So the $600 pre-refund of taxes that Bush2 put in place (which made a negligible increase in per paycheck take-home) and the SS 2% rebate by Obama (which had a similar result) were useless? No, they weren't, they were identified as having an impact on the economy, even though the money wasn't even in consumers hands when it was announced/started.
That's a straw man's argument. Reducing taxes is not even remotely close to having the same sort of economic impacts as setting a minimum wage. The first puts more control of the economy back into the hands of consuming public, while the latter makes it difficult or impossible for those who cannot bring in enough productivity to justify the wage to find a job.
Minimum wage has nothing to do with minimum ability. It sets a price floor for labor. The people who lose out are those just above the minimum wage floor who see their less skilled/experienced/tenured coworkers elevated to a higher wage while theirs remains stagnant. (This happened to me, btw, and it sowed a short period of discord in that company)
I think you've just successfully argued against yourself.
For businesses with very small margins, the costs will be transferred pretty much one for one. As the margin of the business increases, the cost will be passed on in a proportionally smaller magnitude. People are (almost) never hired because they're "cheap" but because work needs to be done to meet demand. Just as nobody hires people if their taxes go down, or fire people if taxes rise. Might it delay hiring? In some instances it makes greater efficiency more valuable, with businesses investing in machines (which are built by people) instead of people. However most of the time it's just a cost of production. If you need to make more silk shirts and the cost of silk goes up, you don't buy less silk - you buy as much as you need to meet demand.
You're making so many assumptions here, I'm not really sure where to start. I guess I'll start with the law of supply and demand. Raise a price, ceteris paribus, the demand decreases. This is visible throughout the economy, although possibly it is easiest to see when looking at the supply side of the equation. For instance, look at doctors and lawyers: these fields have artificial barriers to entry, reducing supply and increasing prices. If you want to look at the demand side, I highly suggest reading upon Thomas Sowell's work, where he very often points out that the young black male worker used to be on par with his white counterpart in terms of percentage employed. With the introduction of the minimum wage, however, young black male unemployment skyrocketed. Why? Because that people group is generally not as educated and brings in less productivity (that's not to say that young black males are inherently worse than their white counterparts, but rather that they're at a societal disadvantage and that laws like the minimum wage make that worse).
Regarding people not being hired because they're "cheap," you're only looking at half of the equation. You're right in that work needs to be done, but how the work gets done is hardly as simple as you make it sound. For example, if labor is very expensive, it becomes more advantageous for the business owner to invest in capital goods to offset the high labor costs; this generally comes at the cost of how many laborers he will hire. For example, consider a fast food business where most of the employees are burger flippers. They cost $7/hour to hire (40 hrs a week for each); 10 of them must be employed to produce 5,000,000 burgers annually, which is the business's target. Let's say that the minimum wage is raised to $12/hour, thus drastically increasing the employer's labor costs. What cost him $145,600 before will now cost him $249,600. As it turns out, an automated burger flipper, which can do all of the basic flipping that the employees did, has been developed that costs $150,000. The employer realizes that he can let 8 of his employees go and keep 2 on to run the machine and perform other small tasks that the machine cannot do. (2 employees * $12.00/hr * 40 hrs * 52 weeks) + $150,000 = $199,920. In less than a year's time, he will recoup what he would've spent otherwise, with an additional $50,000-ish left over. The capital good has increased those two employee's productive output dramatically and now that there's a surplus, the business owner can actually afford to pay them more than $12.00/hr, although if he will do that we cannot know based on this data. He may be able to keep it as profit, but I would imagine that it might not be quite that simple. (Note: When I wrote this part, I missed that you did talk briefly of capital goods. I'd like to counter briefly that the labor force that creates capital goods vs those that flip burgers are vastly different. The former is more likely to require skill and expertise, while the latter is not.)
Next, you assume that no one fires or hires (generally) based on tax increases or decreases, but this too assumes many, many things. For example, it assumes that as the as society's take-home pay is reduced, that society will continue to spend money in the exact same proportions as if it were higher. This is demonstrably false. The more surplus an individual has, the more he will tend to save and to spend on luxury items that were previously submarginal. If this individual's surplus is reduced, he will tend to reduce savings and expenditures on luxury items. You know this, because it is obvious. But what of the producers of the luxury items? Will a reduction in society's discretionary income leave the balance between "necessary" and "luxury" goods unchanged? Of course not. Luxury goods will tend to see a reduction in demand, thus a reduction in employment. Your point is clearly false.
Lastly, I will ask a question: If the cost of inputs for a certain good increases substantially, what makes you think that society will still want that good? Prices are indirectly determined by consumers, not by input prices. Just because an input's price goes up does not mean that society will be willing to spend more on the product! In your example, while you're right in that you would still aim to manufacture enough silk shirts to meet demand, you leave out the elasticity of demand that almost certainly exists for such a product: demand will almost certainly *not* be the same pre silk price increase vs post silk price increase.
