Technology and Unemployment

[mtguy8787]

You mean like talking about what would happen in a free market, even though a free market has never existed since the beginning of civilization?

Sounds like you're arguing for people to consider your arguments meaningless.

I addressed this common fallacy in the previous post. It has been repeated so often that it has become cliche. A free market is not a homogenous entity, where it is either free, or not.

Market freedom exists on a continuum, and yes, for the entire history of the U.S. the market has been unplanned, with occasional exceptions such as price controls during the great depression, and subsidies for agriculture and a few other industries. You have simply demonstrated your complete ignorance of actual economic history -- while repeating the cliche line used by the general public.

If you think that market mechanisms only work in a complete Lasseiz faire scenario (which existed for much of our history, btw), you are completely ignorant of basic economics.

 

[sangha]

I addressed this common fallacy in the previous post. It has been repeated so often that it has become cliche. A free market is not a homogenous entity, where it is either free, or not.

Which is why arguments that are based on how things would work in a free market are meaningless.

Take your argument about how the market can accurately determine the value of a person's labor. In the mythical free market, that might be true. But history shows that in the markets that do and have existed, the value of labor is often manipulated by the political system. Therefore, it is meaningless to argue about how the market should be allowed to determine the value of labor when we know that never happens.

Even you agreed that it was meaningless to base arguments on hypothetical situations.

 

[mtguy8787]

Which is why arguments that are based on how things would work in a free market are meaningless.

Good lord you are ignorant. No economic theory starts with a preamble "in a completely free market, so and so".

People with economic understanding generally understand what people are referring to when they talk about the free market. Apparently this does not apply in discussions with you, as you clearly have no idea what economists actually refer to when they use this term.

The "free market" is a general term used to refer to conditions that are, for the most part, free from price control and where free competition is for the most part allowed.

The conditions posited by modern economics do, for the most part, exist.

Modern orthodox economics, starting with classical economics foundations, is both theoretically rigorous, and empirically demonstrated.

Modern theories of competition, prices, labor, etc -- start with how things actually are, theorize, and then are empirically demonstrated or falsified.

Take your argument about how the market can accurately determine the value of a person's labor. In the mythical free market, that might be true. But history shows that in the markets that do and have existed, the value of labor is often manipulated by the political system. Therefore, it is meaningless to argue about how the market should be allowed to determine the value of labor when we know that never happens.

You are completely ignorant as to what modern economics actually is, and how it was developed. You might remedy this by opening up an introductory book on labor economics. Actually it would appear that you would need to start with basic microeconomics.

You first claim that labor is often manipulated. You then make the connection that this means that labor has never been determined by unregulated prices. First off, this is completely non-sequitur. Secondly, instances of price manipulation, i.e. during the Great Depression, does not equate to price manipulation, through all industries, throughout the entire country's history.

In fact, the history of our country has been, for the most part, a laissez faire economy.

Even you agreed that it was meaningless to base arguments on hypothetical situations.

There is nothing hypothetical about modern economics. You have simply proven your sheer ignorance of the economic history of this country, and of what modern economics actually is (and is not).

You believe that so-called "free market theories" are simply theories about how things would work in the absence of all government. They are not.

As I said before, the history of modern economics has been built based on observing real world conditions, building theoretical foundations, and having these empirically validated.

Economists that advocate the free market, do so because the body of economic knowledge, starting with its classical foundations, has discovered that in general, markets are most efficient when unhampered.

Since you appear to be pretty dense, I'll repeat myself again. "Free market theory" is not something that was developed by economists who dreamt up a hypothetical scenario, and then theorized about how things would work.

It is an edifice that is built on numerous foundations, i.e. competition, supply and demand, price theory, labor theory, choice theory, monetary theory, monopoly theory, etc. It is built on an edifice of numerous concepts that have been rigorously developed and validated over time.

Thus, to be more accurate, economists do not say that "free market theory says" -- because there is no such thing as free market theory. Belief in the free market does not rest on free market theory -- there is no such thing -- only people like you believe there is.

An economist will say something like -- We know that given a number of firms, and so and so conditions, we know from so and so & this and that what will happen when X happens.

A free market economist is one who expounds the evidence accumulated through the history of modern economics, starting with classical economics, that markets are generally most efficient when unhampered.

 

[sangha]

Good lord you are ignorant. No economic theory starts with a preamble "in a completely free market, so and so".

Oh, I am definitely ignorant on a great many subjects, but at least I know that no amount of personal invective will disguise a posters inability to counter anothers arguments.

People with economic understanding generally understand what people are referring to when they talk about the free market. Apparently this does not apply in discussions with you, as you clearly have no idea what economists actually refer to when they use this term.

Nonsense. The term is used by many people who mean different things by it. I've even heard people apply it to the US, where a large portion of the economy is either controlled or outright owned by the govt. At the same time, I've heard others call it socialism, or something close to it.

And I also know that making unsupported claims will not work merely because you've chosen to pile on some more personal insults.

The "free market" is a general term used to refer to conditions that are, for the most part, free from price control and where free competition is for the most part allowed.

Yes, "general term", "for the most part" etc. That's some "definition" you've got there.

The conditions posited by modern economics do, for the most part, exist.

I said nothing about conditions that exist, or modern economics. I referred to nonsense that you are pushing, that is neither existing nor modern

You are completely ignorant as to what modern economics actually is, and how it was developed. You might remedy this by opening up an introductory book on labor economics. Actually it would appear that you would need to start with basic microeconomics.

