nvm

[Huayna Capac357]

That's simply ridiculous. Businesses would make minimum wage as low as possible if they could.

 

[LightSpectra]

That's simply ridiculous. Businesses would make minimum wage as low as possible if they could.

Yes, which is what they do. However, if they try to pay a too lowly wage, then they won't get the workers with a sufficient degree of skill that they need, hence there's a natural minimum wage. What the government legislates is an artificial wage, which effectively creates a labor surplus.

 

[Camikaze]

Perhaps they're right-wing based on the discoveries they've made. It's rather incredulous to say that you won't accept their findings on the basis of their political beliefs. By this motivation, you could discard any finding in history on the basis that there was an ulterior motive behind the final conclusion.

The source you gave was quite clearly politically motivated, claiming opposition to Bill Clinton from a Republican controlled Congress. If you can't see that, I can't help you.

One random source from the link: William Walters. To quote wikipedia on Walter Williams:

Williams praises lassez-faire capitalism as being the most moral and most productive system man has ever devised.

It's not absurd. It makes sense. Minimum wages force companies to employ less people, who may be in poverty because of this.

No, it protects against exploitation. Or does China really have less poverty than America? Here I was thinking Chinese citizens were worse off...

 

[LightSpectra]

The source you gave was quite clearly politically motivated, claiming opposition to Bill Clinton from a Republican controlled Congress.

So? If the surveys project accurate findings, then there is no reason to discard them. Once more, you would have to reject every study in history that has a disagreeable conclusion if you're arguing that political beliefs cause incredulity.

I mean, for instance, suppose you countered with a survey that says that minimum wages help the impoverished. I could just the same reject it on the grounds that its left-wing conclusion was politically motivated. Now if these studies were scientifically flawed, that would be a different thing -- but this would have to be demonstrated in order to refute their conclusions.

No, it protects against exploitation. Or does China really have less poverty than America? Here I was thinking Chinese citizens were worse off...

China isn't a developed country. If you think the only difference between the U.S. and the PRC is the fact that the former has a legislated minimum wage, there's not much I can say.

But what's more exploitative? Allowing somebody to freely choose to work for a relatively low wage, or telling somebody and his potential employer that they cannot work together on the grounds that it would result in his co-workers' wages undesirably low?

 

[say1988]

It's not absurd. It makes sense. Minimum wages force companies to employ less people, who may be in poverty because of this.

Here is the problem.
Yes more people would likely be employed if minimum wages were to be removed, but would they be employed at a level above the poverty line?
If the labour market is tight enough, they would be above the poverty line, but in many cases they would likely be earning above the minimum wage in this case.

Leaving you the choice of lots of people working, yet needing support, or fewer people working and not needing support and less people working and needing less support.

 

[LightSpectra]

Yes more people would likely be employed if minimum wages were to be removed, but would they be employed at a level above the poverty line?

Perhaps not. But, having a poor salary is better than no salary, because otherwise the laborers would not take these jobs in the first place. Forcing these people to not take these jobs on the grounds that they are below the arbitrary artificial minimum wage is obviously counter-intuitive, it just pushes them further into financial difficulty.

 

[say1988]

It is a question of priorities.

Do you want a portion of the segment population in question sufficiently well off (and in many cases it is s stretch to live on minimum wage), or the whole segment of the populationl with some, but not enough?

 

[LightSpectra]

Do you want a portion of the segment population in question sufficiently well off (and in many cases it is s stretch to live on minimum wage), or the whole segment of the populationl with some, but not enough?

The latter. It's unfair and arbitrary to use government authority to force some people to live well-off and others to be unemployed. If somebody is willing to do the same work for less money, there is no sufficient reason to deny him a job.

 

[REDY]

He was bad for America, but he harmed more a Europe/world than his own country. I hope that new presidents will learn from his mistakes to not repeat them.

 

[aelf]

Que? Globalization has risen the natural minimum wage in many third world countries. The reason people work in sweat shops in China and other places are because these jobs provide a higher wage than anything else they can find. If they weren't working there, they'd often go starve, or have to resort to prostitution.