Unless you own the park, you're out of luck. Sorry. There's plenty of things I don't want to see--including your comment--but I don't think I can just infringe on other people's freedoms just because I don't like something. I don't want to smell cigarette or pot smoke any more than you probably do, but I deal with it.
Unfortunately, publicly-owned land and establishments creates unique problems for private property rights. In the ideal world, where everything is privately owned, society has a real a tangible way to deal with these things. For example, even without laws and regulations about smoking in restaurants, etc (your state may not have them, but mine does), most restaurants wouldn't allow smoking throughout it (except perhaps designated areas) because society has deemed that inhaling second hand smoke is bad. If that weren't true, then a new establishment that completely bans smoking or controls it better, would have a competitive advantage over the business that allows it openly and everywhere. No such mechanism exists for publicly-owned land, so really the best that policy makers can do is to try to use good judgement in mimic'ing what they see in private society of similar markets or context. Unfortunately, the phrases "good judgement" and "policy makers" have proven to be poorly suited for the same sentence, thus making that solution far from ideal (not to mention public policy evolves oh, so, so slowly, relative the world around us).
Furthermore, I think perhaps you don't fully understand what "land of the free" means. It doesn't mean "land of where I get to do whatever I want in a 'public' space." Rather, it means the "land where I am free to pursue life as I see fit, so long as I don't impose my freedom to the detriment of someone else's freedom." It is unreasonable to expect to be able to go to the park in the nude, because most people would find that offensive; so much so, that if a group of people regularly went to the park as such, many families might stop going to that park, abandoning it for alternatives that don't feature naked participants. If we had a society where everyone was "free" to do whatever they want to do, it would be chaotic and highly unpleasant. In a completely private society, which is free from state intervention, rules still exist and, while technically you *can* do whatever you want to do, there are consequences to acting on your every whim, not entirely unlike what we have today. It is perfectly natural to forego freedom in order to cooperate with society, even in an anarchist society.
Apart from that, I agree with everything you've said.
I want that the new one exists without destroying the old one. And that they can easy. There is no need to *remove* the old from the economy and it makes no sense anyway.
That right there is the problem and anyone who understands the most basic things about economics will see right through it.
Why do people always bring up 'brick and mortar' when in fact this is not the issue? The issue is dumping prices, covert by a law from 1983 IIRC, and the current government made clear the maximum discount on books may be 25% and that this includes also shipping. So going below 75% in the 'total price' by shipping for free is not allowed. In France 'brick and mortar' book sellers do just fine, as many people in this story already pointed out. And people like to go there. Your idea they would waste time and energy is simply wrong.
Have you stopped to wonder *why* brick and mortar book stores are doing just fine in France and not anywhere else? It couldn't possibly be that the discount regulations to which you refer have delayed the closure of brick and mortar book stores in France? If the prices are more equal between a physical book store and an online one, more people will be inclined to go to the physical book store. I don't mean to argue that there isn't something "cool" about a physical book store: I like them, too. But when it comes down to it, most of society has demonstrated their preference for cheap books over expensive books + store. It's amazing to me that I have to spell this out to you. *shrug*
And why do you try to lecture on 'economy'? You seem not to get that different countries/cultures have different ideas how an Economy works or should work. We simply don't want that money rules everything
You are absolutely right. Different governments/groups of people can setup economies in different ways. Generally, though, people want an economy that is more likely to increase the standard of living, rather than decrease it. I point out economics to you because it can pretty readily tell us which sorts of policies are good for increasing the standard of living and which are bad for it. This sort of legislation is *bad* for standard of living. I will explain in detail shortly.
Yes, western countries can live with 10% or higher unemployment rates. Germanys official rate is not the true one either
Mankind has an insatiable desire for things. Until that changes, there will always be plenty of demand. When governments get involved with these sorts of "bright ideas," consumers preferences are interfered with, creating the appearance of "insufficient demand." For example, consider good X, which is inherently expensive and good Y, which is a new alternative to good X and is much cheaper, but not quite as "nice". Upon Y's arrival in the market place, the government notices that those involved in creating good X are having a real hard time making ends meet because most of their business has gone to Y. Government makes the obvious connection that it's because Y is cheaper, so it forces Y to raise its prices to be more in line with X. Because prices have not been allowed to fall as they would have if government stayed out of things, Y now has a demand shortage--and in fact, X does too because X is still splitting its demand with Y. If X were allowed to fail, Y would have had all the demand it needed and because it's much cheaper than X (when the market is allowed to determine prices), MORE people consume Y than would have consumed X because Y requires less of a sacrifice to obtain than X.
Bottom line your whole argument makes no sense either. If a book store around the corner has to close, you can assume 10 more unemployed, including the owner. The owner is likely the only one who easy gets another job. The other 5 to 9 won't find nor would they want a job at Amazon or a similar company. What would they do there? And why would a book retailer want 5 to 9 more employees just because a random book shop closed?
