"Free Trade" vs. "Fair Trade" vs. "MORE DYNAMIC Trade" (3rd alternative?)
Annually increasing wage base by one percent more than inflation rate will put more money in hands of shoppers which will . . .
In practical terms the phrase "annually increasing wage base by one percent" is gibberish if it means someone is supposed to make that happen, with some kind of smoke and computers. However it might be done, like forcing all employers to increase the wage level by some percentage, it would cause massive inflation, driving up the inflation rate each year, so that soon it will increase to 5 and 10 and 15 percent and higher, and will wreck the economy.
It will drive many companies out of business who cannot afford such high labor cost. All small companies dependent on cheap labor will have to shut down, unless they're somehow exempted.
. . . will put more money in hands of shoppers which will turn over . . .
I.e., all shoppers who are wage-earners (assuming all employers comply, which they won't, because it will be impossible to enforce this for ALL wage-earners). And of course it won't put money into the hands of any shoppers other than wage-earners.
The first result will be to drive up prices. As sellers see the higher demand, they will increase their prices. Meanwhile, all non-wage-earners will experience a cut in their spending power, so all independent contractors and other non-wage-earners will get a real income decrease. And employers will not be able to hire the needed new workers to handle the new demand, because of the new higher labor cost.
. . . money in the hands of shoppers which will turn over many more times than . . .
No, money won't "turn over" any faster than before, now that the prices are so much higher. Those consumers who were not wage-earners will reduce their spending, and those who benefit from the higher wages will be deterred from increasing their spending when they notice the higher prices they must now pay. Those on fixed incomes will spend less and less, with the higher prices.
. . . will turn over many more times than the amount of money lost by businesses increasing wages.
You don't know how "many more times" it turns over. Probably none at all. Taking it from the beginning, the very first result is a sharp increase in prices, at the moment any higher demand is noticed. And that itself immediately will drive the demand back down to about where it was before, with the extra money being able to buy (at the new higher prices) the same production as before, as the new prices will level out a bit higher than before. There's no reason to expect any increase in the turnover from before, as the new real incomes of the consumers has not changed from what it was before -- i.e., some consumers will have more spending power than before, but others will have less, and with the higher prices, the predictable result would be no net change in the turnover, as the total new spending of consumers overall will be about the same as before.
It will also motivate other businesses to increase wages further putting . . .
"other" than which ones? All of them had to increase wages by the prescribed percentage. Their new labor cost is already higher than the optimum level they had paid earlier, so what possible new motivation is there to increase wages even higher so they lose even more profit? There's no increase in demand, after an initial spurt, to cause producers to expand. Expansion takes time -- weeks, months, years, while the initial demand spurt happens on the first payday. No employer would increase wages unless there is some extra profit to be gained from it, and in this scenario there's no extra profit to gain and thus no extra incentive to them to increase wages, other than the mandated percentage increase.
. . . to increase wages further putting more money into the market while incentivizing upward mobility among workers.
No, there would be no incentivizing in this, nor any "upward mobility" other than a kind of reward for doing nothing. Perhaps there would be advancement of some workers, the luckier ones who derive the greatest benefit, but it would be rewarding them without them doing anything to earn it. And this limited benefit would be at the expense of other workers who would be made worse off by the higher prices, which would outpace their income gain.
The only way to make society better by rewarding someone is if this reward is gained through better performance by them, so that they are rewarded for an improvement they caused by their performance. This is what we mostly have now, where the better workers are in higher demand and so have to be paid more than the less competitive workers.
So the only "upward mobility among workers" by just driving up the general wage level would be to reward some workers, who gain a benefit, but at the expense of others whose living standard would be driven downward as a result of the higher prices and lower real income. Without the artificially-higher labor cost, some workers would still improve anyway and enjoy the benefit of their competitive advantage, with higher income which rewards them, whereas by driving up cost artificially you cause them to lose this benefit when the higher prices would offset their higher income. With automatic across-the-board wage increase to everyone, they no longer are rewarded individually for their unique superior performance, as they are if it's only the market supply-and-demand which rewards them.
Stirring the pot adds energy.
Or you could say "Adding energy stirs the pot," which is just as nutty and meaningless.
The whole idea of the above is to make markets more dynamic which is . . .
There is no need to "make markets more dynamic" than they'd be if they're just left alone. This is similar to the "economic growth" obsession which imagines there is a need to "goose" the economy, or give it a kick in the butt, because it's too "sluggish" and needs a "jump start" so it will go faster. All these notions are delusional.
