No, "free choice" in the market does not mean freedom to kill your customer, and other such nonsense.
#171
Togo
Consider two bakeries. The first is the price-efficient bakery. It produces the most popular type of bread at the very lowest price it can. Its staff aren't very well trained - they don't know much about bread because they don't need to, and they're often tired and sick. They work while sick, unless they literally can't stand, because they're on a zero-hours contract and only get paid for the hours they work.
The second is an actual bakery. There you'll see a vast array of different types of bread, at an impressive variation of prices. What we're seeing is a business producing a range of products that compete with each other. The staff are alert, helpful, and well-motivated. Obviously all this costs, and the most popular types of bread are 10% more expensive than at the efficiency store.
Why do you suppose that the second type of bakery is more common, attracts more business, and makes more money? Could it be customers select on something other than price?
In both cases it is supply-and-demand alone which is setting the prices. You haven't named any factor at work that is not a part of the supply-and-demand factors setting the prices of the bread in each case.
In that case there is a basic logical flaw in your argument.
You previously argued that because the market worked by supply and demand, wages should always fall to the lowest level necessary to produce the product. But here you are arguing that supply and demand does not always reduce prices to the lowest level. So which is it?
Wages (and all other costs) should always fall to the lowest level necessary to produce the product. I.e., the same quality product.
Given the same quality, the LOWEST price is always the right one. Supply-and-demand always reduces the price to the lowest level to produce that same product, i.e., product of the same quality.
It also INCREASES the quality of the product to the highest level at the same price. Given the same price, supply-and-demand always increases the quality to the highest level possible at that same given price level.
Yes, you can try and claim that everything that ever effects the market is somehow an aspect of supply and demand, but then you can't go on to to claim anything based on that. All you've done is re-labelled 'everything' as supply and demand, so a claim based on that is meaningless.
If I said "everything in the universe is supply-and-demand" then yes, such a claim would be meaningless, just as the claim of Thales that "everything is water" was meaningless. And I should be taken out and shot for saying such a thing.
I don't remember saying that, but I'll take your word for it that I did and I will do penance for it and go dip myself in the River Jordan to purify me of such a sin.
But meanwhile, in your example of the two bakeries, the reason the one bakery did better is that it performed better at meeting the consumer demand, which means it had the power to raise its price. That follows the principle of "supply-and-demand," i.e., higher demand = higher value/price, because more customers patronized that bakery and thus pushed up its prices.
Or you can keep to a narrow definition of supply and demand, in which case it becomes valid to make claims based off it, but the argument still fails, this time on the facts, because prices aren't, in practice, based on supply and demand.
In practice prices are generally based on supply and demand. You haven't given an example where they're not.
Perhaps there is a rare example where they're not. But you haven't given one. In general, the price of something goes up if the demand for it goes up or the supply of it goes down. Or its price goes down if the demand for it goes down or the supply of it goes up.
Name a case where this is not so.
Our main issue here is why this should not be the case for wages. Why shouldn't the price for labor go down if the supply-demand value of that labor goes down? Why shouldn't it go down as far as necessary, even to $1 per hour or less, if its value goes down that much? This is the question you are not answering.
Either your claim is meaningless, or it's wrong.
Again, yes any claim I made that "everything in the universe is supply-and-demand" is meaningless. That's not my claim now, even if I did mistakenly say that before. What I'm saying is that prices in the market are generally set by supply-and-demand. A loaf of bread, a TV, a box of Cackerjax, etc. The government does not interfere to prevent these prices from going down if the value goes down. There is no minimum price law for anything other than for labor.
I don't absolutely exclude the possibility that there might be something, in a rare case, where supply-and-demand is over-ruled by the government or other force. But it's not the norm -- generally the prices are set by supply-and-demand. Give an example where they are not.
You might give an example where supply-and-demand partly rules, but some other force comes into play also. If it's something like a tobacco tax, I think that should be set aside as something similar to "externalities" where a harmful effect on society leads to a "sin" tax or other penalty to compensate for the damage to people other than the buyers and sellers.
Such a modification to "supply-and-demand" does not change the fact that supply-and-demand is the general rule and generally sets all the prices.
What else is taken into account for setting prices than the principle of supply-and-demand?
Well, just off the top of my head, brand, firm image, market segmentation, lifestyle affiliation, Ease of acquisition/ease of use, additional features, associative buying, variety/standardisation, regulatory factors, tax implications, familiarity, market sentiment, and so on.
