SIGforum
Conflicting Visions
August 02, 2017, 04:19 PM
JALLENConflicting Visions
Townhall.com
Walter E. Williams
August 2, 2017
For the most part, people share common goals. Most of us want poor people to enjoy higher standards of living, greater traffic safety, more world peace, greater racial harmony, cleaner air and water, and less crime. Despite the fact that people have common goals, we often see them grouped into contentious factions, fighting tooth and nail to promote polar opposite government policies in the name of achieving a commonly held goal. The conflict is centered around the means to achieve goals rather than the goals themselves. The policies that become law often have the unintended consequence of sabotaging the achievement of the stated goal.
Let's look at a policy pushed by advocacy groups, politicians and poorly trained, perhaps dishonest, economists -- mandated increases in the minimum wage. Nobel Prize-winning economist Paul Krugman claimed in a 2014 interview with Business Insider that there is actually not much risk of significantly higher wages hurting workers. He argued that low-wage workers are in non-tradable industries for which production cannot be moved overseas and are in industries in which labor cannot be easily replaced by technology. Krugman's vision is one that my George Mason University colleagues and I try to correct.
Those who argue that the price of something can be raised without people having a response to it have what economists call a zero-elasticity vision of the world. For them, labor prices can rise and employers will employ just as much labor after the price increase as before. There is no evidence anywhere that people have no response to the change in price of anything. Plus, the longer a price change remains in effect the greater the response to it.
Let's examine Krugman's assertion that low-skilled labor cannot be easily replaced by technology. Momentum Machines has built a robot that can "slice toppings like tomatoes and pickles immediately before it places the slice onto your burger, giving you the freshest burger possible." The robot is "more consistent, more sanitary, and can produce about 360 hamburgers per hour." Let's Pizza is a pizza-making vending machine from Europe that can make four different kinds of pizza in about 2 1/2 minutes.
Kay S. Hymowitz's recent article "The Mother of All Disruptions," in a special issue of City Journal, gives numerous examples of jobs loss through technology. According to The New York Times, 89,000 workers in general merchandise lost their jobs between the beginning of November 2016 and the end of March. And it's not just the U.S. where robots are replacing labor. Foxconn's iPhone-making facility in China has replaced 60,000 workers with robots.
The economic phenomenon that people who call for higher minimum wages ignore is that when the price of anything rises, people seek substitutes. We see it with anything. When the price of oil rose, people sought ways to use less of it through purchasing more insulation for their homes and fuel-efficient cars. When the price of beef rose, people sought cheaper substitutes such as pork and chicken. The substitution effect of price changes is omnipresent, but do-gooders and politicians seem to suggest that labor markets are an exception. It's bad enough when do-gooders and politicians have that vision, but it is utterly disgusting and inexcusable for a trained economist to buy into that zero-elasticity vision.
It's not just Krugman. On the eve of the 2007 minimum wage increase, 650 of my fellow economists, including a couple of Nobel laureates, signed a petition that read, "We believe that a modest increase in the minimum wage would improve the well-being of low-wage workers and would not have the adverse effects that critics have claimed." At the time, I wrote that I felt professional embarrassment for them; however, I felt proud that not a single member of our distinguished George Mason University economic faculty signed the petition.
Convincing people of how the world really works in hopes of promoting more humane policies requires examination and falsification of false visions and premises. That's a tough job with little prospect for completion.
Link
Luckily, I have enough willpower to control the driving ambition that rages within me.
When you had the votes, we did things your way. Now, we have the votes and you will be doing things our way. This lesson in political reality from Lyndon B. Johnson
"Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible." - Justice Janice Rogers Brown August 02, 2017, 04:57 PM
chellim1quote:
Convincing people of how the world really works in hopes of promoting more humane policies requires examination and falsification of false visions and premises. That's a tough job with little prospect for completion.
It's a good thing smart people like Walter Williams and Ben Shapiro are on the case!
"Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible."
-- Justice Janice Rogers Brown
"The United States government is the largest criminal enterprise on earth."