You reliance on personal insults weaken your argument.

You first claim that labor is often manipulated. You then make the connection that this means that labor has never been determined by unregulated prices. First off, this is completely non-sequitur. Secondly, instances of price manipulation, i.e. during the Great Depression, does not equate to price manipulation, through all industries, throughout the entire country's history.

Of course it's non-sequitor because I never said that. I said nothing about labor never being determined by "unregulated prices", nor did I say anything about price manipulation

In fact, the history of our country has been, for the most part, a laissez faire economy.

Nonsense. From the very beginning, this land has been a joint venture between a govt (ex France, England, Spain, etc) and corporations (which are themselves inventions of, and regulated by, the govt)

There is nothing hypothetical about modern economics. You have simply proven your sheer ignorance of the economic history of this country, and of what modern economics actually is (and is not).

You believe that so-called "free market theories" are simply theories about how things would work in the absence of all government. They are not.

But they are. The fact that you claim otherwise does not make them something else, simply because you precede and follow them with insults about how ignorant I am.

The "modern" economic principles and theories which you claim as "free market" theories are nothing of the kind. There are economic principles which have shown their value, but those are not known as "free market theories"; they are "economic theories" (or economic principles)

As I said before, the history of modern economics has been built based on observing real world conditions, building theoretical foundations, and having these empirically validated.

Economists that advocate the free market, do so because the body of economic knowledge, starting with its classical foundations, has discovered that in general, markets are most efficient when unhampered.

WHile there are principles which have been empirically validated, those are not "free market principles", nor do they show that markets with less govt interference are more efficient. Many govt regulations, such as those that require disclosure, increase the efficiency of markets.

Saying "markets are more efficient when unhampered" is meaningless because it's a truism. It's like saying people are more comfortable when they have less discomfort. It's just one of many empty slogans the free market fetishists like to chant in order to make it sound like they have some sort of understanding of economics.

Since you appear to be pretty dense, I'll repeat myself again. "Free market theory" is not something that was developed by economists who dreamt up a hypothetical scenario, and then theorized about how things would work.

Wrong again. I'll remind you that preceding your nonsense with an insult does not make your nonsense make sense.

It is an edifice that is built on numerous foundations, i.e. competition, supply and demand, price theory, labor theory, choice theory, monetary theory, monopoly theory, etc. It is built on an edifice of numerous concepts that have been rigorously developed and validated over time.

And none of those are "free market theories"

Thus, to be more accurate, economists do not say that "free market theory says" -- because there is no such thing as free market theory. Belief in the free market does not rest on free market theory -- there is no such thing -- only people like you believe there is.

Finally you said something that is true. There is no such thing as free market theory.

An economist will say something like -- We know that given a number of firms, and so and so conditions, we know from so and so & this and that what will happen when X happens.

A free market economist is one who expounds the evidence accumulated through the history of modern economics, starting with classical economics, that markets are generally most efficient when unhampered.

Again, with your meaningless nonsense.

 

[mtguy8787]

Oh, I am definitely ignorant on a great many subjects, but at least I know that no amount of personal invective will disguise a posters inability to counter anothers arguments.

Nonsense. The term is used by many people who mean different things by it. I've even heard people apply it to the US, where a large portion of the economy is either controlled or outright owned by the govt. At the same time, I've heard others call it socialism, or something close to it.

And I also know that making unsupported claims will not work merely because you've chosen to pile on some more personal insults.



Yes, "general term", "for the most part" etc. That's some "definition" you've got there.

- Provide a list of companies nationalized by the US govt. They represent a tiny fraction of the economy. The burden is on you to prove your claim.

- What the general public refers to as a free market and what economists refer to it as are two different things.

I said nothing about conditions that exist, or modern economics. I referred to nonsense that you are pushing, that is neither existing nor modern

What I talked about was economics 101, in regards to competition, supply and demand, price theory, and labor economics.

If you believe you know what I am talking about, point out where I am talking about concepts that are not based in modern economics

That's right, you can't.

Once again, you reveal your ignorance. It may be an insult, but it's true.

You reliance on personal insults weaken your argument.

Using an insult as an argument does not make a valid argument. Adding an insult to an argument does not change the content of that argument, nor increase or decrease its validity.

If you think so, then not only are you ignorant, but lacking in basic intelligence as well.

Of course it's non-sequitor because I never said that. I said nothing about labor never being determined by "unregulated prices", nor did I say anything about price manipulation

The price of labor is included with the concept of price theory. If you knew a thing about economics, you would know this. The fact that you do not, once again shows your ignorance.

You talking about manipulation of the value of labor. The value of labor its its price. Thus, manipulating the value of labor is manipulating prices.

You first said that there has been manipulation of labor prices. You then said that determination of labor price by the market never happens.

Nonsense. From the very beginning, this land has been a joint venture between a govt (ex France, England, Spain, etc) and corporations (which are themselves inventions of, and regulated by, the govt)

Purchasing land from another government is a one-time event. It does not equate to continued and widespread government control of the economy. Corporations are business entities. The fact that they have some regulation does not mean that, as you suggest, that prices and competition are managed by the government.

Most corporations are not joint ventures with the government. The burden is on you to prove that this is the case, because a quick look at say, top 500 or 1000 corporations shows that few, if any, are joint ventures with the government. There are a few exceptions where corporations are granted special privileges by government, but this is not currently, not historically, generally the case.

