I think you've rightly constrained the issue down to the balance of labor and demand for that labor, but first I'll respond to the above quote. Please forgive my late response. As far as the Appalachia/inner city deal, I don't think anyone "owes" the individual, just that there's nothing approaching an even playing field so far as mobility. I don't think society as a whole is served by this, it's not just "the plight of the poor". I've mentioned the prerequisites for a good relocation before: you need enough info to realize where it might be better, enough money to facilitate the bare essentials in moving, and the time/info/money/education/etc. to find, qualify for, secure, and set yourself up a new occupation. You could look for work after moving, but then you need to save up more money, and the greater gamble means you'll want more info to determine if it's a good move.

I think this goes to the heart of how opponents see liberals' economic views. Outside of college students and humanities professors, not many liberals I know really believe the poor are completely doomed without intervention, are owed great wealth, etc. The basic engine of our economy is competition, and that extends to relatively fair competition among individuals. People destined for greatness may rise up out of poverty, and some among the wealthy prove themselves as people of great capability. But there are plenty of bright, hardworking people who start out at the bottom and never rise as far as their abilities warrant, while it's relatively easy to stay wealthy once you get there.

I remember before Clinton Repubs used to laud anyone who pulled themselves up from poverty as proof of a sort of Social Darwinism, and deride rich establishment liberals as insincere: oddly this died off after the Man from Hope was elected and followed by Bush II. There's a natural, reciprocal relationship between the difficulty of rising and falling in status. I think we'd be better served if mobility in both directions were about equal, and we'd have more of a meritocracy. I imagine this is a thread-worthy point of contention, how close we are to a meritocracy and what would make it better.

Anyway, you've made one of your strongest theoretical arguments on the issue of the balance between labor supply and demand. However, I just don't think it pans out in practice, at least not in a manner quick and exact enough (I'll address that last). I'd imagine you'd agree that there exists measurable unemployment in places and times without the government regulation blamed. You provide for 2 main causes. First, people who are either unwilling or unable to work. We have little argument here, except perhaps the idea that charities will provide for the unable (interesting if one's unable to work b/c one was mutilated in a factory accident). I think these numbers are exaggerated by many people, though, and don't account for much of the unemployed potential workforce.

Can creative destruction fill the gap in all times and places where there was little to no regulation and considerable unemployment? My guess would be no, but "frictional unemployment" (I believe that's the term) can not only be painful, but long-term in a region. Capital is king, and the flow of money to a better use might entail flow to another region. The gap might take quite some time to correct, and as mentioned before, not all people are highly mobile.

Additionally, I think the same sort of "big picture, long-run" argument can apply to the theory regarding labor supply as a whole. The adjustment is very gradual, and influenced by factors like consumer confidence. People need money to buy the "something more" than they have, and if their supply is limited, they'll be more likely to hoard what little they have. Where there's unemployment and low wages, any new industry is going to have a small market to appeal to- slowing the adjustment even further.

Personally, I believe a likely result of a more Libertarian economic system would not only be the usual suspects of decreased social mobility and greater gap between the rich and poor, but also an exaggerated boom-bust cycle (yet another thread?). It's the same cloth as trickle down economics, and people aren't very careless about dropping cash when things are tight.

Okay, let me try to lay it out as clearly as I can, and you can tell me what's wrong with this logic:

The negative impact of an $X minimum wage would be twofold:

1. Increase the risk of unemployment for those whose labor is worth less than $X/hour. This will occur because the cost/benefit of employing anyone whose labor is worth less than $X/hour will need to be reevaluated, because the cost cannot remain below $X/hour. This evaluation will, at least in some cases, lead firms to reduce their previous sub-$X workforce rather than absorb the cost of the increase to $X/hour. The result of this is that there will be less jobs paying $X/hour after the minimum than there were paying $X/hour or less before the minimum. Result: higher unemployment among those whose labor is valued at less than $X/hour. In addition to this, consider that some firms may in fact be forced out of business due to the inability to operate profitably with the new minimum. This naturally would contribute further to unemployment.

2. Drive up the costs of products that rely in any part on workers making less than $X/hour. This will occur because firms will have to either pay more for labor they used to get for less, or use some alternative method for performing the tasks previously done by sub-$X/hour labor. Such an alternative method will generally be more expensive than the sub-$X/hour labor had been, or else the firm would have used the alternative method in the first place.

There is no "reward curve" because there is nothing positive about any minimum wage. Any minimum wage will both increase unemployment among those whose labor is worth less than the minimum, and will also increase the costs of goods. (Unless the minimum is set below the lowest market wage, which would make it meaningless.)

I also assert as intuitively obvious that both effects hold true no matter what value you set for X. The higher X goes, the greater the number of people who become overpriced and are therefore at higher risk of unemployment. The higher X goes, the greater number of goods that are made more expensive due to effect number 2, and the greater the extent of that added cost.

