I have lately been thinking that the "free marketeers" are every bit as bereft of reality as their communist nemeses ever were and in exactly the same way: the theoretical structures of both equally ignore the impact of the same all important aspect of human nature -- greed. The communists never appreciated the need for greed (how self-interest motivates efficiency and innovation). The free marketeers never understand the need to rein in greed with an adequate system of checks and balances (which hasn't occurred naturally -- that is without state intervention -- since the beginning of industrialization). The belief that the …
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ddrew2u
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I should have finished up above -- given the topic concerned the whole world -- by saying that once American opinion finally accepts the idea that the free market is only the (truly remarkable) OS (operating system) and that the industrial default program has always been the "race to the bottom" since the beginning of the industrial age -- without heavy legislative intervention (most importantly via fairly balancing the labor market as well as via transfers) -- then, the issue will be pretty much resolved world-wide (there being nobody significant left espousing out-of-control market forces).
Posted to The New Road to Serfdom
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Since Adam Smith's "perfect competition world" of small entrepreneurs and skilled artisans was replaced by the industrial world the simple (if catastrophic) problem for (100 times more productive) interchangeable workers has been the RACE TO THE BOTTOM. The simple solution now practiced all over the better paying world is SECTOR-WIDE labor agreements (or some equivalent). This is not ideology. This is merely mechanical. It is that simple.
Posted to The New Road to Serfdom
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whattheheck, Hate to break it to you (German car fan) but German workers have the most powerful union setup in the world: mandatory, sector wide labor agreements: everybody doing the same job in the same locale must by law work under the same labor contract even though they work for different employers. I am not knocking industrialization -- just recognizing the (easily remedied -- did someone say sector-wide bargaining?) difference in the labor negotiating power between Adam's era and the industrial era: the catastrophic race to the wage and benefit bottom. Today, I had the bright idea that if Adam Smith …
Posted to The New Road to Serfdom
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Here is an "advertising approach" that could quickly get the ideas in this article across to the American public: 25% of the American workforce earns less than the MONETARY minimum wage of modern European countries (not counting Portugal, Malta, etc.). That doesn't count the benefits a European minimum wager gets: 4 weeks PAID vacation, 10-12 PAID holidays, 3 months of PAID maternity leave, a year of PAID sick leave, severance pay (from McDonalds!) -- oh, and don't forget PAID health care. The total must add up to more like 35% or even 40% of American workers earning less than minimum wage …
Posted to What Vacation Days?
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Whattheheck, Taking Europe's $9.50/hr minimum wage as an example -- the American version of that could be a $12.50/hr minimum wage, w/o the 4 weeks vacation, paid holidays, etc.; but with health care. Americans would probably rather have the money; Americans would probably work on their vacation anyway. Point is, total comp here stinks because we don't know enough (culturally, common knowledgewise) to protect labor in the free market -- we lack an inbuilt understanding of the need for checks and balances (read unions) -- what amounts to super complacent labor. A $12.50/hr minimum wage would add all of 4%, one …
Posted to What Vacation Days?
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Whattheheck, The $4.50 1939 figure was adjusted for inflation. We don't have a balance of power in the labor market in this country because Americans have no idea how much better they could be doing. See my post above (first one) on how to alert folks to how much trouble they are in. Then, all you have to do is change the labor laws and we are back on top. No big struggle -- except to get everyone on the same page. I'd blame management more than the labor unions for the low quality cars we used to make -- they …
Posted to What Vacation Days?
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whattheheck, If the USA were properly unionized there would be as many labor lobbyists in DC as there are business lobbyists -- but labor would have the trump card: the vast majority of voters. A lot of stuff that happens in Washington now happens because there is nobody there minding the store for us. No matter what you say about people here being aware they are hurting there is no cultural-common knowledge sense of labor needing to be very powerful to protect itself with management -- the type of feeling that would exist even if times were very good -- a …
Posted to What Vacation Days?
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Economics is about scarcity, choice -- and muscle -- which for labor means unions. Unions are much more critical to labor's wellbeing than any government intervention in free markets -- which intervention wont take place anyway in a mostly unionless economy like the USA's has become. You could almost say that unions are the market (as in libertarian) answer to economic inequality -- as far as that goes which is about half way. In 50 years the Chinese will be living as well as Americans today -- to be more precise Chinese output per person will match America's today. If the …
Posted to What We Learn When We Learn Economics
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Iraqis owe America big for 2 favors: 1) relieving them of the Saddam family; 2) tamping down the _inevitable_ follow-on conflict between Sunnis and Shiites. Would it have been better for Iraqis to wait 30 more years to get rid of Saddam's sons by themselves and then suffer a 10 times worse civil war? -- 10 times worse because no foreign army would be around to keep some kind of lid on while a peaceful shakeout could be at least attempted. The Democrats have a political problem critizing Bush's abysmal handling of the aftermath. Anytime I hear Democrats complain about the …
Posted to How Do You Define Security?
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