Every one of those is a part of supply-and-demand.
Great, so a regulation setting a minimum wage is supply and demand?
No, none of the items mentioned above is a setting of a price on anything. In none of those is government mandating that a particular price or minimum price be set on anything.
The points listed above are factors which might impact on the supply-and-demand factors, but none of them is mandating a particular price. They're still letting supply-and-demand set the price, but might be adding an element which shifts the supply-and-demand price up or down. They are not an attempt to overrule the supply-and-demand price as minimum wage does.
Again, there's nothing stopping you calling everything that affects price as supply and demand, simply because it affects price. But that's a circular argument.
Maybe you're right that there is something affecting price that is not part of supply-and-demand. I'd say it must be very rare. It's not the norm. It's not how the prices are set for a loaf of bread or a TV and so on.
I've made the allowance for government rules that shift prices usually upward, some for legitimate reasons and others maybe not. Just because the state does something that has this impact on some prices does not change the basic fact that prices are set basically by supply-and-demand. Such regulations may be considered as part of the whole process of supply, by increasing the cost of production.
So give us an example of something affecting the prices, other than government regulations, some of which are good and others not, and most of which are well-intended. A regulation mandating a particular price is not a legitimate case. There are virtually no such regulations, and the few that may exist are almost certainly bad for the economy.
We could quibble about a few minor examples, like rent control, which is bad if it's a large amount, but probably harmless if the amount or percent is small. I suggest we not go into such examples as that.
Give us a real significant example, probably not of state intervention into the economy, where there is a normal process of prices being set by something that is not a part of the supply-and-demand dynamic at work and performing its role of increasing the prices when the demand goes up or supply goes down, or of decreasing the prices when the demand goes down or supply goes up.
You have not yet given us an example of this.
Supply and demand defined that way can not support the claims you are making of it.
"defined" what way?
definition: "supply-and-demand" is whatever it is that makes price go up when the supply goes down or the demand goes up, and which makes price go down when the supply goes up or the demand goes down.
My claim is supported by this definition because it is falsifiable, or rather, there could be cases where the prices do not follow this rule: Show cases where the supply goes up or demand goes down and yet price goes up, or show cases where the supply goes down or demand goes up and yet price goes down. All other factors being constant.
I'm not absolutely ruling out any possibility of prices going the opposite direction that supply-and-demand dictates. I'm suggesting it's not the norm. And probably something is wrong if it happens. I.e., if the demand goes up or supply goes down, then the price
SHOULD go up, and if it doesn't, I suggest something is wrong somewhere.
If there are cases where the price goes in the "wrong" direction, then let's look at those cases. Let's evaluate what happened and judge whether something interfered with the pricing system that should not have interfered.
But first you have to give us an example, which you have yet to do.
Maybe this would be an example: a syndicate moves into town and forces a company to increase its prices and pay the Mob a percentage, and then it goes around to everyone in the town and FORCES everyone to keep buying the product at the higher price, and even to increase their purchases of the product.
I'm not sure it's ever happened -- probably there have been such distortions of the market in some cases, though maybe not as blatant. Anyway, that would be a case where the price increased without any decrease in supply or increase in real demand (i.e., the increased "demand" is really artificial and not genuine consumer "demand" for the product, which decreases because of the higher price, and true "demand" has to be defined in terms of what consumers want and how much they will pay if they are not forced against their will).
So it is not true that "supply-and-demand" is defined as anything at all that makes prices go one way or the other. Some factors could come into play to drive price up or down but which are not a part of basic supply-and-demand. I'm claiming any such factors are not the norm and would probably be something negative or bad for the economy.
And government regulations per se are not a distortion, as long as they are not an attempt to blatantly fix a price for something, like minimum wage law does. That kind of law is a blatant interference with supply-and-demand and harms the economy. But a law that aims to produce a necessary benefit for everyone, such as environmental regulations, is not an interference with supply-and-demand, because it only adds in a cost that was otherwise being ignored by the market.
If that's all you mean, then you have not proved that we are "hurt" by being allowed to make choices.
Perhaps in some cases a wider range of choices can mean higher prices.
But the wider range of choices is what the consumers want, in that case, and they are willing to pay the higher prices in return for that extra choice.
So they can't choose to have a minimum wage?
No more than they can mandate that the employer must attend Church on Sunday. "Consumer choice" properly refers to choice for a product and what price to pay for it. You can try to brainwash consumers and implant "demands" in them for all sorts of things, including that the company managers or investors etc. be rounded up and herded into cattle cars and reprogrammed or have their genes changed to make them become less "greedy" or whatever.