The only winners I can imagine are those whose labor is already valued at close enough to $X/hour so that an employer decides to pay them $X and add the difference to costs and/or deduct it from profits. So, for example, if the minimum was set to $15 and my employer had previously paid me $14.50, chances are I wouldn't lose my job, and would in fact get a $.50 raise. Of course, as I covered above, all goods I consume that rely on labor at $15 or less would be increasing in cost, so it is not clear whether I really would come out ahead anyway. Regardless, a policy whose beneficieries are such an arbitrary slice of the economic spectrum seems unsupportable.

Oh yes, there is another set of winners as well. That is anyone that seeks to eliminate competition by lower-cost workers. As an aside, this explains why labor unions vehemently support minimum wage increases even when all their members make substantially more than the minimum wage. The more low-cost labor they can remove from the picture, the more secure they are with their often bloated costs. But I doubt that anyone would argue that this particular type of beneficiary justifies minimum wage laws.

That's my argument against the minimum wage. I hope it stands up to your scrutiny. I believe I have shown satisfactorily why any minimum wage is pure economic poison, and the amount you set as the minimum just determines the dose.

PrismPaul, you obviously know a lot more than I do about economics. So I have a question, and maybe you can explain it to me. I understand what you are saying about the minimum wage. Why do you suppose it is that, between 1990 and 2000, the minimum wage was raised twice, and unemployment kept going down?

Since I can't really hang in there on all this economics-talk, I can only point to the real world. Let's take an inner city ghetto. Here you have a population of people living in poverty. They are, on average, less educated, and obviously have very few assets. Relocation would be very difficult. If there was no minimum wage at all, what's to stop companies in this ghetto to start paying people say, $2/hour? They essentially have a captive workforce - people with few or no options. Assuming John Doe has to work to put himself through school, how will he do it? I can't imagine that the cost of living will go down suddenly to accomodate the wage drop.

It seems to me that in poor populations, a minimum wage does a lot of good. Ultimately it helps people to get off the Welfare rolls. A single mother who must pay for childcare in order to work, will have fewer options if she cannot get a job which pays a living wage (let alone minimum wage!). She will either have to work more jobs, or apply for state assistance.

Maybe I'm wrong, but if what you are saying is true, then for all these years of a minimum wage, rising higher, shouldn't there have been a corresponding rise in unemployment?

Maybe there's something I'm just not getting, but since the minimum wage began in 1938, we have also gone through a period of (overall) tremendous growth at all levels of society. Now, I'm not saying that the minimum wage caused the growth - I do understand that economic models are far more complex than that - but are you in fact saying that the minimum wage has hampered that growth?

Maybe I'm just dumb, I don't know. But the last sustained period of wealth creation before 1938 was after the Civil War. That period is the closest our country has ever come to totally unrestrained capitalism, and the results for the working populace were simply horrendous. Unregulated businesses often paid people in company scrip, good only at the company store. During the railroad expansion, an estimated 20,000 workers died each year. Faced with horrible conditions, workers who attempted to organize were put down violently - remember the Pinkertons? Remember what happened at the Ludlow camp in Colorado?

Could you maybe explain your theory by using a real world, hypothetical example? How about Mary Brown - 24, single mother of a pre-school child, GED. She lives in a ghetto. How will getting rid of the minimum wage help her? This isn't a trick, I really want to know what you think.

Mary Brown is most likely making more than the minimum wage. Minimum wage isn't designed to provide for a family. That would be the equivalent of expecting the teenaged icecream scoooper at Baskin Robbins to be able to sustain a family on her salary. Minimum wage sets the standard for workers with no skill and virtually no experience level.
Raising the minimum wage doesn't just effect those making the lowest wage, skill levels above that must be adjusted accordingly. This almost never comes up in these types of debates, but it's important. Even Prismpaul's example was insufficient (though a good post overall, and I agree with him), because the theoretically uneffected worker he envisioned already making 14.50 an hour who wouldn't be eliminated if the minimum wage went to 15 doesn't give the full story. The reality is, using the theoretical 15 dollar/hour minimum, 15 would be the wage for the unskilled, uneducated, entry-level salary in the most indigent areas of the country. Others with higher skill and education levels should and would make much more by comparison.
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In Quark's theoretical example of ghetto area workers being forced to take $2 an hour. There is one flaw. While these ghetto workers may be immobile, capital is not. Soon more suppliers of jobs would enter the area. Soon wages would get driven up until they closely matched wages in surrounding areas.

Actually what my original $50 an hour comment was meant to show is that government is not the force primarily responsible for the minimum wage. Government cannot set a minimum wage of $50 an hour because the market could not absorb this action. A minimum wage can only be set at a level that the market can absorb without massive unemployment and/or inflation. When people continue to focus on 19th century working conditions and credit government with improving those conditions they are confusing cause and effect. The free market creates a surplus of goods. After the free market creates a sufficient surplus government can hamper productivity and the free market with laws and regulations. Once child labor is no longer required to produce enough wealth to keep a family in basic neccessities it can be abolished. Once 95% of the population make $X an hour, $X an hour can be set as the minimum wage without a great effect on employment or inflation. Howard Dean is taking some heat on his stand that countries that trade with the US should meet the same environmental standards imposed in the US. The reason he is taking heat is because third world countries cannot afford to be held to the same standards. Dean's stand would effectively eliminate trade with the third-world.