Globalisation depresses wages in more developed countries, though. And it's fine and well to say that wages are necessarily low in developing countries, where costs of living should be pretty low to balance it out to some extent, but the question is how long should this condition be tolerated. Why would there be incentive to raise the wage rate when industries are doing so well thanks to how low it is? The private sector can develop a reliance on cheap labour, and this causes stickiness in wage rates, preventing them from rising for a long time.

Your point also fails to address the situation in more developed countries. There is no need for sweat shops because their economies are more developed, right? But globalisation is putting downward pressure on wages in order to compete with countries that do have sweatshops.

So, given an inexorable pace of globalisation, the best thing for everyone is to have developing countries move out of the sweatshop stage as quickly as possible. The gradual introduction of regulation in the labour market of developing countries helps with that by forcing wages to move up gradually, thereby forcing companies to develop better production methods to be less reliant on cheap labour. In any case, it's certainly not going to be helped by the complete lack of regulation.

Competition causes wages to rise, not lower. This is logically deducible. If there's more competition, then there's more urge to invest and grow faster, which requires more jobs. More jobs means that each individual worker is able to acquire a higher salary.

You seem to be unaware of the distinction between the labour market and the product market. Of course I was referring to competition in the labour market, since we are talking about wages.

If what you were saying is true, then places like Hong Kong and Estonia would be experiencing catastrophic wage drops. That's the opposite of the case.

I don't know about Estonia, but I do know about East Asia. There is definitely downward pressure on wages, but not all of it is 'visible'. A lot of the time it takes the form of forcing increased productivity per worker - you do more or work longer for the same wage or just a little more.

Technological growth is a factor but not to the degree you think it is. China is currently experiencing an insane amount of growth, though technologically, they're almost entirely leeching off of other developed countries or just lagging behind in general. The same is true of the Baltic nations and other countries on the threshold of being considered "developed."

I said steady state economy, not a developing one. Besides, assimilation of technology is also under technological growth and requires investment in R&D. And in order to have a large enough base of human capital for technological development (whether innovating or assimilating), you need a large enough section of the population who can afford to go for extended education or training. If you lack some social safety net, you'd only have the wealthier section of the population to rely on.

Subsidies on education do help, but they would only help insofar as the individual can predict enough economic potential for the kind of work his training prepares him. As such, there would be a rush for fields that are perceived to be high-potential. However, education is quite a long-term investment, and it's hard to predict the long-term. That is why a population with diverse knowledge and skills is probably the best way to ensure that technological growth is smooth - you don't want too many in certain fields and too few in others.

Another point to make clear is that investments for the most part come from the upper classes. If you raise taxes on them too high, they move their investments to other countries, thus significantly hampering economic growth and job opportunities.

That is false considering the age of the industrialist is over. There are plenty of things to dislike about the financial industry, but it has gotten the general public more involved in making investments. And the side effect of that is you can no longer claim that investment is pretty much the domain of the wealthy. The wealthy are also likely to spend their money on luxuries (translating to an uncertain elasticity of investment spending - the rich may be too rich to care much about making good investments), and there are fewer of them anyway. There is financial power in numbers, especially those who are naturally more concerned about their future.

Come again? If somebody is willing to work "as a slave," he's doing so because that's the best work he can find. If you deny him that, then you're condemning him to starvation or even an even worse occupation. This is a sad truth about third world countries.

That is if you assume that the current arrangement is the best possible one. While that may be true at points in time, that is certainly not always true. Again, the question is how long such conditions should be tolerated - and they can last a long time without a good justification. Society does not automatically adjust to the best possible arrangement. It requires direct action.

Anyway, I was addressing your argument from the point of view of freedom. I'm pointing out that not all freedom is good, that a fair social contract is one that involves restriction of some liberty for the sake of greater liberty - such as restrictions on the slave trade.

I never said he single-handedly caused it. He had a great deal of help from figures such as Thatcher and Pope John Paul II. But, he was the primary mover in the war's end.

If I'm reading this right, you're seriously contending that the financial cost of ending the Cold War wasn't worth the freedom it won. Not even counting the ridiculousness of that, I've already pointed out that the increased military spending was an investment, as it resulted in us having to spend a great deal less on the defense budget after the war was over. (The reduction of the defense budget was one of the causes of the budget surplus during the Clinton administration, for example.)

There is nothing ridiculous in what I meant unless you're going to contend that Soviet-style Communism (or variations thereof) wasn't going to collapse without an intensified arms race. That would be to ignore the various key developments that occurred within these countries (especially the Soviet Union), as well as other important reasons.

