchange rates, the ratio of GDP per capita in the US to GDP per capita in India was 75. Using PPP numbers, the ratio is only 13. Although this is still a large difference, it is much smaller than the ratioo we obtained using current exchange rates. Or take comparisons among rich countries. Based on the numbers we saw from Chapter 1 - numbers constructed using current exchange rates - GDP per capita in the US in 2003 was equal to 102% of the GDP per capita in Japan. But, based on the PPP numbers in Table 10-1, GDP per capita in the US is, in fact, 137% of GDP per capita in Japan. More generally, PPP numbers suggest that the US still has the highest GDP per capita among the world's major countries."

Apologies for letting a fact get in the way of your opinion.

LOL. That's funny. I'm definitely going to use this sometime. Don't worry though, I won't use it on this forum as that would be bad taste.

 

[mheslep]

"Yet due largely to political pressure from the international community, the elections went ahead in January 2005, under a misguided "closed party list" system. Rather than choosing a specific candidate, voters across the country chose from among rival lists of candidates backed and organized by political parties."
- http://www.iht.com/articles/2007/11/02/opinion/edallawi.php

Well I'm an interested in what Allawi has to say, but hardly find him persuasive as he was elected to nothing by the nation and was effectively removed from office by the onset of elections.

Yes, because a successful democracy (a "fact" in your book) is a place of sectarian violence and non-stop religious rife.

The evidence of democracy in this case is merely what I stated earlier, that a vast number of people voted despite the the threat of violence. I don't lay responsibility the horrendous Al-qaeda enhanced sectarian violence on the 12 million that voted. Please let's stop with the avalanche of strawmen arguments ('in your book...', 'so you must think ...'). I'm interested in some of what you say and a discussion free from fallacy will be more productive.

 

[mheslep]

I said humanitarian rankings.

'Humanitarian rankings' meaning exactly what then? Do you have in mind something superior to the standard of living indicated by PPP qualified GDP?

No one doubts that the US is the richest country in the world (which GDP/PPP measures). I don't know what point your making, because clearly it does not refute the success of the democratic socialist models in Europe.

What success? I see your opinion again. Please suggest a metric success that improves on the one on the table.

You're completely wrong. http://www.fas.org/sgp/crs/row/RS22032.pdf

The US is the highest donor in the world, yes, but they are among the lowest as donors on a % of GDP. There is nobody that donates above 1% of GDP - the UN "mandate" was to reach 0.7%. Very few countries have exceeded that, and the United States is near dead-last in terms of the OECD. Nice try, though.

Yes you caught me here, I was low, its more like 2.2% of GDP now, or http://www.philanthropyuk.org/Resources/USphilanthropy"). Look, we may have some interesting point - counter point here on the effectiveness (or lack there of) of various economic policies, income disparities, but on the subject of charitable contribution it is game over, no country even comes close to the United States.

On the subject of purely govt. sponsored foreign aid, last I looked the evidence that it is effective, as now practiced, was decidedly mixed. I'd be interested, seriously, in evidence demonstrating effectiveness.

Finally, in looking at cited CRS report which has Norway as the #1 percentage ODA giver (no dispute, good for them): I note it mostly excludes military aid and it appears to give short shrift to it when it does, apparently only counting operational $(gas/salaries/etc). Now, many countries sent help for the Tsunami. The US sent the http://www.latimes.com/news/nationworld/politics/wire/sns-ap-tsunami-us,1,4959430.story?coll=sns-ap-politics-headlines" to Indonesia for the Tsunami relief. A Nimitz class like the AL has three hospitals on board that can treat several hundred people; they are nuclear powered and can supply emergency electrical power to shore facilities; they have three cafeterias with the capacity to feed 3,000 people three meals a day, they can produce several thousand gallons of fresh water from sea water each day, and they carry half a dozen helicopters for use in transporting victims and injured to and from their flight deck. How many such aircraft carriers does Norway have?

 

[Economist]

On the subject of purely govt. sponsored foreign aid, last I looked the evidence that it is effective, as now practiced, was decidedly mixed. I'd be interested, seriously, in evidence demonstrating effectiveness.