There is a free market solution to unsafe work environments, it is called civil lawsuits. There is no free market solution to preventing pollution, it requires government action. The fact that 97.2% of individuals over 30 receive greater than the minimum wage is clear evidence the minimum wage is not needed.

[quote=Mrs. Pigpen,Oct 28 2003, 07:21 AM][quote=quarkhead,Oct 28 2003, 12:06 AM]Could you maybe explain your theory by using a real world, hypothetical example? How about Mary Brown - 24, single mother of a pre-school child, GED. She lives in a ghetto. How will getting rid of the minimum wage help her? This isn't a trick, I really want to know what you think. [/quote]
Mary Brown is most likely making more than the minimum wage. [quote]Only 8 percent of low-wage workers were heads of poor households in 1989, down from 31 percent in 1939.
* And almost half of low-wage workers are now in families with incomes more than twice the poverty level. [/quote] Minimum wage isn't designed to provide for a family. That would be the equivalent of expecting the teenaged icecream scoooper at Baskin Robbins to be able to sustain a family on her salary. Minimum wage sets the standard for workers with no skill and virtually no experience level.
Raising the minimum wage doesn't just effect those making the lowest wage, skill levels above that must be adjusted accordingly. This almost never comes up in these types of debates, but it's important. Even Prismpaul's example was insufficient (though a good post overall, and I agree with him), because the theoretically uneffected worker he envisioned already making 14.50 an hour who wouldn't be eliminated if the minimum wage went to 15 doesn't give the full story. The reality is, using the theoretical 15 dollar/hour minimum, 15 would be the wage for the unskilled, uneducated, entry-level salary in the most indigent areas of the country. Others with higher skill and education levels should and would make much more by comparison.
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[quote]"No serious economist doubts that the minimum wage destroys jobs. The only question is how many. Economists Richard Burkhauser, Kenneth Couch and David Wittenberg estimate that every 10 percent increase in the minimum reduces employment by between 2 percent and 6 percent. They figure Congress' 1996 minimum wage hike cost between 153,000 and 457,000 teens their jobs." [/quote][quote]"[T]he average income of minimum-wage workers increases by 30% within one year of employment on the basis of learned skills. Which is why any artificial barriers to learning those skills - which is what the minimum wage is - represents a cruel hoax to the working poor. Wage increases due to increased skill levels explain the remarkable fact that only 2.8% of workers over the age of 30 are receiving the minimum wage."[/quote][/quote]
OK, that's the way the Cato folks see it. Here's how they see it at the Economic Policy Institute.

[quote]Women are the largest group of beneficiaries from a minimum wage increase: 60.6% of workers who would benefit from an increase to $6.65 by 2003 are women. In 1998, an estimated 12.6% of working women would have benefited from a one dollar increase in the minimum wage.

A disproportionate share of minorities would benefit from a minimum wage increase. African Americans represent 11.7% of the total workforce, but are 18.1% of workers affected by an increase. Similarly, 11.3% of the total workforce is Hispanic, but Hispanics are 14.4% of workers affected by an increase.

In 1998, half of the benefits of a minimum wage increase to $6.15 would have gone to workers in households with annual incomes of less than $25,000. In fact, 18% of the benefits would go to households with annual incomes less than $10,000, and another 32% of the benefits would go to households with annual incomes between $10,000 and $25,000.

The benefits of the increase disproportionately help those working households at the bottom of the income scale. Although households in the bottom 20% received only 5% of national income, 35% of the benefits of the 1996-97 minimum wage increase went to these workers. The majority of the benefits (58%) from the increase went to families with working, prime-aged adults in the bottom 40% of the income distribution.

Relatively large shares of the workforce (up to 13.6%) in some Southern and Western states would benefit from an increase to $6.65 in 2003.[/quote]

I have an article called "Do Some Workers have Minimum Wage Careers?" written by William J. Carrington, a senior economist at Welch Consulting and Unicon Research Corporation, and Bruce C. Fallick, an economist at the Federal Reserve Board.
[quote]For example, we estimate that more than 8 percent of workers spend at least 50 percent of their first 10 post-school years working in jobs paying less than the minimum wage plus $1.00. We find that workers with such minimum wage careers are largely drawn from demographic groups with generally low wages: women, minorities, and the less-educated. Thus, while relatively few in number, there is an identifiable subpopulation of workers whose lifetime income and employment is likely to be associated with minimum wages. For individuals in this group, minimum wages do not have merely transitory effects.[/quote]

In your quote it says that 2.8% of workers over 30 receive the minimum wage. But if you add people who are making only just more than minimum wage (up to $2 over minimum wage), that percentage climbs to almost 10% of workers, which is a significant group of people.

There are already exceptions in the minimum wage, for teens and students.

