Corporatism vs. the Free Market

Don't blame the "mobility gap" on the free market. Blame it on crony capitalism.

“Americans enjoy less economic mobility than their peers in Canada and much of Western Europe.” That’s how The New York Times began a page-one news story yesterday.

It is a thoughtful story that offer a variety of explanations—some of them mitigating—for the so-called mobility gap. This subject merits attention because we should aspire to live in a society in which someone born in (relative) poverty can work his or her way up to better material circumstances, even if lower-income people are richer than their earlier counterparts.

Those who advocate the freeing of markets have no reason to receive the news of the gap defensively. If we are right about the breadth and depth of bureaucratic interference with the peaceful, creative activities of individuals, as well as the extent of government privileges for the well-connected—and we are—then drags on mobility are at least partly the consequence of that interference. In other words, the mobility gap can’t be the result of the free market because there isn’t one. The economy is systematically misshapen by intervention. (The Times cites concern about the gap among some conservatives.)

The Minimum Wage and Public Schools

When I think “limits to mobility,” two phrases immediately occur to me: minimum wage and public schooling. If you wanted to impede upward mobility, there could hardly be better ways than to scuttle job creation for the unskilled and to give poor people a bureaucratically produced “education.” Those are not features of the free market.

Nor are these the only ways government throws sand in the eyes of the those who start out with little. In the current issue of The Freeman, Gary Chartier discusses this matter at length: “Government Is No Friend of the Poor.” (For more, see Charles Johnson’s “Scratching By: How Government Creates Poverty as We Know It.”)

This will be readily conceded by free-market advocates, but some harbor a belief that the U.S. economy is much freer than Europe’s and Canada’s socialistic welfare states and so to make negative comparisons with those countries is to cast aspersions at freedom. Not so. The economies of America, Canada, and Europe are all variations of corporatism in which government power primarily benefits the well-connected and well-to-do, with secondary interventions intended in part to ameliorate some of the harsher consequences of the primary interventions. As I wrote on another occasion:

In reality the debate [between America and Europe] is not between socialism and free enterprise.  Rather it’s between two forms of corporatism, America-style and European-style.  I don’t want either, but it’s not obvious to me a priori that the American variant is superior in every respect to the European variant. . . . One variant may indeed cushion the victims of political privilege-granting better than others. Considering who writes the rules over here, I see no grounds for thinking that we necessarily have it better than the Germans do in every possible way.

The Gap

Here are some particulars in the Times story:

At least five large studies in recent years have found the United States to be less mobile than comparable nations. A project led by Markus Jantti, an economist at a Swedish university, found that 42 percent of American men raised in the bottom fifth of incomes stay there as adults. That shows a level of persistent disadvantage much higher than in Denmark (25 percent) and Britain (30 percent) — a country famous for its class constraints.

Meanwhile, just 8 percent of American men at the bottom rose to the top fifth. That compares with 12 percent of the British and 14 percent of the Danes. [The study, in PDF format, is here.]

Despite frequent references to the United States as a classless society, about 62 percent of Americans (male and female) raised in the top fifth of incomes stay in the top two-fifths, according to research by the Economic Mobility Project of the Pew Charitable Trusts. Similarly, 65 percent born in the bottom fifth stay in the bottom two-fifths. [See PDF here.]...

While Europe differs from the United States in culture and demographics, a more telling comparison may be with Canada, a neighbor with significant ethnic diversity. Miles Corak, an economist at the University of Ottawa, found that just 16 percent of Canadian men raised in the bottom tenth of incomes stayed there as adults, compared with 22 percent of Americans. Similarly, 26 percent of American men raised at the top tenth stayed there, but just 18 percent of Canadians.

Not the Whole Story

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  • ||

    Say, let's try this free market thing out. I've heard about it over the years, and I always thought it sounded like a neat idea.

  • ||

    Sounds like a scam to me.

  • ||

    Maybe you're right. Let's try that communism thing instead. It would solve the obesity pandemic!

  • Kim Jong Un||

    Not for me, is hasn't!

  • ||

    I am interested in what you have to say and wish to subscribe to your newsletter.

  • Paul||

    It's not communism when Republicans pass SOPA. Totally not communism. We need "free markets" to tell us how to run our businesses.

  • ||

    Not a single person here supports SOPA you fucking nitwit.

  • Paul||

    The establishment screams "promote manufacturing" and "stop technology", fucking crickets.

  • ||

    What the hell are you talking about?

  • HermanLame||

    'We need "free markets" to tell us how to run our businesses.'
    What exactly is this supposed to be poking fun at?

  • Paul||

    You'd think with all the old voters, they might remember what communism sounds like.

  • ||

    "When I think “limits to mobility,” two phrases immediately occur to me: minimum wage and public schooling."

    What a stupid knee-jerk reactionary thought.

    I would think of limited access to working capital and market suffocation from entrenched interests.

