Minimum Wage Law Violates the Rights of Workers

I think the best argument against a minimum wage law is that it uses the force of government to prevent an otherwise willing man performing a job for less than the minimum hourly wage.

Assume the minimum wage becomes $10.10. I want someone to clean up my yard but don’t want to pay more than 9 dollars per hour. You want to do the job for 9 dollars per hour, but the government tells you that it is illegal for you to take this job! It has become illegal in this case for you to work for pay. What right does anyone have to tell a man that he cannot work for another man for a wage mutually agreed upon? No right at all, obviously. Therefore, a minimum wage law violates the rights of workers.

It’s really worth pointing this out, even though it’s nothing but the other side of the coin that’s always pointed out by those whose hearts bleed for the poor and the downtrodden. Yes, you are restricting the ability of the bloodsucking capitalist to “exploit” labor, but that’s not all you are restricting. But then, the bleeding heart elitists usually know that the poor and the downtrodden don’t (can’t?) know what’s best for them – so “we” need to have a compliant and wise government step in on their behalf.

I’ve explained this side of the coin to the man on the street on a few occasions, and I usually get the response “I never thought about it that way.”

They Tried So Hard Didn’t They?

Obama and his brilliant economic team realized that people didn’t have enough income. So what did they come up with? “Raise the minimum wage.” Ah, another Progressive well that never runs dry.

Is it Fair?

Stephen Moore asks Is it Fair?

Great questions! Except for the last one, which posits what I believe to be a counterfactual – in fact, our grandkids aren’t going to have to “pay off” trillions in debt, regardless which President can be blamed for it. Americans only have to pay interest on the national debt. They don’t have to – and shouldn’t try to! – retire it. But 19 out of 20 isn’t bad at all!

The Liberal Enforcers by Mark Steyn

I confess to having a weakness for Mark Steyn. Although his arguments aren’t always rigorously correct or logically airtight, he makes up for it by being very funny. And he’s usually quite right, in fact.

In The Liberal Enforcers he writes, on the Susan G. Komen affair:

The American Association of University Women announced it would no longer sponsor teams for Komen’s “Race for the Cure.” Sure, Komen has raised $2 billion for the cure, but better we never cure breast cancer than let a single errant Injun wander off the abortion reservation.

Apparently so! Go ahead and read the whole thing. Viva Mark Steyn!

Libertarians and Non-interventionism

When I used to hang out with Libertarian Party members around 15 years ago, one popular marketing slogan was “Libertarians — we’re pro-choice on everything!” Obviously, “pro-choice” in this context meant that libertarians tended to opt, wherever possible and to the extent possible, for enabling maximum individual freedom of choice. Example: why make it illegal for an adult to imbibe or smoke the substance of their choice if they can be allowed to make that choice and bear the consequences of their actions? One problem with the slogan was that a sizable minority of Libertarians have consistently come out against so-called “abortion rights” and have therefore come down on the “pro-life” rather than “pro-choice” side of that particular debate.

Today’s piece in Hit and Run by Matt Welch made me wonder if a better slogan for libertarians might be: “Libertarians — we’re non-interventionist on everything!” The asterisk would have to be that the context is government intervention. Remember that establishing a government is establishing a monopoly on the use of force against people, with the hope of bringing the use of force against people under the rule of law. Government intervenes (or should intervene) only when it is appropriate to use force to solve a social problem.

Libertarians can be defined as people who believe that the initiation of force by the government should be minimized as far as possible (which for some means eliminating it altogether).

Some guy is smoking weed? Okay. Is he posing an immediate threat to anyone else, such that the initiation of force against his exercise of liberty is appropriate? Government non-intervention seems a sane course.

A restaurant is serving some very salty soup to its happy customers? Hmmm. Is the restaurant posing some kind of threat that requires the use of government force to rectify? Seems highly unlikely.

Some community has just suffered a natural disaster? Individuals should be free to help out to the extent that their charitable impulse demands. But should the government use force against those who aren’t interested in helping, to compel them to help?