[quote]Economists Richard Burkhauser, Kenneth Couch and David Wittenberg estimate that every 10 percent increase in the minimum reduces employment by between 2 percent and 6 percent. They figure Congress' 1996 minimum wage hike cost between 153,000 and 457,000 teens their jobs.[/quote]
Why? How? They "estimate" and they "figure." I'd like to see more on how they did that. All that second link does is quote people from Cato and Heritage.

At the Oregon Center for Public Policy they attest that raising their minimum wage to the highest in the nation has had positive benefits to the labor force.

This is the opening paragraph of "The Minimum Wage Can Be Raised: Lessons from the 1999 Levy Institute Survey of Small Business."
[quote]n a 1999 Levy Institute survey of small businesses, more than three-quarters of the firms surveyed said their employment practices would not be affected by an increase in the minimum wage to $6.00. Their response makes it clear that the minimum can be raised to at least that level. The question now becomes how high can it be raised before serious employment consequences occur.  [/quote]

It goes on to say:
[quote]In a well-known essay John Dunlop (1957) suggested that the internal wage structure of a firm was affected as much by external as internal forces, and he proposed a theory of wage contours. In essence, the theory posits that an economy's overall wage structure can be thought of as a series of wage contours (with a contour representing a wage or a wage range for a group of workers with similar characteristics working in similar industries). For example, contours might be defined as $5.15 (the statutory minimum), $5.16 to $6.00, $6.01 to $7.25, and so on.  A change in a wage rate affects other wages within that wage range (or contour) and also has a ripple effect on the contours surrounding it; the nearer to the changed rate, the greater the impact. Thus, the statutory contour and the contour immediately above it will be most affected by changes to the statutory minimum. However, because of the ripple effect, employers (and employees) who do not pay (or earn) the minimum wage still have a considerable stake in any changes to that wage.

When the responses of the firms in the survey are viewed in the context of wage contours, they are not so anomalous after all. About half (50.5 percent) of the small businesses surveyed paid an entry-level wage between $5.15 and $7.25, and an additional 17.7 percent paid an entry-level wage between $7.26 and $8.50.3 The wage contour theory would lead us to expect that an increase in the minimum wage would affect not only those earning the statutory minimum but also those earning a wage close to the minimum, particularly those in the wage range immediately above the minimum (Spriggs and Klein 1994; Gordon 1996; Levin-Waldman 1999).

Not surprisingly, the percentage of firms saying that they would be affected by a wage increase drops as the entry-level wage rises, and the patterns appear to offer some support for the wage contour theory (see Table 2). Firms paying the statutory minimum or immediately above had the highest percentage saying they would be affected by an increase to $7.25. Of the firms farther removed from the minimum (those paying $6.01 to $7.25 and $7.26 to $8.50), over 93 percent said they would not be affected by an increase to $6.00, while 58 percent of those paying $6.01 to $7.25 and 85.3 percent of those paying $7.26 to $8.50 stated they would not be affected by an increase to $7.25. 

Wage contour theory seems to indicate that since the minimum wage is likely to have its greatest effect on the contours just above it, it is not at all surprising that the disemployment effect should drop for employees of firms affected at $7.25. A critical issue in the minimum wage debate, therefore, is not the level of the statutory minimum itself or the costs and benefits of an increase in the wage for those earning it, but the impact of an increase in the minimum wage on firms paying wages around it. And this issue, unfortunately, has received little attention. [/quote]

And it concludes:
[quote]The minimum wage was originally conceived as an element of macroeconomic policy with the goal of building up depressed wages and prices. As a society, we have an economic and moral interest in ensuring that those who work earn a wage that allows them to live in dignity above the poverty line. With appropriate consideration given to wage structure and employment consequences, the minimum wage can be used to boost incomes for those at the low end of the wage scale. Today there is the additional concern of growing wage inequality, and research into the relationship between the minimum wage and wage contours could provide some insight into means of narrowing the wage gap.  [/quote]

You're proposing increased litigation as an ideal solution? To anything? You'd rather have the lawyers tying up the courts (part of the government) than have the government regulate anything directly? I'd be surprised even to hear a lawyer make such a suggestion seriously, let alone someone who talks so frequently about individual responsibility.

You are assuming that regulations reduce civil lawsuits. The ADA is a perfect example of new regulations that increased litigation.

Sorry for the delay in responding to the good posts that replied to my own. I hope the momentum hasn't died on this thread as a result.

Regarding the study quarkhead quoted from the Economic Policy Institute. I read their study in detail, and they themselves provide the explanation for why the 1996-97 minimum wage increase did not correspond to a net increase in unemployment. At least two other factors were working simoultaneously to decrease unemployment and raise market wages: 1) welfare reform, which reduced unemployment by moving the most employable of the unemployed from welfare to work, and 2) a growing economy.

I've pointed out earlier in this thread that the economy is so immensely complex that you cannot hope to see direct cause and effect outcomes from individual policy changes. There are just too many factors at play. That's why in good times, free-marketers can credit the free market aspects of the economy and interventionists can credit the interventionist aspects. And they can each just do the reverse during bad economic times.