Also, you are again resorting to freedom as some sort of a trump card that you have put your unconditional faith in. The Marxist critique is very relevant here because the introduction of some freedoms does not necessarily result in greater freedom. People who are severely disadvantaged by the shift to market-based economies, for example, would not find that their freedom is increased in any significant extent. It might even have worsened.

Lastly, your "increased defense spending meant we spend less later on" argument is quite false. Unless you can prove that the net effect is close to zero, there is no reason to believe that spending did not increase overall. Besides, as things turn out, it does set a bad precedent. And why would you even want to put so much money in that? It's not good for the health and sanity of the world.

 

[say1988]

In theory, that should be true, but you don't know the scale, if you decrease wages by 20% and decrease prices by 5% then you still have a problem. And there are other factors as well. As wages decrease some workers will want, and receive, more hours, thus maintaining their income (increasing it a PPP) and while total labour expands, the number of people employed doesn't increase as much.

And reality doesn't always fit the theory.

 

[aelf]

So what if wages decrease, when prices do, faster.

Why faster? Prices are not only dependent on wage levels, so there's no reason to believe that prices would fall faster when wages fall.

Because thats what more productivity does: produces more per worker engaged due to there being more productive capital per worker as a product of the accumulation of savings entrepreneurship, the heros of modern society.

Free market capitalism: mass production for the masses

And what the hell are you talking about here? What is this in response to? How is increase in productivity brought about by falling wages? Increase in productivity is supposed to lead to an increase in wages! But when the latter doesn't happen, there is increased exploitation, which is what I was referring to when talking about the 'invisible' downward pressure on wages.

Seriously, for all the crap that you spout on it, have you ever done any economics that isn't rudimentary and learned without a good helping of your Mises nonsense?

 

[jessiecat]

Just to get back to the OP. Any so-called "treachery of FDR" is the expresssion of historical revisionism gone mad on behalf of the capitalist class who had the most to lose from his policies (and deserved to) and willfully dismisses the vast majority of the working class who benefited most. All that is left is juvenile historical romanticism.

 

[say1988]

It makes economic sense that Y would increase, assuming that the minimum wage is keeping the economy below full employment (otherwise there would be no effect at all effect). i.e. We are maintaining Y below equilibrium by using the minimum wage.

Increasing employment would increase demand, which would cause firms to increase production and employment until it reaches equilibrium.

As for prices, it is pretty simple to see that companies that don't increase employment would theoretically at least, be lower prices (but this is unlikely, it is more likely that prices would maintain until the rest catches up). This can be understood without economic knowledge.

But overall most of what he said is bad, theoretically and in the real world.

 

[LightSpectra]

Just to get back to the OP. Any so-called "treachery of FDR" is the expresssion of historical revisionism gone mad on behalf of the capitalist class who had the most to lose from his policies (and deserved to) and willfully dismisses the vast majority of the working class who benefited most. All that is left is juvenile historical romanticism.

I don't think the working class Japanese-Americans that lost thousands of dollars because of the internment camps would agree that pointing out FDR's grievous errors is "historical revisionism gone mad" on behalf of the capitalist class.

 

[Lord Baal]

Ehh Actually Operation Sledgehammer, Operation Roundup and Operation Bolero all originated from the American Military Generals i.e Marshall and his subordinates. Operation Sledgehammer was a cross channel invasion of limited scope to be launched in the face of collapsing Russian positions, the limited objectives were to basically reduce pressure on the Russians. Roundup was slightly more serious, aka an actual invasion, unfortunately/fortunately the Allies didn't have the capacity to carry these operations out (as the Dieppe raid proved, such operations are quite hard). Operation Bolero was the build up of American forces in the UK for an eventual invasion of France.

Now Brooke the British CIGS hated Sledgehammer and Roundup, and strongly opposed them, pointing out lack of shipping, the waste of resources and other factors. However the Shipping is the strongest point. Churchill loved Bolero, as it put American forces on the ground in case of invasion, something he wanted. However Churchill was convinced by Brooke that Sledgehammer/Roundup were not to be pursued, at least not so soon until proper resources had been built up.