I'm not trying to get in the middle of your guys conversation, but I had something to add about this (namely foriegn aid). The book by William Easterly (NYU economics professor and a former research economist at the World Bank) seems to indicate that it may not be very effective. I'm not saying that I am against foreign aid, rather I am just trying to point out that it may not be a very good tool for aleaviating poverty (just like minimum wage, tariffs, etc which is part of the reason I don't have much faith in policy to address these problems). Anyway, it's supposed to be a good book, and if you don't feel like reading it but still want to be informed, then go to google video and type in William Eastery and you can hear some of his presentations/speaches on the topic/book.

https://www.amazon.com/dp/1594200378/?tag=pfamazon01-20

 

[opus]

'Humanitarian rankings' meaning exactly what then? Do you have in mind something superior to the standard of living indicated by PPP qualified GDP?

Things like the UN HDI, Transparency International, Freedom House, etc.

It is bull**** that you mention 'standard of living' now, because GDP doesn't measure a standard of living. An economy may have the highest GDP in the world may also have a terrible standard of living. It is not a measure of health, equality, or education. All it measures is economic activity. Granted there are strong connections between economic activty and the aspects described, your argument is trying to jump from one thing to the next. Read Economist's post on GDP as a measure, which I completely agree with.

What success? I see your opinion again. Please suggest a metric success that improves on the one on the table.

http://www.sciam.com/article.cfm?SID=mail&articleID=000AF3D5-6DC9-152E-A9F183414B7F0000&chanID=sa006 and http://www.businessweek.com/globalbiz/content/oct2006/gb20061011_072596.htm and here. Obviously relates to my response above, but your entire claim to "country success" is predicated on GDP/PPP, and economic perfomrance exclusively.

Yes you caught me here, I was low, its more like 2.2% of GDP now, or http://www.philanthropyuk.org/Resources/USphilanthropy"). Look, we may have some interesting point - counter point here on the effectiveness (or lack there of) of various economic policies, income disparities, but on the subject of charitable contribution it is game over, no country even comes close to the United States.

Philantrophy has more in line to do with culture than public policy. Your article says this itself. Also, Canada beats the US by 0.1%! That probably again says something about the effect of culture, since both countries are similar in that respect. After all, philantrophy is "irrational" economic behaviour, and originally had religious roots. That's the whole point of the UN Millennium goals, to attack poverty from an institutional perspective, which says much more than a bunch of generous "individuals" that give, ladened with issues of wealth and class. Not to say that Bill Clinton et al. aren't bad people - just philanthropists are philanthropists. The wealth of a few individuals does not negate the total self-interest of everybody else (that is, the government).

There's also philantrophic self-interest, which itself seems like a contradiction. Intel spends a lot of money on education for third-world countries, which even the chairman admits, http://www.siliconvalley.com/latestheadlines/ci_7331276?nclick_check=1 . After all, Intel will be in the computers of each and every one of them. You can regard the Marshall Plan in pretty much the same light.

This is also not an argument against philanthropy, just scepticism that many believe philanthropy is anunquestionable "good".

Finally, in looking at cited CRS report which has Norway as the #1 percentage ODA giver (no dispute, good for them): I note it mostly excludes military aid and it appears to give short shrift to it when it does, apparently only counting operational $(gas/salaries/etc). Now, many countries sent help for the Tsunami. The US sent the http://www.latimes.com/news/nationworld/politics/wire/sns-ap-tsunami-us,1,4959430.story?coll=sns-ap-politics-headlines" to Indonesia for the Tsunami relief. A Nimitz class like the AL has three hospitals on board that can treat several hundred people; they are nuclear powered and can supply emergency electrical power to shore facilities; they have three cafeterias with the capacity to feed 3,000 people three meals a day, they can produce several thousand gallons of fresh water from sea water each day, and they carry half a dozen helicopters for use in transporting victims and injured to and from their flight deck. How many such aircraft carriers does Norway have?

So your prescription is that everybody should build aircraft carriers to combat poverty? You think that the only role an aircraft carrier plays is to help disasters?

I am not doubting the good intentions here (after all, lives were saved), but I am doubting on how you use an example of "relief" coming from a product of a military-industrial complex.

 

[Pelt]

This would essentially make menstruation a felony since it is very common for eggs to become fertilized but not stick to the uterus. Fertilized egg leaves with the rest of the monthly cleanup, and suddenly a woman is guilty of killing the "living person" who was inside her for a total of 1 day.

Under what Colorado statute would the woman be prosecuted?