  • Old Man With Candy||

    Market suffocation? You mean like Univac, Wang, DEC, Kodak, Polaroid, AOL, Pan Am...?

  • Sudden||

    I do tend to agree with him on the limited access to working capital though. It can be tough to get capital to start a business if you don't either already have significant savings you're putting into it (lenders have more confidence when you're risking your own bottom dollar) or have a revolutionary and unique product. If you want to start a car lot because you've spent the last 15 years selling cars, but haven't been able to make enough money to actually put anything significant towards the venture, getting startup capital can seem impossible.

  • romulus augustus||

    If you are lot #15 within five square miles, then you might have trouble raising money. If you are the first lot and there's no other within ten miles and - if there's a market for a car lot - you shouldn't have much trouble finding investors.

  • EDG reppin' LBC||

    Strong business plans are what investors look for. People with money want to make more money and really want to lend it to other people with good ideas. They aren't trying to punish you by not lending money, in fact that punishes the lender (missed opportunity for profits). But understand, that they avoid risk, and therefore want to lend to ventures they think will succeed. That's where a good business plan comes in. In short, there is plenty of money available from investors, but there is a dearth of good ideas backed by a solid business plan.

  • Old Man With Candy||

    Banks don't finance new businesses, VCs and angels do. Why aren't they doing it the way they used to? No clear exit strategy. Thank SarbOx for that. I started and took two companies through IPOs, created hundreds of jobs. I couldn't do that now. Until the government stops fucking up the capital markets, I'm just keepin' my head down and playing around with biotech research.

  • Old Mexican||

    Re: shrike,

    I would think of limited access to working capital and market suffocation from entrenched interests.


    Market suffocation I understand, but access to working capital? Do you mean credit? Credit only becomes a necessity when the barriers to entry raise the cost of business, but otherwise you can fund a startup through the three F's (Friends, Family and Fools) or by mortgaging the house.

    What a stupid knee-jerk reactionary thought.


    Why would that be? I can think of many things that limit access to a market but I don't dismiss those two as unimportant.

  • anon||

    Really? Cause when I think "limits to mobility," I generally think of the ones government puts on the downward mobility of certain corporations.

  • THIS||

    That, and the other thing...

  • ||

    That's a good way to put that, 'downward mobility'.

  • ||

    By the way that's not sarcasm (it can be hard to tell here).

  • o3||

    "The economy is systematically misshapen by government intervention."
    _

    good luck running a modern economy using barter. i prefer govt-printed money subject to international valuation.

  • Hmmm||

    Who says barter is necessary or desired? It clearly wouldn't suffice in this day and age.

    I have no problem with the government printing notes - as long as they are backed by something with universal or 'international' value - such as precious metals or commodities.

  • Old Mexican||

    Re: Triple Asshole,

    good luck running a modern economy using barter.


    What does this have to do with anything? Are you having an LSD trip or something?

    i prefer govt-printed money subject to international valuation.


    Prefer it over what? Barter? That's like saying you prefer being raped over being killed, but that's not much of a comparison.

  • o3||

    ol mex - the point is govt-printed money IS govt intervention into teh free market.

  • Old Mexican||

    Re: Triple asshole,

    the point is govt-printed money IS govt intervention into teh free market.


    Was that your point? Because it makes even less sense to bring it out. You are leaving the impression that there can be only government-backed money or barter, nothing else. This is obviously not true, yet I have no doubt you think this is so.

  • anon||

    Re: Triple Idiot

    Ever heard of this cool precious metal called gold?

    Fucking false dichotomies. How do they work?

  • Tony||

    The only thing that separates a "free market" from crony capitalism is a libertarian waving his hand.

    And isn't it precious how we excuse all of the US's poor metrics by noting that we have poor black people unlike the other countries. Unwed motherhood and high incarceration aren't symptoms of a lack of mobility--it's just those people being how they are. Yeah this argument isn't new, yet it remains revolting.

    And take away public education and you take away the single biggest factor in class mobility. Education is everything. Midcentury middle class prosperity was arguably created by the GI bill. How do you have mobility if your parents are poor and can't afford to buy you an education? Your tirade against public education makes no sense and you needn't bother justifying it, not that you tried.

  • Not Amused||

    waves dick in tony's face. I have no hands

  • Y-not||

    -1,247 for acknowledging the imbecile troll.

  • Brandon||

    Are you off your meds? Your strawmen are particularly vicious today.

  • Tony||

    Oh it's a strawman to say you oppose public education. So how much socialized taxpayer funded education do you support, exactly?

  • wareagle||

    no one opposes public education; lots of folks oppose the publicly-funded system of indoctrination that is currently in place. Stated more simply - when colleges stop having to offer remedial math and language classes, then I'll say the public schools are doing their job.

  • Xenocles||

    "no one I don't opposes public education..."

    FIFY.

  • Tony||

    I agree wholeheartedly that our public education is awful, just look at our stats. I just don't see how a radical antigovernment approach improves things.