Again, this is why I think we have to revert to a logical, reasoned approach to track down the cause and effect of individual policies. In my Oct 28 post, I attempted to do this with the minimum wage as well as I could. Simply put, if you artificially increase the price of something (in this case labor), and hold supply steady, then demand will decrease. A decrease in the demand for labor means an increase in unemployment.

EPI recognizes this logic and tries to explain why it does not occur using their own appeal to reason:



Their explanation is, in effect, that employers find ways of absorbing the cost of the minimum wage increase in other areas, so that demand for labor remains the same.

I find this explanation incredibly naive and weak. (Am I allowed to be condescending to EPI? )

Simply put, if there were opportunities to increase productivity, why would the companies wait around for a minimum wage increase in order to find them? Companies competing in a free market are constantly seeking to improve productivity.

If the contention is that the minimum wage increase itself caused these improvements, then why would such a minimum need to be imposed by government? If higher wages generate "higher productivity, lower recruiting and training costs, decreased absenteeism, and increased worker morale" to the extent that these improvements offset the cost of the increase, then it is in the best interests of companies to increase the wages and no one should have to force them to do it.

In fact, this cost/benefit tradeoff may be true in some cases. In others, it will not be. Every business has its own unique circumstances, as does every worker. If we let each business decide for themselves what it makes sense to offer in terms of wages to get the results they want, and allow them to compete with one another for the available labor, then all businesses and individual workers can do what makes sense in their own unique circumstances to maximize their own interests. If we place artificial floors on wages, this removes options from both employers and employees. The idea that both employers and employees are better off when they have fewer options available to them defies common sense.

Hope this adequately addresses the EPI study.

I also want to comment on this exchange:



I think Hugo makes a good point. But there is another potential assumption in Platypus's post as well. That is that if we relied on civil lawsuits to address unsafe working conditions, there will be "increased litigation".

I think it is reasonable to assume that the threat of litigation itself would be a strong disincentive for people to engage in the behaviour in the first place. So if we relied on a reasonable system of lawsuits based on "industry safety standards" etc, there would actually be less of a problem to begin with. Most companies would realize that any short term gains they could reap by skimping on safety would not be worth the potential costs of litigation and penalties.

Finally, the idea of holding people and corporations accountable for the harm they do to others is completely consistent with the idea of individual responsiblity. I don't see the contradiction that Platypus's last statement implies.

How interesting. How very, very interesting. Laissez-faire types tell us that businesses will spring up or expand to serve any market that is created, even when common sense tells us that's not always the case. Now, apparently, we're supposed to believe that the legal profession will not expand in such a way, if an opportunity were created. They'd exercise such restraint, I suppose, for the good of society, just as they did in personal-injury lawsuits and ADA lawsuits.

Except that they didn't. The airwaves are full of lawyers offering their services in personal-injury cases, both those already covered by regulations (e.g. workplace safety) and those not so covered. The specialty of ADA-related lawsuits has exploded over the last few years. Lawyers are rushing into these new markets just as fast as they can. They will expand into the new markets Hugo would create just as aggressively; there's no reason whatsoever to suppose they wouldn't. For every regulator we have today, we'd need three new judges instead, to serve dozens of lawyers attracted to such cases by the smell of deep pockets. For every page of FDA/OSHA/whatever forms today, there'd be ten notarized and submitted to the courts as evidence.

That's both inefficient and anti-meritocratic. It would be a dark day indeed for markets supposedly based on competition and innovation if such ideas were to become commonplace. The civil legal system is supposed to fill in the cracks where law and common sense have failed, not be the bricks comprising the bulk of conflict resolution.

Platypus: I agree with you that where there is no disincentive to pursue litigation, it gets out of control. That's a good reason to have intellegent tort reforms, such as requiring a losing plaintiff to cover the defendent's costs, and placing reasonable caps on non-compensatory damages.



I agree that the civil legal system is supposed to "fill in the cracks", and not be the bricks of conflict resolution. But I see the real bricks as the voluntary contracts and relationships that people form for their mutual self-interest, not a bunch of government regulations.

The vast majority of people do not seek to harm others. The legal system is the right place to deal with the rare exceptions.

Yes, of course litigation explodes when government creates new "rights" out of thin air, and invents all kinds of ways that opportunistic lawyers can invent illegitimate claims of harm and be rewarded ridiculous punitive damages. The new "market" for ADA-based claims is shameful, but you can thank our legislators for that.

But there is no reason to fear that a tort system oriented toward reasonable compensation for real and demonstrated harms should get out of hand. Such a system is a far more efficient way to deal with the harm a small minority of people may do to others than creating thousands of one-size-fits-all government regulations that everybody must follow.

Sometimes yes, sometimes no. It depends very much on the cost of regulatory compliance and oversight, the cost of litigation, and the relative frequency of the two. We could probably argue for days about which is better more often, but the one thing we can be sure of is that neither approach is superior in every possible scenario.