-rduckwor August 02, 2017, 09:26 PM
slabsides45Sooo, yer sayin' that Imma git a fresher slice of pickle?
________________________________________________
"You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving."
-Dr. Adrian Rogers
August 02, 2017, 09:47 PM
TigerDorePaul Krugman couldn't spell economics if you spotted him all the vowels, but I'll bet he can spell socio-fascist in at least 5 or 6 languages.
August 02, 2017, 10:46 PM
Rey HRHJAllen, I agree with the premise of not increasing minimum wage. But doesn't your favorite economist, Milt(?) advocated for a minimum salary for everyone for not working?
How does the two reconcile? a minimum living salary for not working and minimum wage for working?
"It did not really matter what we expected from life, but rather what life expected from us. We needed to stop asking about the meaning of life, and instead to think of ourselves as those who were being questioned by life – daily and hourly. Our answer must consist not in talk and meditation, but in right action and in right conduct. Life ultimately means taking the responsibility to find the right answer to its problems and to fulfill the tasks which it constantly sets for each individual." Viktor Frankl, Man's Search for Meaning, 1946.
August 03, 2017, 07:04 AM
TigerDoreI think Milton Friedman's statement, in context, was regarding the current welfare state. I believe he was saying it would be better just to give recipients the money as a salary instead of food stamps, etc. I don't believe Friedman actually thought a minimum salary was a good idea from an economic perspective.
quote:
Originally posted by Rey HRH:
JAllen, I agree with the premise of not increasing minimum wage. But doesn't your favorite economist, Milt(?) advocated for a minimum salary for everyone for not working?
How does the two reconcile? a minimum living salary for not working and minimum wage for working?
August 03, 2017, 07:54 AM
JALLENquote:
Originally posted by Rey HRH:
JAllen, I agree with the premise of not increasing minimum wage. But doesn't your favorite economist, Milt(?) advocated for a minimum salary for everyone for not working?
How does the two reconcile? a minimum living salary for not working and minimum wage for working?
Who is Milt?
My favorite economist is Adam Smith.
If you laid all the economists end to end, it would probably be a good idea.
Luckily, I have enough willpower to control the driving ambition that rages within me.
When you had the votes, we did things your way. Now, we have the votes and you will be doing things our way. This lesson in political reality from Lyndon B. Johnson
"Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible." - Justice Janice Rogers Brown August 03, 2017, 09:49 AM
Rey HRHquote:
Originally posted by JALLEN:
quote:
Originally posted by Rey HRH:
JAllen, I agree with the premise of not increasing minimum wage. But doesn't your favorite economist, Milt(?) advocated for a minimum salary for everyone for not working?
How does the two reconcile? a minimum living salary for not working and minimum wage for working?
Who is Milt?
My favorite economist is Adam Smith.
If you laid all the economists end to end, it would probably be a good idea.
At least I remember there was a "Milt" in the name. :-) Milton Friedman is one that I've seen you posted articles from. I mean, Adam Smith, he hasn't written anything new lately.
"It did not really matter what we expected from life, but rather what life expected from us. We needed to stop asking about the meaning of life, and instead to think of ourselves as those who were being questioned by life – daily and hourly. Our answer must consist not in talk and meditation, but in right action and in right conduct. Life ultimately means taking the responsibility to find the right answer to its problems and to fulfill the tasks which it constantly sets for each individual." Viktor Frankl, Man's Search for Meaning, 1946.
August 03, 2017, 09:52 AM
Shaqlquote:
I mean, Adam Smith, he hasn't written anything new lately.
Neither has Milt.
Hedley Lamarr: Wait, wait, wait. I'm unarmed.
Bart: Alright, we'll settle this like men, with our fists.
Hedley Lamarr: Sorry, I just remembered . . . I am armed.
August 03, 2017, 10:01 AM
sjtillAnd neither has Tom Sowell. Thanks for posting, I'm glad WW is still writing the truth.
_________________________
“Remember, remember the fifth of November!"