Churchill quite cynically I suppose, proposed Operation Torch, this helped him in Africa and also ruled out an Invasion of Europe proper in 1943. Brooke and Marshall both disliked it. However Churchill convinced FDR, and thus the generals were ordered to make it so. Now in my mind Operation Torch, as the first operation in Europe was always going to have teething problems, they also weren't sure how to treat the french, which was just plain difficult. So on the scope of things, it wasn't the perfect operation, but it did the job.

Okay. This is far from my area of expertise, so I'll take your word on that.

FDR did mess up with Darlan, bit strange that both the UK and the USA had 'pet' frenchmen for a while, not sure what FDR hoped to achieve.

FDR was firmly convinced that Petain was the go-to guy to save France. This flew in the face of absolutely every ounce of logic, reason, and evidence. It was positively bizarre, not to mention irrational and unbecoming of any head-of-state. Hell, he even actively encouraged Giraud to weaken De Gaulle's position, when the two were quite happy to work together before FDR's interference.

I think FDR was just convinced that he had to be right, even when he clearly wasn't. He had to be dragged kicking and screaming by Churchill and Eisenhower into eventually supporting De Gaulle, and only after Petain had been evacuated to Germany, Darlan killed, and Giraud discredited by attempting to dominate the Fighting French with FDR's encouragement, most of whom were completely loyal to De Gaulle. There was also the matter of Giraud's embarrassing letter in which he professed his loyalty to Weygand and Petain, though, in all fairness, he had just escaped prison and was trying to avoid going back at the time.

I know they tried to include Giraud, he was a bit demanding however (wanted to be commander of the entire operation?), can't remember de Gaulle, but I don't think Churchill liked him much, and didn't want him out from under his thumb anyway.

Again, in Giraud's defence, he'd been led to believe he'd be in command through some poor communications. Once Ike sat down with him he relented.

With regards to buggering Torch up, perfection is difficult, and the way FDR had set up Politics at Washington didn't really help. I don't expect perfection however, I don't even expect very good at this stage, maybe just decent.

The problem was that the original Torch plan was actually pretty damn good, but FDR changed it for no good reason.

North Africa, Egypt etc didn't have the infrastructure to build up resources to the degree that Britain had the capacity to serve, all such operations would have been much more limited. More to the point the implementation of bolero had meant that they had been building up troops in the UK, since before Operation Torch was launched, it would have taken a long time to move such a large amount of troops to another staging area, since they would have had to wait till these staging areas were subsequently captured.

Furthermore the Americans (and this emanated quite a lot from the American Generals as well) thought that the British were being well, cowardly about going into Northern France and by this point the Americans had most of the material and resources and bullied the British into this position too. The Americans weren't as worried about casualties. It did make a certain amount of sense, go for the heart of the problem, Germany, from the strongest power base you have in the region, Britain. But the blame for such an operation doesn't rest completely on FDR's shoulders, his military advisers were pushing it hard.

And his military advisers were being arses. Germany would have eaten a hasty invasion for lunch. That said, the invasion should have been earlier than it was, but not as quickly as was being pushed. Still, you're not really wrong there, and I'd have to do more reading than I really feel like to argue this properly, even if I disagreed. It's more a gut feeling that my reading indicates you're not entirely right than anything I can logically point to, so I won't point to it.

I can agree with this, Early on there was some hope that the Americans could go back to to letting the British take care of things. This proved false over the course of the war, and Americas growing up period was rapid and full of mistakes, Unfortunately the Americans were still fairly short-sighted and couldn't really fully accept the consequences of the war . (Come on, they were used to having this tiny army and just sort of sitting out and pointing at the Old world!). Now if you put any American president from recently back in FDR's shoes I'm pretty sure the outcome would have been different, but now the Americans are used to being on top and thinking ahead...well sort of.

Truman didn't fully accept the consequences until George Kennan's famous essay about how Russia should be dealt with - hilariously, he and the administration misinterpreted it anyway - and FDR never did. He had his ideological viewpoint, and he was going to stick to it dammit, despite all the evidence to the contrary. Pretty much the main reason I dislike the guy.

I'd argue that modern American Presidents tend to be pretty short-sighted themselves. They're interested in re-election, and occasionally accomplishing a set goal, but that's it. I don't recall an especially long-term thinker since Eisenhower. Reagan might have had a few long-term thoughts before his brain died, but it's difficult to separate actual plans from rhetoric in his early speeches.