But they are. The fact that you claim otherwise does not make them something else, simply because you precede and follow them with insults about how ignorant I am.

Notice I used the term "so-called".

The "modern" economic principles and theories which you claim as "free market" theories are nothing of the kind. There are economic principles which have shown their value, but those are not known as "free market theories"; they are "economic theories" (or economic principles)

I did not claim they were free market theories. Using the term "free market" is not the same as referring to "free market theories". The first is a statement where market fundamentals are generally manipulated.

WHile there are principles which have been empirically validated, those are not "free market principles", nor do they show that markets with less govt interference are more efficient. Many govt regulations, such as those that require disclosure, increase the efficiency of markets.

Saying "markets are more efficient when unhampered" is meaningless because it's a truism. It's like saying people are more comfortable when they have less discomfort. It's just one of many empty slogans the free market fetishists like to chant in order to make it sound like they have some sort of understanding of economics.

Actually, in regards to information economics, its a mixed picture & unclear with regards to disclosure requirements

http://web.mit.edu/wysockip/www/papers/LW2008.pdf
http://faculty.chicagobooth.edu/chr...omic_consequences_of_increased_disclosure.pdf

It's not a truism, because it is not apparent to most people who are not economists, nor has it always been apparant. It's a conclusion that has been reached over time by most economists, and something that has become more apparent over time.

Some government regulation is beneficial. Interfering with market fundamentals is not one of those. This is a lesson that has not yet been learned by the general public, many journalists, and most politicians. If this statement were a truism, it would be apparent to most everyone. If it were a truism, it would be apparent without the building of an edifice of economic knowledge that eventually comes to that conclusion from multiple angles. It is not, hence your claim that it is a truism is false.

I'll just quote economist Bryan Caplan, who knows much more about economics than me, and most definitely you.

"In short, in neoclassical jargon, a powerful case now exists that free-market structures are "second-best" efficient: there is no feasible real-world way to improve upon them."

Wrong again. I'll remind you that preceding your nonsense with an insult does not make your nonsense make sense.

Saying "wrong" is not a refutation. You really suck at debating.

For someone with reading comprehension, the use of quotation marks around the term should stand out.

In referring to "free market theory", I am not referring to any formal economic theory, but rather the stances & their justifications of economists who advocate a free market.

Such stances were not developed, as I said, by economists who dreamt up a hypothetical scenario, and then theorized about how things would work.

You are the one who is wrong, because you clearly failed to comprehend what was being said.

And none of those are "free market theories"

No, they are elements that are used to support the position of economists who believe in less regulation as a general principle, with specific exceptions.

Finally you said something that is true. There is no such thing as free market theory.

Again, you fail to comprehend the difference between people who use the term "free market", and the belief that people who advocate the free market, are somehow relying on a "free market theory".

Let's rehash how this confusion on your part began. When economists say things like "in a free market", they are referring to a general lack of interference of market fundamentals. The things that I described are economics 101 -- most of the things I talked about are things that you will learn in Microecon I & II, and a few good expository books on basic economic principles.

If you have a shred of intellectual honesty, you will attempt to actually show which economic ideas I talked about are not based in modern economic thought.

You then said that these arguments are meaningless, because there has never been a completely free market. This is red herring, and a common one at that.

I said that it is not necessary for an economy to be completely devoid of regulation, in order for market forces to work.

You then said that it has never been true that the market determines labor value. You supported this claim by prefacing it with a statement that labor value has often been manipulated. The burden is on you to prove your claim that markets have never determined labor value, by showing that in general, in the history of our country, government has enforced sweeping price controls.

Again, with your meaningless nonsense.

Are you really this stupid? I am explaining to you what is meant when people refer to a "free market" or a "free market economist" such as Milton Friedman.

This is necessary because you believe that:

- markets have never determined the value of labor
- that from the beginning, this country has been a joint venture between government and corporations
- that the basic economics that I talked about in my previous post are not based in modern economics
- that a free market is a hypothetical thing, because there has never been a free market. As I have tried to explain, talking about the free market refers to unrestricted exchanges between individuals. When Intel competes with AMD, and sells a CPU to a manufacturer, who then sells you a computer, this is a free market, insofar as the exchanges are unrestricted, and generally speaking, they are.

To claim that there has never been a free market, is to claim that there has never been a business arena where free exchange takes place.

A free market is a matter of degree -- something that you clearly fail to comprehend.

The burden is on you to prove your absurd claims, and the burden is on you to prove that the basic concepts that I talked about in previous posts are not based in modern economic thought.

 

[imagep]

...If you think so, then not only are you ignorant, but lacking in basic intelligence as well...

If you knew a thing about economics, you would know this. The fact that you do not, once again shows your ignorance...


I did not claim they were free market theories. Using the term "free market" is not the same as referring to "free market theories". The first is a statement where market fundamentals are generally manipulated.
...You really suck at debating...

For someone with reading comprehension...
...Are you really this stupid?...

... your absurd claims

Geesh man, could you be any more insulting?

I'm amazed that you haven't been banned from this site yet. I suspect it won't be long.

I'm interested in your views, and if you have something that you can teach then great. But everyone could do without your personal insults.

 

[mtguy8787]

Geesh man, could you be any more insulting?

I'm amazed that you haven't been banned from this site yet. I suspect it won't be long.