August 03, 2017, 10:51 AM
JALLENI thought maybe you were thinking of Milton Keynes.
Luckily, I have enough willpower to control the driving ambition that rages within me.
When you had the votes, we did things your way. Now, we have the votes and you will be doing things our way. This lesson in political reality from Lyndon B. Johnson
"Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible." - Justice Janice Rogers Brown August 03, 2017, 11:02 AM
Scoutmasterquote:
Originally posted by JALLEN:....My favorite economist is Adam Smith.
If you laid all the economists end to end, it would probably be a good idea.
If you asked a dozen economists a question, you would get 13 contradictory answers.
I had a grad class in political econ, the prof had dual Ph.D's from Northwestern, one in Finance, one in Econ. He spent an hour the first day of class reviewing undergrad econ, the second hour explaining the falsehoods of such. Politics and economics are tightly dovetailed, one will always influence the other.
"Liberty lies in the hearts of men and women. When it dies there, no constitution, no law, no court can save it....While it lies there, it needs no constitution, no law, no court to save it"
- Judge Learned Hand, May 1944 August 03, 2017, 11:11 AM
chellim1quote:
Originally posted by JALLEN:
I thought maybe you were thinking of Milton Keynes.
Is he related to John Maynard Keynes?
"Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible."
-- Justice Janice Rogers Brown
"The United States government is the largest criminal enterprise on earth."
-rduckwor August 03, 2017, 11:13 AM
TigerDorequote:
Originally posted by JALLEN:
I thought maybe you were thinking of Milton Keynes.
August 03, 2017, 11:14 AM
Scoutmasterquote:
Originally posted by chellim1:
quote:
Originally posted by JALLEN:
I thought maybe you were thinking of Milton Keynes.
Is he related to John Maynard Keynes?
Reportedly Keynes and FDR meet for a goodly chat. At the end of which Keynes commented along the lines of "FDR is a brilliant politician, but he knows nothing of economics". And FDR reportedly stated "Keynes is a brilliant economist, but he knows nothing of politics".
"Liberty lies in the hearts of men and women. When it dies there, no constitution, no law, no court can save it....While it lies there, it needs no constitution, no law, no court to save it"
- Judge Learned Hand, May 1944 August 03, 2017, 12:50 PM
bigdealquote:
Originally posted by Shaql:
quote:
I mean, Adam Smith, he hasn't written anything new lately.
Neither has Milt.
And yet, the basic concepts and principles of economics haven't changed. There's a message in there somewhere...
quote:
Originally posted by Scoutmaster:
Reportedly Keynes and FDR meet for a goodly chat. At the end of which Keynes commented along the lines of "FDR is a brilliant politician, but he knows nothing of economics". And FDR reportedly stated "Keynes is a brilliant economist, but he knows nothing of politics".
And others in attendance reportedly stated, "Both Keynes and FDR are narcissistic assholes with a god like complex."
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Guns are awesome because they shoot solid lead freedom. Every man should have several guns. And several dogs, because a man with a cat is a woman. Kurt Schlichter
August 03, 2017, 01:05 PM
TigerDoreKeynes knew nothing of economics either.
quote:
Originally posted by Scoutmaster:
quote:
Originally posted by chellim1:
quote:
Originally posted by JALLEN:
I thought maybe you were thinking of Milton Keynes.
Is he related to John Maynard Keynes?
Reportedly Keynes and FDR meet for a goodly chat. At the end of which Keynes commented along the lines of "FDR is a brilliant politician, but he knows nothing of economics". And FDR reportedly stated "Keynes is a brilliant economist, but he knows nothing of politics".
August 03, 2017, 01:33 PM
Scoutmasterquote:
Originally posted by bigdeal:....And others in attendance reportedly stated, "Both Keynes and FDR are narcissistic assholes with a god like complex."
I hadn't heard that, but there is a ring of truth there.
"Liberty lies in the hearts of men and women. When it dies there, no constitution, no law, no court can save it....While it lies there, it needs no constitution, no law, no court to save it"
- Judge Learned Hand, May 1944