 

[aelf]

It makes economic sense that Y would increase, assuming that the minimum wage is keeping the economy below full employment (otherwise there would be no effect at all effect). i.e. We are maintaining Y below equilibrium by using the minimum wage.

Increasing employment would increase demand, which would cause firms to increase production and employment until it reaches equilibrium.

So what? I didn't know that it's an absolute must to pursue the 'optimal' equilibrium level of income and employment at any given point of time. National income would still increase in the longer run due to increases in productivity fueled, in steady state, by technological development. And I have argued that technological development can be facilitated by a population with diverse skills, which is in turn facilitated by a social safety net that allows people to choose their training and career paths instead of just rushing to take up jobs that would best help them get by.

As for unemployment, the goal would be to ensure that there is fairly rapid turnover, so that there are as few permanently unemployed people as possible.

I think that's the best way to prevent the creation of a permanent underclass who are working but earning low wages and spending all their money on the necessities of life, without generally being able to entertain notions of having a better future, even across generations.

As for prices, it is pretty simple to see that companies that don't increase employment would theoretically at least, be lower prices (but this is unlikely, it is more likely that prices would maintain until the rest catches up). This can be understood without economic knowledge.

This doesn't seem to make sense at all. Companies that increase employment wouldn't lower prices? If they are not price setters, they would have to lower prices as there is an increase in supply due to increased employment (due to lower input prices in the form of lower wages). But I'm not disputing that prices are likely to fall with falling wages. I'm disputing the fact that prices would fall faster than wages and thereby increase real wages. National income is higher now, but each worker is poorer.

 

[say1988]

So what?

You asked why removing the minimum wage would increase production.
I never said anything was good or bad, or right or wrong. In fact I stand firmly in favour of a minimum wage, whether it decreases production or not.

But I'm not disputing that prices are likely to fall with falling wages. I'm disputing the fact that prices would fall faster than wages and thereby increase real wages.

Then I misunderstood you. I agree. Some industries, in some regions, would likely drop prices quite considerably, many would have no impact. The fall may be greater in some markets then others, but others would be the opposite and there is overall no way to know what would happen.
And of course the main beneficiary would be the middle and upper classes whose natural wage is greater than minimum wage and therefore get price decreases at no cost to themselves (except possible taxes to support increased welfare).

 

[Serutan]

I repeat that he burned crops (thus falling prey to the broken window fallacy) in order to raise food prices, which only caused more malnutrition in his country.

He paid farmers to not grow crops, which is not quite the same thing. And whatever starvation that was caused by that was more than compensated by the amount of starvation prevented by allowing the farmers to have enough money to keep farming, rather than abandon their farms because they couldn't make a living.

His leading of WWII is a bit of an embarrassment. He at first tried to micromanage the war, failed miserably; and consequently, he threw up his hands and said "alright Marshall, Stimson and Eisenhower, just deal with it, I don't care."

What did he micromanage as far as the Army was concerned? His chief interest was
always with the Navy. What was criminal was that he didn't order King to use convoys on the Atlantic coast in 1942.

FDR is also essentially the reason why the Cold War happened. His indisputably terrible diplomatic skills resulted in ceding far more of Europe than need be to the Soviets, which is why he's considered a paragon of the Western betrayal. Though I suppose you think that this was a good thing if you're a socialist.

Incorrect. Churchill had set things in motion before Pearl Harbor by making concessions to the Soviets when they were in a very weak bargaining position (i.e. during Barbarossa). It was also Churchill who agreed to a spheres of influence deal with Stalin in 1944, and put heavy pressure on the Poles to accept the Soviet proposal for the post war boundary between the SU and Poland. Roosevelt was simply following a well worn path. Interestingly enough the US State Department was more skeptical about the Soviet's postwar intentions during the war than the British. And you are overlooking the very practical detail that the Soviets had 300 divisions in Eastern Europe in 1945, which meant that Stalin could do as he pleased there unless the US and Britain were willing to declare war.

 

[Karalysia]

It is also worth pointing out that when FDR took office the US was in the midst of a terrible depression with 1/4 of the country unemployed. When he left office the US was the world's superpower and the single richest and most powerful country in the world.

That alone I think speaks volumes.