I'm interested in your views, and if you have something that you can teach then great. But everyone could do without your personal insults.

fair enough

 

[Ahlevah]

So which already developed countries have an economy growing faster than that of the US?

Hong Kong, Singapore, Canada (effective tax rate of 10% domestic, 21% for MNCs), Sweden (effective tax rate 10%, 18% for MNCs), Finland (24.5%), and Australia (22%) to name a few.

And how many have higher standards of living, or more millionares per capita?

Don't know about the millionaires, but Singapore, Sweden, Canada, Australia, and Finland have higher GDPs per capita.

And how many of those countries have lower tax rates?

All the ones I listed have lower corporate tax rates. Interestingly, France has lower corporate taxes than the U.S. The problem with France is it has a strong labor movement and rigid rules governing plant closures and layoffs, so companies are reluctant to hire.

Best Countries for Business List - Forbes

Hey, Mister Tax Man! - In Photos: Global Corporate Tax Rates From Lowest To Highest - Forbes

 

[sangha]

- Provide a list of companies nationalized by the US govt. They represent a tiny fraction of the economy. The burden is on you to prove your claim.

- What the general public refers to as a free market and what economists refer to it as are two different things.

The govt owning a company is not the only form of socialism. Even people as economically ignorant as myself know that, so an economic expert like yourself should know that.

What I talked about was economics 101, in regards to competition, supply and demand, price theory, and labor economics.

If you believe you know what I am talking about, point out where I am talking about concepts that are not based in modern economics

That's right, you can't.

Once again, you reveal your ignorance. It may be an insult, but it's true.

Half right. It is an insult, but it's not true.

And I have already pointed out more than one thing you've said that is not supported by modern economics, nor empirically proven to be valid. One example is your claim that the market will accurately calculate the value of labor. History has provided us with many examples where the market has miscalculated the value of labor.

And your claim about markets being more efficient when unhampered is also not "modern economics". Not because it's untrue, but because it's a truism of no significance.

Using an insult as an argument does not make a valid argument. Adding an insult to an argument does not change the content of that argument, nor increase or decrease its validity.


If you think so, then not only are you ignorant, but lacking in basic intelligence as well.

Insults have no effect on the validity of an argument. It does reflect poorly on the person making the argument, particularly when all they can do is make claims and the only support they post is those insults. Only a fool would injure their own credibility so, and in such a regular fashion.

The price of labor is included with the concept of price theory. If you knew a thing about economics, you would know this. The fact that you do not, once again shows your ignorance.

You talking about manipulation of the value of labor. The value of labor its its price. Thus, manipulating the value of labor is manipulating prices.

"Included in" does not equal "the same as"

You are playing words games in a pitiful attempt to sound educated.

You first said that there has been manipulation of labor prices. You then said that determination of labor price by the market never happens.

I never said the latter. The fact that your arguments depend on some many untruths highlights the weakness of your position, and your reliance on insults.

Purchasing land from another government is a one-time event. It does not equate to continued and widespread government control of the economy. Corporations are business entities. The fact that they have some regulation does not mean that, as you suggest, that prices and competition are managed by the government.

Most corporations are not joint ventures with the government. The burden is on you to prove that this is the case, because a quick look at say, top 500 or 1000 corporations shows that few, if any, are joint ventures with the government. There are a few exceptions where corporations are granted special privileges by government, but this is not currently, not historically, generally the case.

It's a wonder you fit so many misunderstandings and misconceptions in a mere two paragraphs.

The record shows that the very first trips to this country were corporate endeavours, funded with government subsidies. So too were the first colonies.

And your reference to "corporations and prices are managed by the government" is but another example of you relying on something I never said

Notice I used the term "so-called".

I don't see how that weasel wording supports your argument.

I did not claim they were free market theories. Using the term "free market" is not the same as referring to "free market theories". The first is a statement where market fundamentals are generally manipulated.

All markets are generally manipulated. Without some form of manipulation and govt involvement, markets could not survive.

Some government regulation is beneficial. Interfering with market fundamentals is not one of those.

Ahh, at least we're making some progress! So some government regulation is good. Some is bad. Very good, grasshopper!

Now, could you go beyond "this good, that bad!" and explain the difference between "good" and "bad" without relying on some meaningless drivel such as "market fundamentals" are "hampering"? Please use small words, so the ignorant ones such as myself can follow you.

Actually, in regards to information economics, its a mixed picture & unclear with regards to disclosure requirements

http://web.mit.edu/wysockip/www/papers/LW2008.pdf
http://faculty.chicagobooth.edu/chr...omic_consequences_of_increased_disclosure.pdf

It's not a truism, because it is not apparent to most people who are not economists, nor has it always been apparant. It's a conclusion that has been reached over time by most economists, and something that has become more apparent over time.

I'll just quote economist Bryan Caplan, who knows much more about economics than me, and especially you.

"In short, in neoclassical jargon, a powerful case now exists that free-market structures are "second-best" efficient: there is no feasible real-world way to improve upon them."

A truism is a truism regardless of how many people it is apparent to.

And your quote says nothing about "markets are more efficient when they are unhampered".

Saying "wrong" is not a refutation. You really suck at debating.

Saying "wrong" is all you've done.

For someone with reading comprehension, the use of quotation marks around the term should stand out.

In referring to "free market theory", I am not referring to any formal economic theory, but rather the stances & their justifications of economists who advocate a free market.

Such stances were not developed, as I said, by economists who dreamt up a hypothetical scenario, and then theorized about how things would work.