Actually, I'm pretty comfortable saying that using the courts to address harms is always a better approach than trying to regulate harms out of the system. I say "pretty comfortable" because the fact that I can't think of a case doesn't mean one doesn't exist. But I'd be interested in hearing one.

Editted to add:



I would add two additional factors:

1) the extent and cost of unintended consequences caused by the regulations

2) the probability of the regulations actually accomplishing their intent

One of the reasons I am comforable saying that regulation is never the best route is because 1 is usually higher than expected and 2 is usually lower than expected.

I want to go way back to pennDerek's very good post and respond.



As I've been considering this, I keep going back to the pioneers that originally settled the west in this country. Who could argue that any able-bodied person today, no matter how poor, doesn't have extraordinary advantages over those pioneers? And I mean extraordinary advantages in all the areas you mention: information access, the resources to move, the number of opportunities available, etc.

The pioneers lived daily in a level of poverty that no one needs to experience today. And yet they took their situation on their own shoulders, and worked through incredible hardships to make a better life for themselves and their families.

I submit that if you took any able-bodied poor person from anywhere in this country, and replaced their philosophy and attitude with the philosophy and attitude of the average pioneer, they would be self-sufficient within weeks and rich within a decade.

Ironically, the very programs that are designed and implemented out of compassion for the poor constantly erode the very philosophy and attitude of personal responsibility and empowerment that these people need the most.

If the only thing keeping the "geographically poor" from improving their state is access to the information and resources necessary to find and capitalize on opportunities, then why aren't the people who care so much for these poor helping them with these things? Instead, we tell the poor that they are not responsible for their own situation, that they are "down-trodden", and that others "owe them" a decent living. And we take away any incentive they might have to make their lives better by keeping them in all the fritos and pepsi that food stamps can buy.

If you've driven through the backwoods of West Virginia, you may have seen the trailers in which some of these people live. They are characterized by the floods of garbage trailing down the mountain side, which they have thrown out their back window. These are people who have been robbed of any semblance of self-respect and individual responsibility. I believe this is largely the result of our welfare system.



First, you have to ask who is to judge what one's abilities "warrant"? But putting that aside, I argue confidently that there is no reason that a bright, hardworking person in this country should be trapped in poverty, and there would be even less reason if the government stopped trying to "level playing fields", etc. Not everyone will get as wealthy as they might like. I certainly don't argue that all outcomes in a free market would be judged as "fair" by most objective standards. It is no more "fair" that someone is born into money than it is that someone is born with great physical talents, or great looks, or whatever. But I believe that all individuals have something substantial to contribute to society. And I believe that maximizing freedom, including economic freedom, offers the best chance for most people to maximize that potential and as a result maximize their individual well-being.



The more power you give government over the economy, the more you interfere with both kinds of mobility you favor. On the low end, government regulations, often written by the rich who can afford to comply, make it more difficult for the poor to compete. I've already explained how I believe the minimum wage cuts off the bottom rungs on the mobility ladder. Most all government attempts to "level the playing field" have this consequence, sometimes intended, sometimes not.

On the other end, government power over the economy helps the rich stay that way. The rich buy political favors for their industries, including policies that make it hard for domestic entrepreneurs, foreign companies, and others to compete with them. This kind of thing can be plainly seen with legislation like farm subsidies, that are dressed up as attempts to help poor, struggling farmers, but are written by and for the huge farm conglomerates.



Okay. But what government economic intervention can hope to speed this cycle or improve this in any way without causing worse side effects? We can get impatient with the free market, but doing so is exactly like being impatient with the goose that lays the golden egg. And attempts to artificially speed up the creation and distribution of wealth are exactly like, if not killing the goose, then making it very ill.



I hope some of what I've written will cause you to question the idea that the "usual suspects" you cite are really the result of economic freedom, as opposed to government interference. Yes, the boom-bust cycle would require its own thread. Again, the idea that this is an inherent characteristic of a free economy that must be managed by government is flawed in many ways. Many believe that the boom-bust is exaggerated by poor government monetary policy and economic interference.

Much of this discussion comes down to the idea that if there is anything we don't like about the economic state of things, government is a good way to solve it. Libertarians are often accused of being overly simplistic and seeing things as black and white. I can see how those who have not plumbed the depth of all these arguments can feel that way. But it seems to me much more overly simplistic to believe that a handful of congressmen and senators can somehow "fix" something as vastly complex as the US economy without inadvertantly causing all kinds of harmful outcomes.

Freedom isn't perfect. But it beats the alternative.

I think we all agree that there is no reason anyone should be trapped in poverty. Where we disagree is whether they are.



Please explain how trying to level the playing field inevitably leads to a less level playing field.



You say that as though it's just a fact and there's nothing that can be done about it. Should we not make every effort to improve fairness? Are fairness and freedom necessarily in conflict, such that we must sacrifice the former to preserve the latter?