  • ||

    "I just don't see how a radical antigovernment approach improves things."
    Because the government is the problem. But to you they are the only answer. ....."There was not enough"...."Or the "right" people were not running it"...."But we will get it right this time".....When are you going to learn Tony.....Your sacred cow named central planning is sick and it is making the rest of us in this country sick also? Are you man enough to own up to it?
    People need to be taught to be self reliant, not indoctrinated with the crap that the left pushes into their brain every day from k-12 to PHD school . The system is broken but adding "MORE" of a broken system is not the answer Tony.

  • Y-not||

    Tony is Lord of the Strawmen. He spews forth legions of weak arguements and lame anologies in an imbecilic attempt to advance the cause of fascism. It is all he knows and all he will ever know.

  • RoboCain||

    Is it even the "real" Tony?

  • The Ingenious Hidalgo||

    Unwed motherhood and high incarceration aren't symptoms of a lack of mobility--it's just those people being how they are.

    Can you cite a paraphrase of this from Richman's article?

  • Tony||

    Here's a quote:

    "Higher U.S. rates of poor single motherhood and of incarceration could also help explain the relative lack of mobility."

  • The Ingenious Hidalgo||

    And the "it's just those people being how they are" bit?

  • Tony||

    Is there some confusion about what he meant?

  • The Ingenious Hidalgo||

    Yes. Usually when you make up an argument your opponent didn't make in order to make your job of refuting their position easier it's called a straw man. Can you explain why this isn't one?

  • ||

    It is obviously a subtext in the article. (This quote is from the Time magazine excerpt)

    While Europe differs from the United States in culture and demographics, a more telling comparison may be with Canada, a neighbor with significant ethnic diversity.

  • War on Drugs||

    knock knock tony, here to arrest your daddy...

  • ||

    You obviously are confused... Richman nowhere said that "Unwed motherhood and high incarceration are symptoms of a lack of mobility", rather he wrote that they can help explain (as causes) the relative lack of mobility.

  • Tony||

    That's exactly what I said. I'm claiming they're symptoms. He's saying they're causes.

    It's the same illogical racist bullshit trotted out to excuse bad metrics in the US all the time by people who can't admit that the relevant difference is the better-off countries have stronger social support systems. Also, people who don't realize that black people are people too.

  • The Ingenious Hidalgo||

    Well, now you're calling him racist. Still feel no responsibility to actually back up that claim?

  • Tony||

    It's always a distraction to mention race, so sorry about that. But it's still a racist argument.

  • The Ingenious Hidalgo||

    ... I don't know what to say.

  • ||

    But it's still a racist argument.

    How so? Some people of all races are poor; some people of all races live without a spouse and w/ children; some people of all races are incarcerated.

    If the unmentioned ratios make it a "racist argument", then using the same logic, the so-called justice system is sexist beyond measure: just take a look how many males are incarcerated vs. how many females. If the argument is: "those males chose to commit crimes" then the same argument of personal choice applies to unwed motherhood and (racially disparate) incarceration.

  • Tony||

    I'd be willing to overlook the racist dog whislting element and simply say it's an illogical and lame excuse for bad social outcomes, if only to spare us the inevitable ugly racist responses that often happen here under anonymous handles.

    My argument isn't that males choose to commit crimes more often, it would be that males are genetically more predisposed.

    But it's not the case that different races are differently predisposed to poverty, unwed pregnancy, etc. Poverty is the cause of all the others and if there is a racial disparity it's because of a history of racism.

  • wareagle||

    the truth is not racist. Blacks DO have higher rates of single parenthood than other races. Blacks DO have higher per capita rates of incarceration than other races. Blacks DO have higher rates unemployment, higher dropout rates, and lower academic achievement scores. Sounds like liberal policy has worked just fine for the Dem plantation masters. The left has done things to blacks that not even the most motivated Klansman could hope to achieve.

    I learned the other day that the first American woman to become a self-made millionaire was, in fact, black. So, it's not as if blacks are incapable of doing good things. A generation-plus ago, the typical black family had both parents in the home and, usually, both worked, sometimes multiple jobs. Then came the Great Society. Congratulations.

  • ||

    [...] it would be that males are genetically more predisposed.

    But it's not the case that different races are differently predisposed to poverty, unwed pregnancy, etc.

    How do you know that the former is the case but not the latter?

  • Tony||

    They're just educated guesses, but there is google in case you want to research the matter.

  • ||

    They're just educated guesses

    That's fine; sounds much better than the certitude of "But it's not the case that ...".

  • Tony||

    Thank you Ted Nugent, it might be news to black Americans that they were better off in the past.

    You just have things backwards. You see bad social statistics among blacks and then blame them for it. I say their being an economic underclass for all of the country's history might have something to do with those statistics.

    The problem with your idea that liberal programs have been detrimental is that blacks almost universally vote Democratic. Are they universally being duped?