In that sense perhaps consumers might "choose" to "demand" something other than better quality of the product or lower price. But it's only the better quality and lower price that consumers really want. Anything other than this is implanted into their brains by deceptive or fraudulent claims and propaganda.
They object to minimum wage because it denies employers and employees freedom to choose the wage level.
They support all free choice, including the choice to buy something more expensive.
Do they support the freedom to set hygiene levels? What about the freedom to sell counterfeit goods, or buy with counterfeit currency? Do they support the freedom to ignore safety standards, mug people in the street, or enslave others?
They support all freedoms, or free choice, for anything that does not infringe on someone else's free choice or constitute an act of violence or deprivation toward those other than the buyer and seller.
None of the examples I gave involve violence or deprivation to anyone other than the buyer or seller.
Who is denying anyone free choice for any of the above? What does this have to do with the fact that MW interferes with the free choice of employers and wage-earners to set the terms of employment without outside interference? Free choice by buyers and sellers without outside interference is good for us, just as it's good for you to be free to choose what color of shirt to wear. Should outsiders be able to dictate to you what shirt to wear? So why shouldn't employers and wage-earners individually be just as free to determine the wage level without outside interference?
Poor hygiene, only effects buyer.
You have to give an example. The buyer cannot buy something poisonous and spread it around to others.
Counterfeit goods, only affects buyer.
Theoretically it also affects the producers. Like if a patent or copyright is violated. We shouldn't get into nitpicking examples like this. There are too many arguments about whether copyrights/patents do more harm than good. We shouldn't delve into all those debates in order to address this MW debate.
Ignore safety standards, only effects buyer
Depends. Others might also be affected. Also, the buyer might be misled into thinking the product is safe when it's not. That's a form of fraud. "Consumer choice" includes some amount of security against fraud or deception or blatant misinformation. If none of that is present and the buyer has good information, then the buyer should be entitled to purchase an "unsafe" product if it's available. What's wrong with that kind of "free choice" if the buyer chooses to take all the risk?
Counterfeit money, only effect seller
No, all people are harmed by counterfeit money. That's not a legitimate example of "free choice" for consumers.
And also it's fraud against the seller, and all buyers and sellers are entitled to be protected against fraud.
Enslave workers, only affects seller (of labour)
No, everyone is affected and harmed and threatened. Get serious.
Mug people in the street, might affect others. Does that mean you're ok with it as long as it's only the buyer who gets mugged?
Of course not, because I might be that buyer. Everyone is a buyer. "Consumer choice" does not include the choice of a consumer to get mugged.
What is your point with these silly examples? Free choice for buyers and sellers means something and should be given high priority. But you can't go from this principle to the silly conclusion that everyone is therefore free to beat up and rob and shoot anyone or reek havoc. It's clear what are the limitations on "free choice" -- Buyers and sellers should have the basic freedom to make their choices as anyone is free to make personal choices.
What to buy or sell, and at what price, etc., is a personal choice that should be safeguarded to each individual. Including whether to buy or sell labor. Why should the buying or selling of labor be subject to impositions from the outside any more than the choice of what costume to wear to a Halloween party?
Or are you starting to see that infringing the freedom of buyer and seller to set terms is not only desirable, but necessary to the conduct of a free market?
No, I hope I don't start imagining such brain-dead nonsense.
And this includes freedom from fraud. To say they favor "freedom" obviously does not mean freedom to commit crimes . . .
That's not obvious at all. You wouldn't support minimum wage merely if it became a criminal offence not to pay it, would you?
I'm talking about REAL "crimes" -- which is not the same thing as anything the state makes illegal. It was a "crime" to harbor a Jew in Nazi Germany, but it wasn't a REAL crime.
I mean "crime" in the higher sense, i.e., "natural law," not just anything a state makes illegal.
Freedom of choice for consumers obviously does not include the freedom to be victimized by fraud, or any other real crime. (It shouldn't be necessary to make these distinctions.)
There is a huge difference, e.g., between a transaction which pollutes the air, which does interfere with the lives of others than just the buyer and seller, and a transaction where cheap labor is hired. The latter impacts on no one other than the particular buyer(s) and seller(s) involved in the transaction, including the employer(s) and employee(s), as long as they are making their choices freely. No one outside this transaction, other than buyer(s) and seller(s), is impacted, and so it does not do any net damage to the world . . .
so it doesn't drive down the price of labour and reduce the spending power of the workforce?