Someone doesn’t have enough food, clothing or shelter? People should be free to use social means to lend a hand, in whatever way seems best to them. Does it make sense for government to intervene (in other words, to use force, since that is what government is – force)?

A brutal dictator in the Middle East is oppressing his people who strive for freedom. Here it is more difficult for individuals and non-governmental organizations to help the oppressed, given that the dictator is at least trying to preserve his monopoly on force over his geographic area, and his people are located within that region. That often leads concerned citizens of other nations to call for armed intervention on behalf of the oppressed. Classic libertarian foreign policy non-interventionism would dictate remaining aloof.

The problem for libertarians, as the last few examples might indicate, is that people have a sliding scale when it comes to their desire for interventionism. Most people seem to consider the use of force against people, in “measured quantity,” to be acceptable to solve certain problems when a speedier or more thorough solution is hard (for them) to imagine arising through peaceful, voluntary action alone.

Libertarians often, and rightfully, object that there are unforeseen consequences to intervention in all of its various forms. But there are also unforeseen consequences to non-intervention. And people have a tendency, especially when led by professional altruists in the media, to demand that their government “do something” about a problem. Because “doing nothing” or “waiting and seeing” can seem flaccid, selfish, or just plain boring.

I conclude that libertarianism isn’t more popular than it is because a majority of people are comfortable with interventionism, and, whether or not it is marketed in the way I suggested above, these people deduce that libertarianism means non-interventionism.

So as long as people remain the way they are, and as long as they reward politicians based on conformance with their preferences, Matt Welch is probably right that the next President, even if he’s nominally a non-interventionist, will in fact intervene after the media altruists beat the drum loudly and frequently enough in a particular case. But Matt shouldn’t blame the “pro-interventionist idealists” lurking in the government bureaus for this outcome. He should blame the American people and their preferences — including their revealed preference for meddling in the affairs of others when they think the circumstances warrant it.

Meanwhile, the rest of us who lean libertarian should get about the business of educating our fellow citizens on the moral and practical benefits of non-interventionism in every sphere.

Alexander Hamilton Anticipates Me by 200 Years

Damn that guy was smart.

I’ve been taking a good deal of heat over on Hit and Run lately — talking about neo-Keynesian finance and MMT —  from libertarians who are 100% sure that what they think to be true about debt and deficits is actually true, and that therefore “I am living in an obvious fantasy world.”

In a couple of posts, which I’m not going to bother to link here (you can always search Reason.com for Draco), I argued that it was completely unnecessary to ever “pay down” the US debt, and that those who stayed awake at night worried about our inability to do so were fools. I was, of course, dismissed as an utter crank. A couple of them actually went so far as to read my post about eternal deficits before pronouncing me a madman. I suppose that’s progress of a sort.

Tonight, I wandered over to Warren Mosler’s blog and found this very enlightening, and very radical, post. In it, Mosler dissects the thinking of many well meaning but ill-informed economists and public servants (like John Boehner) and answers them in ways that would only make sense to those educated in the operational realities of US deficit finance and the federal reserve system, and would seem radical or just plain crazy to everyone else. It’s very educational, and even amusing in a depressing sort of way, when coupled with the mandatory readings at http://www.moslereconomics.com.

In that post, Mosler quotes a Business Week article by David Lynch, which, in part, talks about Alexander Hamilton’s intention regarding the US debt in the early days of the Republic:

Unlike today’s debt critics, Hamilton “had no intention of paying off the outstanding principal of the debt,” historian Gordon S. Wood wrote in “Empire of Liberty: A History of the Early Republic 1789-1815.”

Instead, by making regular interest payments on the debt, Hamilton established the U.S. government as “the best credit risk in the world” and drew investors’ loyalties to the federal government and away from the states, wrote Wood, who won a Pulitzer Prize for a separate history of the colonial period.

So, founding father Alexander Hamilton never had any intention of actually paying down the principle on the US debt. Was he crazy, or crazy like a fox?