  • Sam Grove||

    You see bad social statistics among blacks and then blame them for it.

    Now THAT'S a straw man.
    Making an observation is distinct from making a judgment.

  • ||

    [...] blacks almost universally vote Democratic. Are they universally being duped?

    To the extent that they give power to the Democrats yet their lot isn't improved, yes they are duped.

  • ||

    Are they universally being duped?

    Since you brought it up yes they are. Show me exactly what the "leberals" have done fore them in the last 40 years....

    Other than make them poor slaves for the "vote" nothing.

  • HermanLame||

    Clearly Mr. Richman is a crypto-racist.

  • Y-not||

    Imbecile's reference is irrelevent. No surprise.

  • Old Mexican||

    Re: Tony the Ignoramus,

    The only thing that separates a "free market" from crony capitalism is a libertarian waving his hand.


    Or green dragons that spew love. Or any other non sequitur you can pull out from your ass.

    And isn't it precious how we excuse all of the US's poor metrics[...]


    You mean the same metrics that the government provides to justify further interventions? THOSE metrics?

    [...]by noting that we have poor black people unlike the other countries.


    You mean other countries that have different black people, or that have none at all?

    You're becoming less and less coherent as time goes by, Tony. Are you suffering from some kind of progressive dystrophy you just don't want anybody to know?

  • Brother Grimm||

    "Progressive" dystrophy. Now we're on to something!

  • ||

    It's not unreasonable to say that the statistics are skewed because we have a large underclass that are not socially mobile, for reasons that have nothing to do with capitalism.

  • Paul||

    Libertarians believe in outlawing any choice that can help provide opportunity to people who aren't in the elite. Scratch a libertarian find a corporate fascist who wants to enslave their "lessers" for profit.

  • ||

    ... and female witches copulate with spawns of Satan, then ensnare decent men with their sexual wiles.

  • ||

    Goddamn you are FUCKING RETARDED!

  • ||

    Did you swallow Tony to get that smart?

  • ||

    Damn it, how did you figure that out? I thought we'd fooled everyone.

  • ||

    At no fucking time did Richman bring race into this discussion. You and your kinds continued insistence on using it proves to me that you are unequivocally racist ass motherfuckers.

  • ||

    Well, you put us in our place. Time to shut down the site.

  • BakedPenguin||

    Yes, regulations stifle small businesses and start-ups the most by far. Trying to explain that to progressives is a lost cause, though.

  • BakedPenguin||

    Hmm. Maybe I should read the entire article prior to posting.

    Anyway, the idea that a stultifying bureaucracy will help promote economic mobility is ridiculous.

  • ||

    The only thing that has helped people be upwardly mobile or improved the overall human condition in the United States is the wealth and prosperity of a freeish market. They keep yammering on about government solving problems, but the problems the government is involved in never get better. It just takes credit for improvements created by having an affluent, technologically advanced society.

  • Tony||

    Yes perhaps forcing a meat vendor not to sell rotten meat is bad for his business. So what? Making murder illegal is bad for the hit man business. I don't see in the constitution a right to make a profit by any means you want.

  • Tony||

    BURN, STRAWMAN, BURN!

  • Rotten Meat Vendor||

    What do you mean you're not buying my rotten meat any more?

    *

    *

    *

    What do you mean I don't have enough sales to stay open?

  • Tony||

    What about the dead customers?

    Do we really need the market to judge before we know that rotten meat is bad for you?

  • Hmmm||

    I may have some uses for rotten meat that you might not know about.

  • Y-not||

    Q1: How many people die each year from corporate fraud/malfeasance?

    Q2: How many people die each year from government causes?

  • Tony||

    1: A lot more than you'd be willing to admit. 2: When corporations are responsible for fighting wars then the comparison will be apples and apples.

  • Y-not||

    That's right, Tony-boy, government causes more deaths. Leave out war and it still does - think famine, ethnic cleansing, and concentration camps.

    Apples to apples? Well let's see, right now eeeviiiil KORPORASHUNS are subjected to mountains of regulations.

    Is your precious government subject to the same degree of accountability? What was that? No? well, gee, HOW DO YOU LIKE THEM APPLES? Imbecile.

  • Tony||

    How does government cause famine?

    By not ensuring an infrastructure and subsidies to deliver food to the people?

  • Red Rocks Rockin||

    How does government cause famine?

    Ask the North Koreans.

  • 5,000,000 Ukrainians||

    That's not normally how they do it, no.

  • A Serious Man||

    Prove that more people would die without regulation rather than just continuing your circle-jerk of question begging.

  • ||

    Last time I checked corporations do fight wars (and imprison people) in the US system.

  • Gojira||

    What about the dead customers?

    Should've cooked the fucking meat.

    Hows about a 35mph national speed limit on all the highways? That will surely reduce traffic fatalities.