Why do we need an ongoing 2% inflation rate?
The current Fed philosophy is that the economy needs some ongoing "stimulus" to make it more "dynamic" so it will move faster or be more active, and so an annual inflation rate of 2% is imagined as a necessary "kick" delivered regularly, like prodding cattle to move faster, sort of a "get along little doggie" policy toward business and the economy, because without this prodding it just moves too slow. This is false, and yet a modest 2% annual kick in the butt probably isn't much harm. It adds a little more "energy to stir the pot" somewhat.
But to drive up inflation by "annually increasing wage base by one percent more than inflation rate" would "stir up the pot" so much that the annual inflation would keep increasing every year, rather than staying at 2% (or 3% or 5%), so it would become an always-increasing rate, to 10 and 20 and 30 and eventually to 100 and -- the sky's the limit. This would be a mandated always-increasing inflation rate to an insane level. And for what? Just to create more energy?
Do we really need to GOOSE the economy?
Only a little? Why any at all?
Goosing the economy with high inflation is exactly the wrong prescription, and would be a disaster. It would take the current mistaken 2% annual inflation rate target and drive it to infinity, or until the economy just explodes. And the destructive blow-up of the economy would come long before the annual inflation rate reached 100%. It would destroy everything which has built the U.S. and the global economy up to this point, which is gradual improvement based on more science and technology, on improved efficiency, cost-saving, and more education.
The progress so far is not based on the need for more dynamism and energy-consumption per se, but on improving the production to meet the needs of consumers, to better satisfy the market demand. Satisfying the demand does not mean increasing the speed faster and faster, driving consumption and spending faster and faster just for the sake of more spending and consuming, to an ever faster pace.
Whatever is wrong with today's economy, Fed, budget, etc., it's not that the inflation rate is too low and needs to shoot up into the stratosphere.
It's really possible, and probably preferable today, to achieve the progress while actually SLOWING DOWN the pace of energy consumption, and even slowing down the "turnover" or the rate of spending and total consumption. There are needs and wants satisfied without necessarily driving up the pace of spending and consuming and energy-dissipating. Such faster and faster spending and burning calories is not the real definition of progress in the economy. Rather, today there is a need for a slowing-down mode, in some of the consumption, while at the same time achieving more progress, SMART progress, through more efficiency and better use of resources. In place of just forced increasing consumption and energy dissipation.
LET the economy grow -- Don't FORCE it up artificially.
Sometimes even
negative "growth" is preferable. It's best to LET it happen, according to the choices of buyers and sellers, without prodding from those in power pretending to know how fast or slow the "cattle" should move.
What we need to do with trade is to LET IT HAPPEN rather than to FORCE it to happen, or push it faster and faster. There's no need for a faster turnover, so that the wages and prices must continually rise at a faster pace, in order to keep everything moving faster and faster. This is part of the SNAKE-OIL ECONOMICS thinking which imagines that the players have to be prodded to buy and sell at an ever-increasing pace, just for the sake of the increased activity, the increased burning of calories -- faster faster, busier busier, go go go go, more more more.
Even the current economic philosophy of a steady 2% inflation rate is a fallacy for the same reason, which incorporates partly the Snake-Oil Economics of faster "growth" and more activity and more burning of calories, to make everything move faster, because otherwise the economy is "sluggish" and needs a periodical "jump-start" to get it back up to speed. All this is delusional, even now at the modest 2% target inflation rate.
Rather, it would be better to just LET the economy grow, naturally, not with artificial stimulation, and let the buyers and sellers do things efficiently, cutting cost wherever they can, and sometimes even SLOWING DOWN the pace, because much of the demand can be met with even LESS total activity, less busy-busy-busy go-go push-push faster-faster dynamism. It's not this energy dissipation and busy-ness per se which constitutes the genuine "growth" or progress of the economy. Rather, it's the genuine satisfying demand, meeting the needs, doing the achievements, doing it all better, which can mean doing it at lower cost and less depletion of resources, and less burning of calories.
Today especially there is a
need to slow down the pace, reduce the energy, for long-term health, while at the same time finding ways to get the real needs and wants met, and even doing this better while still slowing down the energy level, which some of the improved technology makes possible. This means letting business find ways to reduce its costs, reduce some of the activity, find better methods which can be slower than before, while real progress advances even at the slower energy pace.
. . . to make markets more dynamic which is different from both fair and free trade.