You are the one who is wrong, because you clearly failed to comprehend what was being said.



No, they are elements that are used to support the position of economists who believe in less regulation as a general principle, with specific exceptions.

OK, now we're getting somewhere. Finally you're admitting that your nonsense does have a point; specifically your search for a rationale for being hostile to regulation, taxation, and other forms of govt interference in the economy.

Again, you fail to comprehend the difference between people who use the term "free market", and the belief that people who advocate the free market, are somehow relying on a "free market theory".

Let's rehash how this confusion on your part began. When economists say things like "in a free market", they are referring to a general lack of interference of market fundamentals. The things that I described are economics 101 -- most of the things I talked about are things that you will learn in Microecon I & II, and a few good expository books on basic economic principles.

If you have a shred of intellectual honesty, you will attempt to actually show which economic ideas I talked about are not based in modern economic thought.

You then said that these arguments are meaningless, because there has never been a completely free market. This is red herring, and a common one at that.

And there you go with the hypotheticals again, which according to you are meaningless (with the exception of when you use them). You speak of "referring to a general lack of interference of market fundamentals" when such a situation does not exist. It is a hypothetical.

I said that it is not necessary for an economy to be completely devoid of regulation, in order for market forces to work.

If that was all you said, there would be no debate between you and I.

But you have spoken about economies where there is a lack of interference in market fundamentals. That is a hypothetical situation, and therefore meaningless, according to your own argument.

You then said that it has never been true that the market determines labor value. You supported this claim by prefacing it with a statement that labor value has often been manipulated. The burden is on you to prove your claim that markets have never determined labor value, by showing that in general, in the history of our country, government has enforced sweeping price controls.

I would have that burden, if I had said that.

Once again, your reliance on things that were never said highlights the weakness of your position.

Are you really this stupid? I am explaining to you what is meant when people refer to a "free market" or a "free market economist" such as Milton Friedman.

This is necessary because you believe that:

- markets have never determined the value of labor

never said that

- that from the beginning, this country has been a joint venture between government and corporations

Did say that, and showed that it was true. Your response .... "was not!"

Very weak

- that the basic economics that I talked about in my previous post are not based in modern economics

Never said that.

- that a free market is a hypothetical thing, because there has never been a free market. As I have tried to explain, talking about the free market refers to unrestricted exchanges between individuals. When Intel competes with AMD, and sells a CPU to a manufacturer, who then sells you a computer, this is a free market, insofar as the exchanges are unrestricted, and generally speaking, they are.

Given the govt interference in computer technology, that was an extremely poor example to give for a market with little interference with market fundamentals.

To claim that there has never been a free market, is to claim that there has never been a business arena where free exchange takes place.

The fact that two entities agree to make a "voluntary" transaction does not make a "free market". Not when it happens in a market in which the govt has intefered profoundly with the markets fundamentals

A free market is a matter of degree -- something that you clearly fail to comprehend.

And the US economy is far from free by any measure -- something you have clearly failed to comprehend.

But since you seem so dogged about this whole "free market" nonsense, perhaps you can actually explain how the "free-ness" of a market is calculated without resorting to meaningless drivel like "market fundamentals". So far, your claims on that matter have been farcical.

 

[imagep]

Hong Kong, Singapore, Canada (effective tax rate of 10% domestic, 21% for MNCs), Sweden (effective tax rate 10%, 18% for MNCs), Finland (24.5%), and Australia (22%) to name a few.

Don't know about the millionaires, but Singapore, Sweden, Canada, Australia, and Finland have higher GDPs per capita.



All the ones I listed have lower corporate tax rates. Interestingly, France has lower corporate taxes than the U.S. The problem with France is it has a strong labor movement and rigid rules governing plant closures and layoffs, so companies are reluctant to hire.

Best Countries for Business List - Forbes

Hey, Mister Tax Man! - In Photos: Global Corporate Tax Rates From Lowest To Highest - Forbes

Hong Kong and Singapore are both city-states that are essentially just international trading posts. Comparing them to the US isn't a very good comparison, a better comparison would be to compare them to NYC.

I admit that we probably have a lot to learn from some of those other countries though. Australia has a minimum wage that is about double ours, and Finland has an effective minimum wage of about 30% more than ours. Finland, Sweden and Canada all have have a more social(istic) programs than we do and socialized healthcare.

Do you know what the effective corporate tax rate is in the US? The GAO says that it's 12.6%. Isn't that competitive or even lower than those countries that you listed?

From http://money.cnn.com/2013/07/01/news/economy/corporate-tax-rate/index.html ...

Large, profitable U.S. corporations paid an average effective federal tax rate of 12.6% in 2010, the Government Accountability Office said Monday.

U.S. corporate tax collection totaled 2.6% of GDP in 2011, according to the Organization for Economic Cooperation and Development. That was the eleventh lowest in a ranking of 27 wealthy nations.

I believe that you just proved my point. thanks.

 

[Ahlevah]

Hong Kong and Singapore are both city-states that are essentially just international trading posts. Comparing them to the US isn't a very good comparison, a better comparison would be to compare them to NYC.

Both of these "international trading posts" were economic and social cesspools just a couple generations ago. Unlike New York, which has a means to secure access to natural resources, the only resources these places had were people. But today they do a good job attracting corporate tenants while New York seems more interested in resting on its laurels and punishing companies so they'll relocate somewhere else, like suburban New Jersey.