Your idea is: jobs are everywhere. Sorry, for a guy. who has studied literature and earns something like $2500 in a book store there simply is no job at Amazon. And if 1000 book shops close over the years you have 5000 - 10000 more unemployed
My argument makes perfect sense, but you are only looking at one side of the equation. When a business closes, it's very easy to see that 5-10 people are now out of work. What requires more insight and understanding to comprehend is that the business closed because consumers have demonstrated that they would rather spend their resources elsewhere. Take my example of X and Y above, for instance. If X is allowed to become obsolete, let's say 10,000 people lose their jobs. But Y is 50% the price of X, freeing up vastly more resources from the public to now spend money in other areas of the economy, where there will now be new, unmet demand. Labor is regarded as a relative unspecific resource, which basically means that just because Bob worked for a book store doesn't mean Bob's only employment opportunity is in a book store. Bob can learn things, Bob has other skills, Bob will do okay. Yes, it may be inconvenient for Bob (I have been in Bob's shoes a few times, myself). But this is *how* we advance the economy. If we disallow these shifts in preferences, society is, by definition, worse off.
The problem with your point of view is: you only see the goods. The market exchanging goods for other goods or money between anonymous entities. You simply neglect that behind all this are people. A market should be orchestrated in a way that the maximum amount of people is involved in it. Not in a way that a privileged few get the most amount of goods for the least amount of money.
I do not neglect that there are individuals in the economy. You neglect the fact that for every shift in the economy, there is also a shift in demand for jobs. Labor is considered one of the scarcest of all resources; it is just a matter of allowing a market economy to allocate that labor as it sees fit. It's not a perfect process; there are growing pains and occasional discomfort. But it does work, and in fact, it works better than any other economic system known to man. A market orchestrated how I've described it allows the "maximum amount of people" to be involved in it. A market how you've described it promotes unemployment and laziness. Also, for the record, the US economy is a piece of shit precisely because we have abandoned these ideas, so please don't try to draw comparisons to modern-day US.
If we did things your way, we would essentially freeze our standard of living as it is now, disallowing progress while the world's population continues to grow. Because we would not be able to switch to more efficient goods and services, our agricultural production will not keep up (in other words, we would experience not a constant standard of living, but a downward sloping standard of living), and millions or billions will starve to death. All because you have the ideology that things should stay how they are and because you lack the understanding of scarcity and what it means. OK, that's harsh. You don't have that sort of power, so thankfully, we probably won't all revert to barbarism.
I think perhaps you have lost sight of the point of a market economy. His post is not ideology, it is rooted in economics; yours is not. To refresh you: a market economy is about fulfilling the wants and desires of consumers. Scarce resources are allocated via prices, which are ultimately established by the preferences of consumers (demonstrated by their actions in the market economy).
The consuming public has demonstrated that they do not want brick and mortar book stores. They would much rather buy books cheaper online than spend the time and energy to go to a physical store, where they generally are charged a premium. You are in fact pushing your own ideology when you say that the consuming public is effectively wrong and France should continue with a completely pointless waste of time and energy. France is deliberately preventing their consuming public from achieving what they want. They are, in fact, lowering the standard of living of their own citizens.
As for France's future: Do you really think these sorts of government interventions have no long-term consequences? This is one example of many of France destroying their market economy. They've hovered at a 10% unemployment rate for a very long time now. The LOWEST it's been has been 7.2% since 1996. Do you really think an economy can maintain itself (let alone grow) if 10% of the individuals in it don't contribute? Or what about all of the other areas where their government disrupts economic progress, like the one we're discussing right now? What France is doing is akin to trying to save the horse and buggy market back at the turn of the 19th century. Sure, intervention can keep some jobs alive now, but at what cost? Economics is about trade offs; you cannot have your cake and eat it to.
Once again, this conversation about cartels is a tangent from the original point. But I will humor you.
1. This is not specific to cartels. This is very typical of market leaders, with or without a formal cartel agreement. It is an excellent example as to why the government should not be involved in markets.
2. This is just silliness. When prices go up, demand goes down (in varying degrees, depending on the elasticity of demand). Furthermore, input prices do not determine output prices. If a cartel wants to increase prices, all it has to do is agree to raise its prices. It's absolutely ridiculous to suggest that they need to increase their input costs to raise their prices. In fact, intentionally increasing input costs to increase prices is about the stupidest thing I've ever heard. You do not make more money by charging people more unless demand is very inelastic. You make more money by charging people LESS (and you charge people less by reducing input prices), so as to increase DEMAND. A far more likely scenario in a hampered market is that a group of businesses (not necessarily even a cartel) will lobby for special privileges and try to keep out competition. The more hampered the market is, the more likely this will happen; clearly then, the solution is to unhamper the markets.
3. That's fraud and hardly unique to cartels. Fraud has its own consequences. Like cartelization, there may be short term gains to be had by committing fraud, but in the long term, it tends to catch up with the perpetrator.
But to reiterate, none of this has *anything* to do my original claim, which is that it makes perfectly good business sense to enter a market with a vastly cheaper product offering than the current alternative. Depending on the specific market in question, there may be regulatory issues, as you've so astutely pointed out. Once again, the clear solution is to remove those regulations and to return to a free market and ideally take the power away from government to interfere with markets. But one step at a time.