Yes, it's worse than both. The "more dynamic" prescription to burn more calories and drive everything faster and faster just for the sake of dynamic energy-dissipation per se is a perverse idea worse than the anti-competition "fair trade" economics. The need is to make the business activity, the buying and selling, take place more efficiently, at lower cost and improved performance. Not to make everything happen faster and faster just for the sake of the increased activity per se.
FAIR TRADE vs. FREE TRADE vs. MORE DYNAMIC TRADE
So the difference between the 3 philosophies is:
More Dynamic Trade -- increase the pace, drive business faster and faster, always increasing the turnover rate, increased hustle-bustle busy-busy-busy burning more calories for the sake of the dynamic activity per se as an end in itself
Fair Trade -- mitigate the bad feelings of those who are less competitive, by reducing the competition, making everyone more equal, so those who perform worse are not penalized, but instead we feel sorry for them and try to make everyone equal and no one is seen as superior to another
Free Trade -- Let the producers improve their efficiency by rewarding them for better performance, let all the players benefit more and more as they improve their performance, including cost-cutting and reduced energy-dissipation as a result of the improved efficiency, and rewarding the better performers for their superior performance
And of these three, free trade produces the best results, or the greatest good for the greatest number. Even the inferior performers are better off long-term as a result of the system which encourages all players to keep improving, though giving less benefit to the inferior players, even though all are better off as a result of a system which rewards the superior performers. That the higher benefits are distributed
UNequally is a small price to pay for the total higher benefit to all which results from a competitive system.
But the idea points to why a free market with minimums is the worst-case market scenario.
What "minimums"? What are these free-market "minimums" or less of something? The supposed benefits of a "more dynamic" economy prescribed here are:
It "adds energy" and will "increase wages causing upward mobility" and make it so "money will turn over many more times" -- How is this a better-case "market scenario"?
1. more energy expended
2. higher wages - upward mobility
3. faster money turnover
These are the increases we get with the "more dynamic" alternative, as opposed to the free market "minimums" which give us less of this "energy" and "higher wages/upward mobility" and money turnover.
What does
#2 above mean --
"higher wages - upward mobility"? Superficially it sounds like something good, but what's the real meaning? It's an obsession on a certain segment of the economy, wage-earners, which is singled out as needing the artificial input, while another sector, the employer class, is scapegoated as the source which is to provide the subsidy input to prop up the wage-earner class, at regular intervals, annually.
Imposing this annual cost onto all employers must have the impact of depressing this sector, thus resulting in fewer employers, and those remaining will reduce their labor force as needed to minimize the higher cost. What is the reason to reward one entire class, as an automatic reward without individuals earning it, while punishing another, and thus interfering with the market supply-and-demand and with the competition needed to make business function more efficiently? The only rationale seems to be the popularity points scored by pandering to such a large class, all the wage-earners, winning their applause by giving them some benefit while taking a swipe at the hated employers who are an easy scapegoat target. Other than this, there seems to be no benefit to society generally.
Meanwhile
#1 and #3 above, the more
"energy" and money turnover, are about the same, translating into ever faster and faster pace for transactions, demanding that all the trading must happen faster and faster, higher speed, ever-increasing consumption and energy-dissipation. This definitely would mean increased employment, lower unemployment rate, continually driving the "jobs! jobs! jobs! jobs! jobs! jobs!" hysteria to ever-higher levels of insanity. It loses all sight of any understanding of what jobs are for, or what they're supposed to accomplish in getting needed work done, and instead just worships "jobs" for their own sake, and "factories! factories! factories!" to the maximum, so that the country eventually would be nothing but wall-to-wall factories from coast to coast.
Who cares what the factories produce, or whether we need all that excess manufacturing? --
it's the factories, Stupid! is all that matters -- You could just dump all the products into the ocean, or send them off into a BLACK HOLE somewhere, to be consumed, to get them out of our hair to make room for still more production! production! production! manufacturing! for the sake of manufacturing, just for the activity of the workers burning calories and dissipating more and more energy at an ever-increasing rate. With no regard to whether something needed is being produced, or whether so much extra energy is a price worth paying. The premise is that burning extra energy is not an extra cost, because the energy dissipation per se is the good being accomplished, not anything being produced by the energy.
That's all the increased "energy" and the "money will turn over many more times" rhetoric means. Just more and more and faster and faster to higher and higher levels of consumption per se, total obsession on burning the calories as the absolute good, and there's no limit to how much more to consume and the more energy to burn, as this consuming and burning energy is the end in itself, desired to an extreme degree no matter how great it increases.