Do you know what the effective corporate tax rate is in the US? The GAO says that it's 12.6%. Isn't that competitive or even lower than those countries that you listed?

According to Forbes, MNCs pay 28%, so who knows what the truth is. I think the biggest problem with the U.S. corporate income tax is it's extremely complicated and discriminatory, so, depending on what business you're in, it can been high or low. We would be better off if we evened the playing field for everyone by meaningfully lowering the rate from 35% and removing the complexity. We should stop the economic engineering and go to a flat tax.

 

[MusicAdventurer]

The definition of exploitation is unfair practices.

Exactly

You have to define criteria for what is unfair, and what is not.

well, what are your definitions? Remember, we are taking people's lives into consideration here

In your example, the person is coerced against their will. In a voluntary market exchange, neither is coerced.

What was not voluntary about it? Don't we all have free will?

I would argue that all voluntary exchanges (assuming that they dont harm others), are ethical, because person A is not justifiably morally obligated to provide person B with anything. When they do come to an agreement, they do so because they both believe they are better off.

Was the coerced prisoner not free to keep his/her mouth closed? The point I am getting at here is that we all have free will, but under dire situations, we will do what we have to to stay alive or reduce suffering. If a person would die or suffer - even if it means that we "voluntarily" become exploited

It might be undesirable that some people earn a low wage, but unethical? By saying it is unethical, you are placing the moral burden on the employer to provide the employee with a certain outcome. In the case of any wages paid, and accepted, the employer is offering a deal that is better than the next best alternative. Unless you say that the employer is morally obligated to serve the employee, there is nothing unethical happening, because both parties are morally justified in offering what they will, and only what they will, in exchange for what another has to offer. As it stands, few people actually earn minimum wage, and most who do are young, or uneducated. If the minimum wage was really all that stood in the way of exploitation, we would expect to see most, or all low skilled workers earning a minimum wage.

First, you need to define low wage... certain living low wages are certainly not unethical. I agree with everything you are saying so long as a minimum wage, that is a low living wage, is in place to prevent exploitation.

I didnt say ethics werent important in general.

Thank you for making that distinction.

I said that they arent required for market forces to work. Economists do not assume that people will behave ethically when they analyze a situation. Market forces operate regardless of the ethics of individual actors within the market. An unethical businessman cannot change the force of competition, the price system, or supply and demand.

No, one unethical businessman acting alone cannot make a huge dent in the big picture.... however, when there are several getting in on the action, things can get messy.. even if they are only micro-offenses.. the accumulation of them over time could be problematic

Market forces don't require a market to be completely free, or any arbitrary degree of free, in order to function. Competition between Intel and AMD, for instance, does not require all industries to be free. It only requires relatively free conditions in the areas that significantly affect their market. While the government may distort agricultural prices, for instance, with subsidies, this does not have any appreciable effect the price system of other industries. As it stands, different industries have varying degrees of freedom -- which is why you see more issues in some than others. Competition in the health insurance industry, for example, is highly curtailed (state to state competition is banned, for instance), which contributes to the problems we see here.

Somehow, I get the feeling you think I am concerned with whether or not a market will still function (whether it produces good things for the economy, or bad) under certain circumstances... I believe the market will likely always function, i.e. do something... I of course am interested in how it's function could hurt the economy. However, my main concern for the purposes of this post is disallowing companies to exploit employees...

Motives are irrelevant because achieving an outcome in the market rests on only one thing: satisfying the conditions demanded. A cutthroat businessman and an altruistic one may be competing in the same area -- yet their motives do not determine the market outcome. The one who best meets consumer demand will be the most successful, greed & unethical motives aside.

Of course... I agree. However, I believe that many times it is greed that can cause problems for employees, as employers want to pay the least amount of money, apparently now really caring about the extent to which that pay would or would not help his/her employees. This is why we have the minimum wage.

The problem is when arguments and positions are based purely on emotion, and not also on sound principles. Given that economics underlies almost everything we value, it is essential that these political stances be based on sound economic principle and thinking -- more often than not, they are not.

I completely agree that arguments should not be based purely on emotion. I also agree that arguments should be based on sound principles. We can still have an argument that includes the effects human psychology. I also believe human ethics need to be taken into consideration as well. Remember, since you are an something of a economist and something of a psychologist, it is important that we work together here. I believe you know what my position is. So what is the happy medium? Where can the psychological and ethical concerns I have mentioned and the economic concerns that you have mentioned meet in the middle to find a compromise?

Sure greed plays a role in predicting behavior, i.e. game theory. In fact, economists generally assume that all businessmen are greedy. The question is whether someone's greed can work against market forces. Someone can do whatever they want -- you might even predict it -- but it won't allow them to ignore the market.

I'd like a little insight into what the "market" means to you in all of this? A simple sentence or two would suffice... remember, I am not an economist, so please answer in a way you think I would understand... thanks

The most common example I come across for supposed market failure due to greed is that concerning anti-trust. For the most part, historically, anti-trust actions have been ridiculous or outright damaging. This article here provides a good overview

In regards to collusion, which is one of the biggest areas where businesses can supposedly sustain their behavior in the face of competition, I would recommend giving this a read. Bryan Caplan is a first rate economist and thinker, IMO

Its also important to distinguish between overall & long term processes vs. short-term & acute incidents. Market forces don't automatically or magically prevent someone from attempting to "cheat the system". What it does do is to serve as an equalizing force that tends to negate the sustainability of any such efforts, or even make it such efforts counterproductive in many cases.