It might do that, if that "workforce" is highly uncompetitive and unproductive, but it does not do any net damage to people. When the price is driven down by new technology it might reduce the incomes of some producers who were inefficient, but it increases the net benefit to all.
The vast benefit to millions or even billions of consumers, from the improvements in production, the progress, the new technology, etc., outweighs the damage to those inefficient producers who were replaced or whose incomes declined.
Otherwise, you must claim that the Luddites were right to smash up the machines that were replacing them. Is that what your minimum wage philosophy is based upon? that replacing workers with robots and computers is bad for society because it reduces the "spending power of the workforce"?
When progress or benefit to consumers is increased, it doesn't matter that some unproductive replaced producers experienced some damage, no matter how widespread that unproductive class might be, or how high is their percentage of the population.
All of these make products more expensive, and thus, by your argument, hurt us all.
No, they make products LESS expensive. Lower labor cost reduces the net prices we pay. The influx of cheap foreign imports is an example of how lower labor cost has made almost everything less expensive (i.e., less than it would have been, i.e., prices would have increased much higher than they have, and they used to increase at a much higher rate back before we had so many imports produced by cheap labor).
Those who favor free choice do not mean free choice to commit crimes etc. This should be obvious.
It should be, but you seem to be struggling to draw a distinction between what should be banned by law, and what should not.
In general the distinctions are clear. But there are always borderline cases for any rules. Just because you can bring up borderline cases does not mean the basic principle is erroneous.
You have been unable to give us any reason why the price for labor should be regulated or fixed by government but not prices of everything else.
You want some things to be banned, and others not, but can't give me the distinction between them.
Everyone wants some things to be banned and others not. You want to ban some things but not other things.
So this is irrelevant to our topic. The question here is why low wages should be banned, when both the employer and employee agree to the low wage and neither is being defrauded or forced by the other.
Instead of answering this, you give arguments against having ANY free choice, and argue that ALL free choice must be banned if any choice is to be banned. Which is silly because you know that some free choice has to be allowed but not other free choice, and that "free choice" has never meant free choice to do anything one wants, including robbing and raping and pillaging and so on. Just because it isn't always easy to lay out all the philosophical principles does not mean there is no basis for having any "free choice" whatever.
The best you've tried is something that effects no one else. A doctor who gets paid in advance and then simply kills his patients doesn't affect anyone other than the buyer and the seller, so that clearly doesn't work.
But both parties have to get what was agreed to. If the buyer is killed by the seller, then he didn't get what was agreed to.
Just because you agree with someone on something doesn't entitle that person to kill you.
It's the transaction agreed to freely that is to be protected against outside interference, such as from the state. But the agreement or deal transacted doesn't entitle one to kill the other. If that were so, then the character in the movie "Psycho" who stabbed to death the girl in the shower could claim he was entitled to do it because she was a customer at his hotel. I don't think that's what people mean when they say they want "freedom" or "free choice" in a free market. I.e., freedom to be murdered by the other party to the transaction.
Is that what you thought "free choice" means?
What's missing is that the buyer or seller must be protected from certain kinds of transaction -- ones which cause harm -- irrespective of whether they freely entered into them or not.
A low-wage job per se does not cause harm. There's lots of low-paid labor, below the minimum-wage level, and it does not cause harm. And the world would be made much worse off, net harm inflicted, if that low-wage labor should be suppressed and minimum-wage restrictions enforced universally in all cases, especially if extended to all forms of labor that are now arbitrarily excluded from being covered.
The terms "organic" and "fair trade" are not clearly defined, and some consumers are defrauded into believing there is something superior in a product labelled as "organic" or "fair trade," when the product is not really superior at all, and there is nothing wrong with investigating promotional claims or advertising that misuse these terms in a way as to defraud consumers.
How does fraudulent advertising affect anyone other than the buyer or seller?
We're all buyers and sellers. Fraud in effect cancels our free choice, because "free choice" includes the element of not being deceived or lied to about what we are choosing. The meaning of "free choice" includes a certain level of correct knowledge or available information to the one choosing, because one must KNOW what one is choosing.
Really, it ought not be necessary to make these distinctions. The fact that you cannot come up with anything better than this really proves that minimum wage is bad for our economy. Is this what minimum wage law is really based upon? that fraud is OK and that "freedom" means it's OK to murder your customer? This is the basic premise upon which we enact minimum wage laws?