    How about mandating sticky coating in all showers and bathtubs? That will prevent people from falling and hurting themselves.

    How about outlawing swimming in the ocean, or SCUBA diving? That will also save lives.

  • Y-not||

    Fool! Your army of stawmen and lame analogies is no match for the Uruk-Strawmen of Tony!

  • Gojira||

    Lame they may be, but strawmen they are not.

    I was not attributing such arguments to Tony and then attacking them (strawman).

    I was asking him to assert the difference between his original statement, and those (admittedly lame) scenerios. Which he does, below (in his post about making trade-offs).

  • Tony||

    Hows about a 35mph national speed limit on all the highways? That will surely reduce traffic fatalities.

    It surely would virtually eliminate them. But everything is a balance. As a society we've accepted a certain level of traffic deaths in exchange for a certain level of liberty with respect to the speed limit. Reasonable people can argue about where the line should be drawn. Perhaps you think we should accept a lot more deaths for a little more liberty. Okay, but it's not fascism to disagree with you about where the line should be.

  • Rotten Meat Vendor||

    So in your world of tradeoffs there is a huge number of people that eat raw, spoiled meat that couldn't tell otherwise?

  • ||

    But everything is a balance.

    So, when it comes to regulating stuff you like, there are tradeoffs to be pondered, but when it comes to regulating stuff you don't like, well, "if it saves one life"?

  • Tony||

    I said everything's a balance and I mean it. You're the guys who can't see shades of gray in anything. Which is not surprising given a political philosophy that amounts entirely to the apelike grunt "government = bad."

  • ||

    Coercion = bad. Just so happens, coercion is the only arrow in the government's quiver.

  • Blacksmithing||

    Actually, it's "big government = bad." I'm okay with a small government that sets a few rules.

    The moment I mention reducing regulations, though, some littlebrain usually pipes up that I should just move to Somalia.

  • Red Rocks Rockin||

    I said everything's a balance and I mean it. You're the guys who can't see shades of gray in anything.

    Bullshit. At least the libertarians on here have come out in favor of limited government, and it's pointed out to you time after time after time. There isn't any function of society that you can't see some sort of government regulation applying to, which probably stems from your slavish devotion to the academic class, which has gotten off on authoritarian use of power for decades now.

  • ||

    And after wiping your chin off you grunt tastes great!

    Governemnt that is TOO large and does not fear the people is bad Tony. Like it or not the founding fathers knew more than you will ever be caplable of. And thank you for proving that every day.

  • EDG reppin' LBC||

    Why would you buy rotten meat? Are you mentally challenged?

  • ||

    Let them eat cake (or rotten meat).

  • The Ingenious Hidalgo||

    Selling rotten meat as fresh meat is fraud. I'm not sure that selling rotten meat with a label on it saying "this meat is rotten" is even illegal.

  • Tony||

    So what onerous regulations are we talking about?

    I'm all in favor of doing away with any that stifle profitability while doing nothing to protect consumers or the public.

  • Y-not||

    Statist is being tricksy, wicked, and false. It is a lying stinker. Shun it.

  • The Ingenious Hidalgo||

    Minimum wage etc.

  • Tony||

    What would eliminating minimum wages accomplish except increasing employer profits while decreasing worker pay?

    If you think it's a strategy for increasing employment, a) there's no evidence it would and b) what makes you think we could win a race to the bottom with a country with a billion people?

  • The Ingenious Hidalgo||

    Tony just said there's no evidence that price floors create surpluses. Fun times.

  • Tony||

    States with high minimum wages do not necessarily have poorer labor market outcomes. That is, there isn't even a correlation, let alone a causal relationship.

  • Gojira||

    Tony, if the "race to the bottom" was real across all sectors of the economy instead of just a few select ones, we'd all be making min. wage right now except for a few highly skilled & trained professionals.

  • The Ingenious Hidalgo||

    Yes, there's pretty much mainstream agreement now that the effect of minimum wage is dominated by other factors. So what? Increasing the price for something decreases demand, or are you implying supply and demand don't apply in the labour market for some reason?

  • A Serious Man||

    I dunno, there seems to be a lot of inner city kids that could use the discipline and valuable life lesson of learning how to hold a job rather than falling into gangs and criminality.

  • Hmmm||

    It all depends. Minimum wage is essentially subsidizing one worker's pay with another worker's pay.

    Henry Ford paid his machinists and assembly workers many times the going wage because he knew that the value of their work was directly related to the success of his business. If he had to pay janitors more than the value of their work (via min wage), the machinists would have to be paid less for the value of theirs to make the same profit.

  • Old Mexican||

    Re: Tony the ignoramus,

    What would eliminating minimum wages accomplish except increasing employer profits while decreasing worker pay?


    There's no reason to believe that getting rid of the minimum wage will result in an automatic decrease of a worker's pay. It could instead mean that an employer can finally afford to hire an extra hand.

    If you think it's a strategy for increasing employment, a) there's no evidence it would[...]