Fair market isn't much better since 'fair' is always up in the air as a marker leading to changes of emphasis in market strategies [which] takes energy from the market.
The key phrase here is "takes energy from" or reduces the energy, which is bad, because more energy dissipation is intrinsically better than less. Whatever drives up the energy consumption is always good, no matter what; and whatever reduces the energy consumption is automatically a net loss, because any additional burning of energy is the ultimate end, no matter what it's being burned for. There's no "waste" of energy in the "more dynamic" economy, because the burning of it is the only good, for its own sake, regardless how that energy is put to use, or even if nothing is produced by it.
The best way is to find ways to boost available capital for capture which is what the relation I provide supplies. What I suggest isn't 'fair' to the conservative owner nor is it 'free' since it mandates a market driver for one of the sides in the market.
The key phrases here are "
find ways to boost" and
"market driver" (drive where? -- doesn't matter!) -- The goal is always faster and faster, increase, rev-it-up, higher and higher, busier and busier, more and more consumption without limit, more hustle-bustle for its own sake, more huff-n-puff driving the economy to ever-higher levels of pure output, not for benefit, but just for the sake of the higher production as an outlet for the increased energy dissipation, which needs an escape hatch through which to flow, so room is made for still more and more energy, more output to be exhausted, an ever-expanding VOLCANO of explosiveness for the sake of the exploding POWER per se as something of beauty, to be increased without limit.
Other things like bringing labor from depressed economies into shrinking population economics increases upward wage freedom to the . . .
Free trade, or free market, already provides all the incentive necessary for labor to migrate from where the demand is less to other places where the demand is greater. This is why there should be unlimited commerce and traffic across borders, as free trade demands, so that those who can meet the need are able to go there to satisfy it. Whereas "fair trade" and protectionism and xenophobia restrict migration and prevent those who are needed from traveling to where they're needed.
But if "upward wage freedom" simply means forcing the whole wage level up, to all wage-earners, not due to competition and improved performance by them individually, then this artificial wage increase is something others have to pay for. When anything is artificially driven upward, something else has to be driven downward to pay for it, which means employers and consumers are driven DOWNWARD, so there is no net upward lift to all, to the whole society. Rather, some are artificially boosted upward at the expense of others who are driven downward.
. . . increases upward wage freedom to the depressed economy and supplies a labor boon for existing economies . . .
"boon"? But for whom? At whose expense? and to meet what need?
What an artificial propping-up of wages creates is a labor GLUT, as the higher wages draw more people into the labor market, offering their labor for the attractive high-paying jobs, thus increasing the OVERSUPPLY OF LABOR in that market. What is served by this "boon"? i.e., this oversupply of labor?
. . . labor boon for existing economics easing pressure for excessive competition for labor.
With the artificially-higher wage level, the competition BETWEEN job-seekers increases, as more of them come seeking those higher-paying jobs, while competition FOR labor decreases, as employers have so many job applicants that they wish some other employer would step in to take some of them away. If you want job-seekers to become a pain in the butt, then yes, force up the wage level to attract more and more of them, and drive away the employers who would hire them. But why do you want to make job-seekers into such an evil everyone wishes would go away? turning them into beggars? an eyesore? cluttering up the corridors and streets and offices, pestering the ever-shrinking employer class trying to escape the onslaught?
The key is not to stabilize but to introduce new dynamics into economies.
The key phrase is "new dynamics" -- faster and faster, more consumption, more energy dissipation, accelerate, speed up, drive the economy more and more, push-push, whip it along, Hya! Hya! Rawhide Economics! "Get them cattle movin'!"
How else can the economy handle the ever-increasing glut of wage-earners, unless it's whipped up faster faster faster with more "jobs! jobs! jobs! jobs! jobs! jobs! jobs! jobs! jobs!" to absorb the ever-increasing glut we create with the "fair trade" economy rewarding more and more the wage-earners and punishing and discouraging the employers who could absorb some of them?
It's obvious that "fair trade" is slowly replacing "free trade" as the new economy to bash employers and try to give rewards more and more to the underdog wage-earners, cheering them on as the victims to be coddled and pitied and pandered to and shielded from having to compete or improve, being instead automatically entitled to "the American Dream" (or the "British Dream" etc.) because they're all such downtrodden heroes for standing up against the dirty capitalist pigs!