You're using "freedom" in a manner to which I have objected in the past, and frankly find offensive. Your usage, in context, refers specifically to freedom from governmental influence, while the signature that provoked this thread quite clearly starts with an assumption that government is not the only threat to freedom. The difference between these two points is very much the subject of this debate, so using words like "freedom" in a way that assumes one answer makes this debate even more difficult than it needs to be.



That's your opinion. Others have looked at the data available to them, applied their knowledge of economics and statistics, and reached a different conclusion.



It would seem to me that this is a phenomenon of wealth, not government. Do the rich not try to purchase influence (or instruments of influence) regardless of government type or policies? Blaming the government for something that the rich have always done since before there were governments is like blaming the police for crime, or the fire department for fires.



Please identify those flaws, or provide an alternative that is not just as flawed. There's nothing constructive about just saying something is flawed without elaborating.



Not so much. I think people are just asking that we consider government as one possible agent of change, perhaps a better way in some cases than relying on the laissez-faire deus ex machina.



Liberals are often accused of being overburdened with empathy and not rational enough. I can see how those who are too lazy to think things through can feel that way. Oh, did that offend you? So sorry. Maybe we should both try not to portray all disagreement as stemming from lack of knowledge or diligence.



There's that offensive use of "freedom" again, portraying a different interpretation of freedom as an "alternative" to freedom. Cut it out.

[quote=Platypus,Nov 7 2003, 12:52 PM][quote=PrismPaul,Nov 7 2003, 11:10 AM]But putting that aside, I argue confidently that there is no reason that a bright, hardworking person in this country should be trapped in poverty[/quote]
I think we all agree that there is no reason anyone should be trapped in poverty. Where we disagree is whether they are.[/quote]

No I agree that they are too. But, as I explained in my post, I think that the elements that trap them are more internal (motivation, attitude, etc.) than external (lack of opportunity, lack of information, etc).

[quote=platypus][quote=me]there would be even less reason if the government stopped trying to "level playing fields", etc.[/quote]

Please explain how trying to level the playing field inevitably leads to a less level playing field.[/quote]

I have attempted to do this at length in this thread. See my discussion of how the minimum wage hurts the poor, how welfare hurts the poor, how regulation hurts the poor, etc.

[quote=platypus][quote=me]I certainly don't argue that all outcomes in a free market would be judged as "fair" by most objective standards.[/quote]

You say that as though it's just a fact and there's nothing that can be done about it. Should we not make every effort to improve fairness? Are fairness and freedom necessarily in conflict, such that we must sacrifice the former to preserve the latter?[/quote]

I would say that fairness and reality are in conflict, if the term fairness is used in the sense of equal outcomes. Since we are all different, all of us have advantages and disadvantages over others in some respects. My argument is that calls for "fairness" are often used to justify government interventions in the economy. To the extent that this is done, I do feel that it pits our real freedoms against an imaginary possibility of fairness.

[quote=platypus][quote=me]And I believe that maximizing freedom, including economic freedom, offers the best chance for most people to maximize that potential and as a result maximize their individual well-being.[/quote]

You're using "freedom" in a manner to which I have objected in the past, and frankly find offensive. Your usage, in context, refers specifically to freedom from governmental influence, while the signature that provoked this thread quite clearly starts with an assumption that government is not the only threat to freedom. The difference between these two points is very much the subject of this debate, so using words like "freedom" in a way that assumes one answer makes this debate even more difficult than it needs to be.[/quote]

I'm sorry that my use of the word freedom offends you. I agree that government is not the only threat to freedom, and didn't mean to imply otherwise. My statement refers to "...maximizing freedom, including economic freedom...". I do believe that the greatest obstacle to economic freedom comes from the government. But I don't see how my using the term in this context excludes the possibility of other entities infringing on our freedom. Certainly, for example, an armed robber can infringe on my freedom as well. But I'm pretty much focusing on how the government limits our economic freedom because that's the most relevant to the points I'm trying to make.

[quote=platypus][quote=me]The more power you give government over the economy, the more you interfere with both kinds of mobility you favor.[/quote]

That's your opinion. Others have looked at the data available to them, applied their knowledge of economics and statistics, and reached a different conclusion.[/quote]

Yes. In case it's not obvious to everyone, let me state it clearly here: Everything in my posts represents my opinion.

Now that we've got that out of the way, I'd be interested in hearing the actual arguments behind these differing conclusions, as I've tried to clearly articulate my arguments in this thread.

[quote=platypus][quote=me]On the other end, government power over the economy helps the rich stay that way.  The rich buy political favors for their industries, including policies that make it hard for domestic entrepreneurs, foreign companies, and others to compete with them.[/quote]

It would seem to me that this is a phenomenon of wealth, not government. Do the rich not try to purchase influence (or instruments of influence) regardless of government type or policies? Blaming the government for something that the rich have always done since before there were governments is like blaming the police for crime, or the fire department for fires.[/quote]

The phenomenon I describe is one of the wealthy using the instrument of government to protect and enhance their position. It is a phenomenon of both wealth and government. Yes, the wealthy have always used force in this way. In the past, they used direct intimidation and force, today they by and large use the "legitimized" vehicle of government force. I think our goal should be to deprive the wealthy of any use of force to protect and enhance their position, so that they must continue to serve others well if they want to maintain their wealth.