    Yes, there is - it's called Marginal Utility.

    and b) what makes you think we could win a race to the bottom with a country with a billion people?


    What makes you think a minimum wage helps? The "race to the bottom" does not have to manifest itself in lower wages only - it will manufest in other ways whether you like it or not. The only way you can have a totally enclosed economy is to practice North Korean Juche - if so, I hope you like eating grass.

  • ||

    Maybe free job training in exchange for labor as opposed to paying hundreds of thousands for increasingly useless college degrees. But hey the government subsidizes those so it's great.

  • Arcaster||

    I'm all in favor of doing away with any that stifle profitability while doing nothing to protect consumers or the public.

    When your criteria is that something, anything is being done to protect consumers, you're not using a whole lot of brainpower.

    Douche A "Too many people die in car crashes!"

    Douche B "Let's outlaw cars!"

    Tony "Well, it does protect the public since no one will die in car crashes. Those unintended consequences don't really matter."

  • Tony||

    To the anonymous pussy throwing around big boy words, this is an example of a strawman.

  • Brother Grimm||

    This coming from a man who has proven that one need not complete a full thought before employing circular logic.

  • Arcaster||

    Ad hominem much? I thought it was a pretty good reductio ad absurdum myself. You're the one that set the standard of anything that protects the public.

    About your love for the minimum wage, do you honestly think changes in the minimum wage have no impact on employment? Sure, a business owner might not fire people the day it's enacted, but he'll definitely think twice about replacing that person if/when they leave.

  • Tony||

    The insult wasn't meant for you, sorry.

    There's always a balance between public safety and individual liberty. I think libertarians seriously underestimate the ease with which they intersect.

    On minimum wage, I'd just like to see the evidence. When workers make more, they are able to spend more, increasing customers for businesses overall. An individual business might prefer to make a simple arithmetic calculation and prefer to pay its workers less, but that may not actually produce the most efficiency overall.

    Another way to put this is that if you can't make a profit without paying your workers a living wage (or without poisoning people, etc.), then you don't deserve to make a profit.

  • Arcaster||

    I agree with your last paragraph, but there is no reason for government to get involved. Workers will bolt the first chance they get. Every business has an interest in keeping quality workers. Second, if a business does poison people, either they get sued or no one shops there. Either way, they're going out of business.

  • Tony||

    The labor market, particularly in bad economies, is just not that fluid. With current levels of unemployment, the only thing preventing worker pay from bottoming out due to a huge supply of workers are minimum wage laws. There's nothing to suggest that lowering wages would increase hires--current workers would simply make less, and employers would pocket more.

    And it's just well established and obvious that torts alone can't do the job regulations + torts can. An ounce of prevention... Plus violators never pay the full cost (oil spillers never pay even most of it).

  • Instant Gratification!||

    if a business does poison people, either they get sued or no one shops there

    What about poison that takes many years for its harm to become manifest? The amount of time it may take to discover that a company has caused a bunch of cancer may be greater than the lifespan of the enterprise. Where's the fiscal incentive to avoid harming customers or the public in this case?

  • ||

    The group you roll with by default by supporting government regulation don't take kindly to pejorative use of the word pussy.

  • ||

    In fact maybe you should be more careful in case someone reports you for hate speech. That's a regulation too.

  • ||

    I'm all in favor of doing away with any that stifle profitability while doing nothing to protect consumers or the public.

    Hey, what happened to those tradeoffs?

  • Brother Grimm||

    "So what onerous regulations are we talking about?"

    This could only mean that A) you're new here B) You don't actually read the articles or C) you are indeed as stupid as many claim.

  • ||

    Generally, we're talking about regulations that mandate specific business practices and require inspection and certification in order to avoid fines or open for business.

    Libertarians, as you know, have no problem with the idea of businesses being sued for causing harm to their customers.

  • Tony||

    Which means you're not for smaller government (courts are government), you're for businesses being able to get away with more harm.

    Generally, everything you believe is an inconsistent mishmash of excuses for maximum corporate profitability.

  • Brother Grimm||

    Huh. Smaller is the same thing as none. Go it.

  • Hmmm||

    Tony, the courts have always been an essential part of government - even to Libertarians. The courts are for resolving issues between different parties. They are not there to control our daily lives.

    I can't believe you try to conflate 'courts' with the 'big government' that Libertarians rally against.

  • Tony||

    I know, you want the parts of taxpayer funded government that benefit you, and nobody else gets a say.

    Libertarianism is simple: people and entities with capital get all the government guns to protect their rights, and everyone else gets a "free market."

  • Hmmm||

    The role of government is to prevent individuals from interfering on the rights of other individuals. The free market, ie the ability to trade unrestricted, should be a right.

    Out of morbid curiosity, what do you think 'rights' are?

  • Tony||

    That's a big question. Among them are legal and civil rights, liberties and entitlements granted and enforced by law.