The benefits of "consumer choice" do not apply in those cases where the choices are a response to fraudulent claims for the products they are choosing.
So there are situations in which a choice isn't really a choice? Such as one made under duress, or via false information?
Can you see how that leads to a minimum wage, or shall I spell it out for you?
The employer is not using duress or false information.
The dire straits that some job-seekers are in are not a result of any duress from an employer. Just because you're poor does not mean that the employer is threatening you or causing your poverty. The employer is only offering you an option to improve your situation slightly. Whether you accept the offer or turn it down, either way that employer has made you no worse off.
You're not a victim of duress if all that happened to you is that you were offered something that would be only a small improvement over what you had before. Just because you were hoping for a much larger improvement than what you got does not mean you were a victim of duress.
As to false information, you'll have to give examples. If an employer lies to the job-seeker, promising something that is false, this could be fraud and ought be prosecuted.
But this is not generally the case. Usually the worker knows the terms and is making a total free choice. However, it would be appropriate to require the employer to be forthcoming about health risks or hazards and so on. This would be an appropriate role for an agency like OSHA to play, i.e., not imposing rules, but requiring full disclosure of information to the job-seekers. The job-seekers should be free to decide what level of risk they are willing to take rather than the state or even a union deciding for them.
So you're arguing that the freedom to call your product whatever you want and express your opinion about its merits, should be limited to those claims that aren't fraudulent or misleading, because that's not a true expression of consumer choice, and thus denies the benefits that usually come from consumer choice?
Great. So that's consumers, what about producers/suppliers? Presumably they should also be protected from fraud, robbery, or market fixing from their customers, or else you don't get a functioning market there either.
There can be such a thing as fraud by consumers. In general there is no need to police consumers, however, or impose laws, other than against shoplifting or something of that nature.
If you think there is fraud on a grander scale being committed by consumers, then you need to give an example.
I said customers, not consumers. A manufacturer will buy a lot as a customer, and may enjoy a great deal of power over their suppliers.
Are you speaking of anti-competitive behavior? The "free choice" principle I've presented does not necessarily argue against antitrust law. That's a whole different issue we should not drag into this. There might be a role for the state to enforce competition and penalize anti-competitive behavior, in the interest of consumers, and to expand choices in the market.
But this is no argument for minimum wage, because there are plenty of employers/buyers and thus adequate competition between them for labor.
On the other hand, there might be a case for the lawsuit brought by some hi-tech workers against Apple, as an example of anti-competitive behavior or "restraint-of-trade" by some companies. But the low wages paid to low-value workers are a result of their very low value, not any restraint-of-trade or anticompetitive behavior by companies.
Can you see how there isn't a truly free choice going on there . . .
But there IS truly a free choice. Both of the parties, employer and employee, are made better off by the transaction, because either is free to say no if it's not in their interest.
What makes you think they are free to say no?
That may not be the case in the case of desperation wages.
They are just as free as they were before the job offer was made to them. How can the job offer be restricting their freedom? The employer offering the job is not interfering with their freedom by offering them the job. Whatever "freedom" was denied to them was already being denied to them BEFORE the job offer, and so suppressing that job offer does nothing to make the job-seeker any freer than before.
If you want to protect the job-seeker's freedom, go after whatever was curtailing his freedom, which was not the employer offering the low-wage job. That employer is only a scapegoat for the real culprit, which was something already there prior to the employer entering the picture.
As long as the job-seeker is just as free as he was before, then his choice to take or reject the offer is a free one, because he is free to retain the same amount of freedom he had before.
It certainly isn't the case where workers are forced to accept a job if offered one.
But they are just as free as they would be if NOT offered that job. So the job offer (at a low wage) is not reducing their freedom. The employer is not doing any harm to them or curtailing their freedom in the slightest.
And it ignores the costs of moving from one job to another, which may be insurmountable.
Bummer!
Who is made worse off? The workers won't choose to take that job if it makes them worse off, so it can't be the workers who are worse off. So who's made worse off by the payment to the workers going down below some minimum-wage level?
Workers whose choices are restricted in some way. As is typically the case.
How are their choices restricted by being offered this job? How is their choice restricted anymore than it would be if NO job is offered? They may take this job or refuse it. How can "take it or leave it" ever restrict their choice? How is the one offering this choice to them causing them any less freedom than if he offered them nothing?
Quantitative_easing? The government is doing exactly what you say and I think they're doing the right thing. A short term fix to a short term problem.