Ron Paul Says Force Doesn’t Work

Ron Paul emotes, he doesn’t do logic, and he therefore doesn’t persuade. I watched his CPAC speech via YouTube. He said, to take but one example, “Force never works.” (referring to foreign policy).

Now, I’m not a professional historian, but I am a very well read amateur historian with a specialty in military history, and I can list hundreds of examples throughout history where “force worked.”

Let’s take one that’s just mind-numbingly obvious: force destroyed the Imperial Japanese war machine and turned a fascist state that was a threat to all of Asia into a market-oriented provider of goods and services to most of the world whose people have enjoyed 65 years of peace and plenty.

So, obviously, Ron Paul is wrong about this. Could it be that he’s wrong about other things too? Like hard currency? In any case, being wrong on this one issue is enough to keep him out of the White House, since most Americans want their military to be the biggest, baddest dogs on the planet, and would prefer to be doling out the wallops rather than being on the receiving end of history.

On Banning Earphones

Steve Chapman has a piece up today at Reason.com which discusses some obscure recent efforts to regulate the wearing of headphones on or near roadways. I think Chapman’s first paragraph gets to the nub of the issue: it is annoying that more and more people (mainly young people but also people old enough to know better) insist on using earphones and listening to music, or carrying on electronic conversations of various kinds, in every kind of public venue and at all times. What’s most annoying, for me, is those who must listen to their music all day and everywhere, including times where alertness to danger would be advisable, or the possibility of old-fashioned social interaction (I believe it’s called conversation) looms large. In my view, and I know that at least some share it, it’s rude to come into a public place with earphones on: it implies that everyone else is mainly an annoyance, that you wish they weren’t there so you could just be listening to your own music and doing whatever it is that you want to do. At the very least it cuts off any chance at the simple exchange of pleasantries that mark a civilized society.

I would agree that passing new laws isn’t the right solution, but would suggest that the offending behavior be treated as a social faux pas instead. Most people would rather break laws than commit faux pas. Such mechanisms, sometimes referred to as “shaming,” used to be in wide use, but where are these mechanisms now?

If you grant that I may have a point, you may then ask where is it acceptable to listen to music through earphones, and where not? I admit it can be a tough call. Sitting in a school library study stall would seem to be OK: it’s public, but you are in a private nook which is there to cut off disturbance from those around you. But in an airport lounge? A bus stop? Walking into the Post Office? Crossing a busy street?

Can the enforcement of social norms, to the extent that they even exist at this point, solve this “problem” without need of idiotic laws? Many in the Reason.com crowd will say there is no “problem” in the first place, and maybe they’re right. But such answers will likely add to the common perception that libertarians are excessively atomistic, and that libertarianism is not consistent with a well functioning society.

How to Repeal Obamacare

I am not in favor either of piecemeal repeal of PPACA, which might improve the overall situation just enough to make it barely tolerable (thus losing the impetus to repeal the entire abomination), or of de-funding efforts that will turn out to be futile in the end.

I would suggest the following tack for the Republicans.

Call out Obama and the Democrats by publicly reminding them that Obamacare was passed in an entirely partisan way over the objections of a majority of Americans. It was rushed through, with inadequate debate, and inadequate review (“we have to pass it so the American people can find out what is in it”), and sausage-making so revolting that some of it had to be dropped entirely (“the Cornhusker Kickback”). The only bi-partisanship was in the opposition to it. It has set the nation up not only for long term fiscal disaster, but worse, for a hobbling of the last engine of advancement in medical science in the world.

“It was wrong, therefore, to pass such transformational and risky legislation in the first place. And it’s time to right that wrong by repealing it, and starting over.

If you, Mr. Obama and Mr. Reid, and your party, do not agree to repeal, you will be explicitly slapping the electorate in the face, and denying the expressed will of the American people, who changed their representation in Congress in a national electoral landslide of epic proportions largely in opposition to PPACA. You will be obstinately charging ahead with a fundamental change to our nation that the people of this nation have rejected.”