    I don't see how you guys claim to be about more freedom when I clearly believe in many, many more rights than you do.

    As I said, you believe government guns, paid for by me, should protect property and contracts, but all the little people without property or negotiating leverage get fuck all. It makes no sense except as a justification for a power grab by economic elites.

  • Tony||

    The only thing you do give the little people is the promise that if they keep enriching their masters they will catch some of the scraps.

  • Hmmm||

    Haha I love the part where you suggest you are more for freedom because you believe in 'many, many more rights', but don't really list any.

    Here are some fundamental ones (from which others derive) - speech, life, and, yes, property.

    It's a pretty false and arrogant thing to say that protecting the right of property only protects elites. The US, throughout its history, has been characterized by upward mobility because the US protects the property rights of those aspiring to be successful. Even before your whole 'entitlement' era.

  • ||

    Dumb A$$ we alread have laws that would already make you resonsable if you knowingly slod "rotten" meat.

    It is called willful neglect. And your libal for any damage your actions cause at that point. But what the regulations actually do is insulate the guilty and give lawyers and judges work.

  • RoboCain||

    It's illegal to sell rotten meat. And you can't even sell perfectly good meat without USDA approval.

  • The Ingenious Hidalgo||

    Well... that sucks.

  • ||

    Exactly. Instead of requiring USDA approval, how about just wait until someone gets sick and THEN sue them into bankruptcy. If nobody ever gets sick, then their practices (whatever they are) are ipso-facto not causing any harm to the public.

  • Arcaster||

    Or how about this crazy idea? Someone gets sick because they buy food from somewhere, and people start buying their food elsewhere. The courts wouldn't even need to get involved most of the time. Sell me something that puts me in the hospital? You better believe that me, my family, and everyone I know will start spreading the word.

  • wareagle||

    ^^^this. Squared. The folly of liberalism is the belief that people are too stupid and/or lazy to make smart choices for themselves. While liberty inherently carries risk, it also requires personal responsibility.

  • Instant Gratification!||

    Right, but the folly of neoliberalism is the belief that smart choices are always feasible. How is a person to judge whether a food product will give them cancer in 30 years?

  • HermanLame||

    How is the government to do any better? It's made of persons, too.

  • IG||

    Well, the typical answer is that specialists can facilitate choice-making where it's unreasonable to expect an average person to make reasoned choices. That can take the form of compulsion/prohibition, but it can also take softer forms such as labeling requirements or various forms of internal regulation among professional associations.

  • ||

    The real folly of 'liberalism' is this kind of thinking which casts government employees as omnipotent god people who can solve all the dilemma of being mortal for us.

  • entreprenurs||

    simple. Entrepreneurs love making money off of finding solutions. Companies will start up and compete for safety labeling standards. They will make money off of grocery stores that want to select the best products to sell to customers. Customers will come to know the best labels to trust. The free market is full of individuals who would love to make money off of the best solutions to problems. To bad it is a government monopoly.

  • Old Mexican||

    Re: Tony the unthinking,

    Yes perhaps forcing a meat vendor not to sell rotten meat is bad for his business.


    Would you buy rotten meat from a vendor? Wouldn't the vendor figure out that selling bad meat to his clients is bad for business already?

    I don't see in the constitution a right to make a profit by any means you want.


    Neither does the constitution provide a right to blink your eyes. They should hurt by now, don't they?

    Idiot.

  • Tony||

    It's generally accepted that laws can be written to prevent people from harming others.

  • Old Mexican||

    Re: Tony,

    It's generally accepted that laws can be written to prevent people from harming others.


    Yes, there are already laws against fraud. You are avoiding the question, like always:

    Wouldn't a vendor conclude that selling rotten meat to his clients IS bad for business? Why woukd you think otherwise?

  • Tony||

    Because of the ample evidence of abuses that existed prior to and even with regulations. You cannot seriously claim that all abuse would be eliminated by market forces. Since that's the case, you're simply for increasing the amount of abuse in the name of the freedom that comes with deregulation.

  • Brandon||

    Has all abuse been eliminated by regulations?

  • Brother Grimm||

    The important question is has ANY?

  • Tony||

    No, which is what I just said.

    The head-smacking claim here is that abuse would remain the same or go down without regulations. If abuse exists at all, which it does, how can you possibly make this claim?

  • Brother Grimm||

    Which somehow translates into more will be better. Got it!

  • The Ingenious Hidalgo||

    Oh, Tony's got us here. His policy has fucking upsides. Now we just have to ignore the costs, and hey presto! paradise.

  • Tony||

    You're the one ignoring costs. Which costs society more, enforcing a food safety rule, or the additional medical and funeral costs that would exist without it?

  • The Ingenious Hidalgo||

    The first one.

  • Old Mexican||

    Re: Tony,

    Because of the ample evidence of abuses that existed prior to and even with regulations.