If we assume that businessmen are generally greedy and willing to engage in unethical practices to maximize profit, and it is believed that they can sustain such attempts against market forces, then we should expect to see this happening in general. Furthermore, we should expect to see this market failure, in general, throughout history. As it stands, we do not.

I'm not saying such incidents don't exist. I'm saying that they are often not very effective at actually working against market forces, and that they are generally unsustainable.

It's important to distinguish between questioning whether such incidents happen, and whether or not they are actually able to establish a negative trend that works to undermine market processes in the long term. This is important because if we give the government a mandate to go after such incidents, all roads suggests that more harm than good will result. The history of anti-trust regulation is one example.

Suppose we give government a mandate to go after all "unethical" behavior in business. We would see bureaucrats, driven by political bias and agenda, and subjective judgement and criteria, engage in sweeping regulatory behavior -- in which most cases, the supposed unethical behavior would likely be economically justified to begin with. CEO pay is an example of something that is widely considered to be unethical, yet the body of studies conducted show no evidence of rent-seeking in general.

So let me make sure I understand what you are saying... you are saying that yes of course there has been cases where greed has led to problems in the market. Are you saying that those problems negatively effected the economy? Also you are saying that the government has a hard time finding unethical behavior. I wonder why that is? Perhaps it could be because we have no precedent... i.e. what new generations are seeing as unethical were not seen as unethical before, so there is no legal precedence?

Ironically, top celebrities, athletes, and news anchors make as much or more than top CEOs, and we hardly ever, if at all, see people claiming that their earnings are unethical.

If I remember correctly, I have never mentioned the unethical hoarding of artificial wealth in this post... I'd like to stick with minimum wage for now

Such claims that CEO pay is unethical, tends to stem from complete ignorance about how and why a CEO gets paid in the first place, or claims that "they don't do they much to earn their pay, anyways", which stems from ignorance about what it actually takes to be a successful top CEO.

Sure... greed can motivate people to raise prices

But of course. The primary purpose of business is to maximize revenue. The question is whether individual businesses can successfully raise prices in disregard to market prices, or whether greedy businessmen can systematically raise prices at will. The answer is that they cannot -- if they could, we would expect to see it happen in general. Consumers determine prices -- not the greed of businessmen.

You said that with the proper societal system, the nonsense of greedy businessmen raising prices would stop. The only system that can change market prices is artificial price control. The system that exists, is the free market, which does not allow greedy businessmen to raise prices as they will.

In an ideal world I suppose, were no corruption exists, no collusion etc.

I had originally said that if you increase minimum wage to the point where they are being paid more than they produce, prices would increase. You implied that this process was part of "all this nonsense". What I was saying is that this increase in prices does not reflect greedy businessmen -- it reflects the underlying economic reality. As it stands, prices tend to be sticky, and businessmen do not tend to immediately hike up prices every penny they can, at every change they get.

Lol... no one's trying to make a profit out there? Somehow that's what I thought this was all about. You see... the fewer profits the businessmen have... the worse off they feel... they never have enough money you see... so even if there were enough money for them to keep their prices low in order to keep minimum wage from jumping up again... if their profit margin went down do to a minimum wage increase, my bet is they increase the prices. You see, the greedy part is that there is plenty of profit to go around, but they raise prices that will effect their employees anyway. Of course, there are varying degrees of profits. So those with the most profits who increase anyway are being the greediest.

No, youre not getting it. People do not get paid market value for their labor because of the good deeds and ethics of a few businessmen, which force others to comply. That they get paid what they do, because the demand for what they have to offer exists, and competition for that commodity exists. Assume that no businessmen are ethical. People would still get paid what they do....

See my quote from above... the businessmen can choose how much money they want to pack into their wallets... that's their choice. How much they choose to hoard will have an effect on how much they can give their employees. So an ethical businessman who pays a healthy living wage would have to take a cut in his pay check to do it. You see what I am saying?

It works, regardless of the existence of ethical businessmen.

Nope, the few who did this would not force everyone else to comply. A few businesses who did this would attract the most qualified individuals. The remaining supply of that labor, and the remaining demand for it, would not be affected by those outliers.

Really? What happens if the most qualified individual start providing great services and increase business; then they need to hire more people and they do, paying the same higher rate. Then all of a sudden, most employees want to work for that business, so potential employees are attracted, in addition, they begin getting more business for their higher standards. What would happen then? What if several ethical businessmen took this approach. Wouldn't others who didn't follow suite soon loose their business to their more ethical/smart competition? (I am using the terms ethical and smart interchangeably, because it would appear that in this situation, they are both)

What does happen is that savvy businessmen offer exceptional benefits in order to attract and retain the most qualified workers. Henry Ford paying double the average wage is a perfect example of this. Another example in modern times is Google, which is renowned for their high standard of working conditions.

The interests of businessmen are not mutually exclusive from the interests of other actors in the market. In economics, it is generally agreed that market forces tend to push things towards equilibrium, and that this point is the most efficient overall configuration.

No, as I've said, market forces work regardless of whether or not businessmen are ethical.

Somehow you are concerned with whether or not the market works - I understand that the market works... you don't need to convince me... again, my main concerns are as stated above and listed here: minimum/living wages

 

[MusicAdventurer]

Of course there is human influence -- the desire to maximize personal gains drives all market interactions.