How could Mr. Obama, Mr. Reid, and their enablers in the mainstream media, effectively respond to that challenge? What convincing argument (besides: “we used our small window of total control to ram home our vision of America’s medical future – and you’ll have to get used to it”) could they make to the American people in opposition to a move to repeal?

The advantage of my approach is that it appeals to the fundamental principle of democracy (majority rule), and sets the Democrats up for a charge of massive and unforgivable hypocrisy, since they, much more than their Republican rivals, have ever brayed more loudly about “democratic values.”

Ever Growing Debt! Yes, Please!

Ever-growing debt! Sounds a like tea-party sign… a warning of what faces us if we don’t soon mend our profligate ways.

I’d like to state a startling conclusion which follows from MMT: in a growing economy (an economy that continues to add more goods and services over time), the debt will need to grow to keep pace with that economic growth in order to provide enough money to purchase those goods and services. So, if you want the economy to grow more or less continuously, the debt will need to grow more or less continuously, to infinity. It should never be paid down, and attempting to do so would be at best contractionary and at worst disastrous.

How then will our proverbial grandchildren ever pay down our debt?  They won’t, hopefully. Just as our grandparents left us a federal debt, we’ll leave an even larger one to our grandchildren. But if that debt grows in a measured and proportionate way, in a growing economy, that need not concern us.

As I stated here before: you buy the debt of someone who has a future. It’s the future growth and/or earnings that you care about when you fund someone’s debt. As long as our country has a future, as long as its economy continues to grow year after year, there should be no concern on any debtor’s part or any citizen’s part about a national debt that grows without bound – as long as that growth is measured, and commensurate with the growth in goods and services.

The main policy driver should be economic growth: do whatever it takes to allow continuous growth in the production of goods and services. (Note that I haven’t said anything about making “economic equality” a driver – that’s the egalitarian goal, and one which has been shown time and again through history to be inimical to both human freedom and advances in the standard of living. An essay for another day.) The incoming Republicans, tea-partiers and otherwise, need to understand this before they take measures that may sound good on the surface, but in fact be at best counter-productive. While we need to get the rate of debt growth under control, we don’t need to reverse it.

If you want a quick explanation of why the money supply must grow to allow growth in prosperity, you could do worse than read part 1 of a six part series by the estimable Skeptical Optimist. If you want to see a nice chart showing, historically, what has happened when we’ve tried to pay down the national debt, see part 6 in that series. If you want a quick and easy explanation of fiat currency in a laboratory economy, check out Coupon Clipper’s series at ESM’s blog, here. If you want to learn how debt growth is synonymous with money growth in a fiat currency regime, you should check out the mandatory readings section at http://www.moslereconomics.com.

For those who have neither time nor patience for those other readings, here is a brief sketch of the argument I am making:

1) In a fiat currency regime, the money supply is increased by increasing the national debt
2) In order to maximize prosperity in an economy, the money supply must grow commensurately with the growth in the supply of goods and services
3) A growing economy is good for everyone, because it results in more goods and services being available, to increase our standard of living
4) Therefore, if we wish to increase our standard of living without bound we will need to increase our national debt without bound

Yes, I know it sounds weird: but that’s because as individuals, we are not in the position of a national government which issues a fiat currency. Households should not increase their debt without bound.

To check the validity of the premises in this argument, you’ll have to do additional reading.

When will the mutually beneficial curves of increased national debt and increased economic activity come to an end? Well, hopefully never, but in the real world, something will eventually occur to bring an end to the nation and/or civilization. And then we’ll have to learn all of this all over again.

Please tell your incoming congressmen to do what they can to keep the Bush tax cuts in place for all income levels – even though that will result in a temporary increase in the national debt. But please don’t encourage them to make ill-considered attempts to balance the budget, or to pay down the debt. And please don’t blame them when they eventually see the sense in what I am saying and decide to perpetuate deficits and debt – I’m thinking that although few in Congress understand MMT or macroeconomics, they have developed a feel for what happens when you enact contractionary policy. At least I hope so.

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