[quote=platypus][quote=me]Yes, the boom-bust cycle would require its own thread.  Again, the idea that this is an inherent characteristic of a free economy that must be managed by government is flawed in many ways.[/quote]

Please identify those flaws, or provide an alternative that is not just as flawed. There's nothing constructive about just saying something is flawed without elaborating.[/quote]

You left off my next sentence which said: Many believe that the boom-bust is exaggerated by poor government monetary policy and economic interference.

I'm sorry if you find that statement less constructive than, for example, the statement you made just a few quotes back...

[quote=platypus]That's your opinion.  Others have looked at the data available to them, applied their knowledge of economics and statistics, and reached a different conclusion.[/quote]

Obviously we cannot go into detail down each path that is touched on in a format like this. pennDerek raised the boom/bust issue, stated his summary view and suggested that it would be good for another thread. I agreed with him that it would make a great thread and gave my summary view.

If you want to start a thread on that topic, I would be glad to participate in a substantive debate. But please don't come into a thread where I have been striving for reasoned, in-depth debate on the issues and lecture me on what is or is not constructive.

[quote=platypus][quote=me]Libertarians are often accused of being overly simplistic and seeing things as black and white.   I can see how those who have not plumbed the depth of all these arguments can feel that way.[/quote]

Liberals are often accused of being overburdened with empathy and not rational enough. I can see how those who are too lazy to think things through can feel that way. Oh, did that offend you? So sorry. Maybe we should both try not to portray all disagreement as stemming from lack of knowledge or diligence.[/quote]

No, I am not offended. And again, I'm sorry if you were. And I do not accuse liberals of a lack of rationality nor do I think anyone can be overburdened with empathy. I began my political life as a liberal, largely due to a strong empathy for others, and I have not lost any of that empathy in my long and reasoned conversion to libertarianism.

I simply meant to say that there is more to all of these issues than soundbites. Going back over this thread I think I have done a decent job of trying to flesh out the substance behind my views, although my attempts are not as complete or well-written as I wish they could be.

But please stop and think about what you did with that last quote. In the part you quoted from me, I ask that people consider the possibility that there is indeed much intellectual beef behind the views of libertarians. I stated, and I'll repeat, that anyone who has "plumbed the depths" of these arguments can not honestly refer to the libertarian view as "simplistic". I did not state that anyone who has "plumbed the depths" of these arguments should or must agree with me.

I did not, as you say, try "to portray all disagreement as stemming from lack of knowledge or diligence". I know that there are people with liberal views who have thought deeply about these things. I was there once myself. I can see that pennDerek fits this category, and I believe you probably do too. My mind is still open, and I see this site as an opportunity to engage other thoughtful, intelligent people in rational debate as a chance to persuade as well as learn. I respect everyone that posts here.

Editted to remove what may be considered a violation under the new rules...

Please note the key word "inevitable". Your statement that "there would be even less reason if the government stopped trying to 'level playing fields', etc." assumes that government attempts to level the playing field inevitably, or at least usually, backfire. You have supported that with only a couple of specific examples, the significance or interpretation of which is still in dispute. Then you use that assumption, as though it were proven, as the basis of further arguments. Surely you can see how others might ask that you base those further arguments on a firmer foundation.



I hope I'm not the only one who noticed an extra word slipping in between the first formulation and the second. The first, to which I responded, talked about outcomes; the second modified that to equal outcomes as though that is what my response had been about. It wasn't. I was talking about fair outcomes, not equal ones.



And the means by which we would counter that force would be...? Let's think about that. The wealthy used such force, successfully, before the age of activist government. You just admitted as much. Why, then, should we assume that restraining government is the solution? That doesn't seem very logical to me. It's like saying that giving up painkillers will cure the headache for which you were taking them. The agency by which we counter the power of the wealthy must be some kind of collective action (else "divide and conquer") whether you think of it as government or not.



Maybe they have. Maybe, after plumbing those depths, they decided that they'd rather aspire to heights instead. You clearly assumed otherwise, which is to say that you assumed that their disagreement stemmed from lack of exposure to the arguments that have swayed you. I don't think that's "belittling" enough to count as a rules violation (or else I would have reported) but it's a tone best avoided if the goal is to encourage dialogue.

I'll get to the rest of this later, but I have to respond to this:



The only thing I assumed is that those who refer to libertarian conclusions as "overly simplistic" or "black and white" have not been exposed to the full depth of libertarian argument. I made no assumption or statement whatsoever about why people disagree with these views. In fact I went out of my way to state that I respect the views of those whom I debate with, and consider them intelligent and thoughtful people. How anything I said could come even close to belittling or be read in a tone that discourages dialogue is beyond me.

Once again, I regret if you felt offended, belittled, or put off in any way.