Exactly, these are your words... not mine ... not that I don't agree

The problem with using what you just mentioned is that it lacks an objective means for analyzing what is, and what is not exploitation.

Are sweatshop workers being exploited? Using an arbitrary standard of living as your criteria, people can, and do commonly argue that they are. Yet what they earn is generally significantly better than the alternative.

The alternative being death or suffering, sickness, etc. to me that is pretty analogous to being tortured and then giving a confession to end it

Is person A being exploited by person B, when person B offers a deal that is better than no deal? To claim that it is, is, as I said before, putting a moral obligation on person B to ensure a certain outcome for person A.

In the long term, if exploitation were the rule, we would not expect to see the standard of living increase for the so-called exploited. Yet, historically, up to this modern day, it has.

Yes, as a society we need to enforce the moral obligation on employers to provide a minimum wage. As for "increased standard of living"... yes, being able to eat a humble meal beats starving and living on the streets... but not by much... and most people would consider that exploitation. You see here in the US, we don't allow exploitation to the degree that I believe you would like to see it happen. Beyond simply caring about our fellow man, we'd prefer to see fewer hospital bills

You say you use society, biology, etc.

Using "society", how does one define when the actions of person B, is exploiting person A. I would argue that the only way exploitation can occur is through coercion.

Using psychology: Are you suggesting that employers regularly exploit employees through psychological manipulation?

Using biology: I don't see how this even makes sense -- what biological principles can be used to define which market transactions are unethical.

Your own experience: aka, a subjective criteria for what is exploitation.

Common sense is not a valid criteria for defining exploitation. "Common sense" would define exploitation from everything ranging from sweatshop labor, to CEO pay, to the ridiculous and untenable Marxist notion that anything less than earning enough to buy back the product is exploitation.

Are you trying to say that's what your common sense tells you? I also find it interesting that you have made a point of belittling me field of knowledge. Has something angered you? Somehow I have a feeling that if you opened your mind and truly listened to what I am trying to communicate to you, you would understand that the knowledge I bring is from the human side of the equation. If you are curious about how psychology, biology, ethics, my own experiences and common sense can contribute to the overall betterment of society, I'd be glad to share it with you. But I have to see that your mind is open to that sort of thing.

I would argue that exploitation occurs when, through whatever process, employees are generally made to work in conditions when the market would otherwise offer them a better alternative.

You keep talking about ethics, but you seem to be defining what is ethical based on your arbitrary criteria, and not based on any actual definition of what constitutes ethical behavior on the part of person A, or person B.

Unfortunately, the US and its people have deemed certain low wages exploitative

In my opinion, this is fortunate... I am curious though about why you think this is such a horrible thing for you personally?

Argument by popularity is not valid.

I agree... but its the best we have right now... besides, do you really think the government is run by what the masses want? I think not! Still, if so many people are saying something, it usually speaks to something even if the solution to their problem isn't the one they are asking for

- Two people earning a minimum wage can live just fine in most parts of the country

Hmmm... not so sure about that because I know people who can't afford their bills and usually 2 people working in the household, making more than minimum wage... so that argument isn't quite accurate

- Having to live with a roommate or family to cut costs is not being exploited.

Who said anything about this?

- People earning a low wage can afford much more than they could 100 or 150 years ago. Thus, this supposed exploitation has decreased. But look 100 years into the future, and people will still be claiming exploitation, because low wage workers cannot afford upper class goods and amenities. Yet, in the economical sense, these people would be even better off than people today. There is no endpoint when it comes to such "definitions" of exploitation. At what point is there supposedly no more exploitation?

Are you worried that eventually people who have little opportunity will have more opportunity making it more difficult for the wealthy to get wealthier?

- Again, when you talk about people being mandated a certain wage, you are talking about entitlement. Claiming that someone is entitled to something is not a philosophical justification for why they are entitled, nor is it an argument as to why others are obligated to provide this for them.

I know.. you don't like that idea... however, people are obligated to do things all the time, this is just another obligation

Helping poor people is a good thing. Aiming to provide opportunity for people who lack it is a good thing. People doing this out of the goodness of their heart is a good thing.

Wow! I couldn't agree with you more!!

The mentality of entitlement however, is contrary to the position of helping others out of compassion. The mentality of entitlement is also contrary to the approach of empowering people.

Except that the mentality of entitlement is in most humans rich or poor. Most of us believe we should justifiably have more. It is this type of thinking that may one day make it so that all people have equality of opportunity

Ideally, there would be no entitlement mentality (and not simply because it is incompatible with a supposed land of the free, but because of the philosophical quagmire that supposing that people are entitled to things from others opens up). People who are truly in need would get assistance. Ideally this would be done as much as possible through charity. The claim that people are greedy, and so looking to charity, and so we need government, is inconsistent. If too many people are selfish and greedy, there would not be enough advocates of helping the needy in order to elect a government that would enact such policies. A mentality where people rely on government is counterproductive to people taking things into their own hands. Centralization is also counterproductive to charity, because charity is best done within the community, where people have a personal connection to what is going on around them -- i.e. people are much more likely to care about a local food bank, than to care about a national program that helps people in another state.

I think this may be related to the fact that lower class individuals are treated with much less respect, almost like they are not human. I believe that if you work in the human service field, you would probably start to understand this. Additionally, many psychologists, social workers and sociologists understand how the lack of equal opportunity makes it unlikely that people will succeed. I think what you are seeing is a country that is growing up... taking responsibility etc.