    That argument is as phony as the "study after study" boilerplate often cited by people on TV who read none.

    You cannot seriously claim that all abuse would be eliminated by market forces.


    Yes, I can seriously make that case. Remember the Tylenol case when someone had placed cyanide in a few bottles? Tylenol immediately pulled the product out of the shelf, developed a sealed cap and re-released the product back into the market. Now people expect to see such seals in all their over-the-counter medicine - NO laws or regulations required.

    Since that's the case, you're simply for increasing the amount of abuse in the name of the freedom that comes with deregulation.


    But that's not the case, your clumsu strawman notwithstanding.

  • Tony||

    For the sake of argument I'll ignore the role the FDA played in the Tylenol case and acknowledge a public image-based motivation for Johnson & Johnson to act on its own. That doesn't mean market forces (and torts) alone will be the same as or better than a combination of market forces, torts, and regulation.

    There is a larger principle at work. Businesses are not accountable to the public at large. The government, to at least some extent, is--and it's the only institution that is. You can't assume that acting in the public interest is always going to be in a business's self-interest.

  • HermanLame||

    Right, it's not like they have customers or anything. They just magically shit money, which permits them to occasionally poison a person when they're stupid enough to stop apparently filter feeding and buy their rotten meat.

  • ||

    You're fucking retarded if you think the government is accountable to the public. Or were you asleep for the ten years that Bush was in office?

  • ||

    "and even with regulations" Guess the regulations weren't working too well then. I know, I know, because there aren't enough of them. When something fails, subsidize it more. The opposite of how the market works and yet somehow better.

  • ||

    Most consumers have a nose.

  • ||

    You mean, laws that punish people before they have actually done anything to cause harm.

  • Tony||

    How is it punishment to say the food you sell to the public must meet certain safety requirements? Not being able to poison people is punishment?

  • EDG reppin' LBC||

    Why would you purchase food that was unsafe or poisonous?

  • Brother Grimm||

    He would if his betters told him to.

  • Tony||

    How would I know it was safe? Would I be sure every single time I purchased food?

    That little government sticker provides a lot of convenience in people's lives, not to mention preventing a lot of needless death and illness. That is MORE FREE than the alternative you propose.

  • Brother Grimm||

    So the government tests every single piece of food available for purchase? That must take a while.

  • Gojira||

    That little government sticker provides a lot of convenience in people's lives, not to mention preventing a lot of needless death and illness. That is MORE FREE than the alternative you propose.

    That's just retarded, and you know it. The gov't doesn't inspect everything; they slap those stickers on tainted shit all the time, only to find out about it after the fact.

    You're also assuming that absolutely no private organizations would spring up to offer their *seal of approval* on food items if the gov't did do it. Because you know what? Consumer Reports, Consumer Digest? They don't exist.

  • The Ingenious Hidalgo||

    And if a private watchdog screws up, it loses its reputation, which is what it trades on. The government screws up... well, it still gets paid because if it doesn't, you're going to jail.

  • Whahappan?||

    Oh sure, try to BS us with some shit about UL while you're at it. We see right through you.

  • EDG reppin' LBC||

    Anecdote: I went to Whole Foods about a month ago to purchase some seafood for my Sunday bouillabaisse. It was a warm day, and when I walked into the store I could smell the seafood counter by the front doors. When I got back to the counter, the clams looked terrible (open shells), the scallops were breaking down, and the fish was floating in 1/2 an inch of water. I didn't think it was safe. I left the store and drove to Costa Mesa to buy a better quality of fish (Santa Monica Seafood). I got some incredible fish, clams, shrimp, and scallops. They looked fresh, smelled fresh, and tasted delicious. I didn't need a government inspector to tell me to go buy better quality fish. I figured it all out on my own. Santa Monica Seafood got my dollars, and Whole Foods lost a customer. The market works.

  • Old Mexican||

    Re: EDG reppin' LBC,

    You have to understand the root of Tony's anti-market stand: He does not want to go through the painful effort of having to make decisions for himself. He prefers the cozy sensation that only a benelovent slave driver can afford to him.

  • ||

    That little government sticker provides a lot of convenience in people's lives, not to mention preventing a lot of needless death and illness.

    Not really cause after the G-Man does "his" thing who knows how the meet was handled or who handled it before it got to your chosen store shelf.

    And yes Tonnettia I can show you how the system works cause I was in it for 7 years.

  • ||

    How is it punishment to say the food you sell to the public must meet certain safety requirements? Not being able to poison people is punishment?

    Being forbidden from selling something because yoy have not obtained the correct permissions is punishment.

    Why is it the role of the state to check food for quality? Why isn't it the role of (say) the supermarket chain or the distributor? Why would a distributor buy rotten meat? Why would a supermarket buy rotten meat? Why would either of these buy from a source that sold them rotten meat in the past?

    Your hypothetical relies upon a string of tenuous conjectures. Not only does the butcher have to be willing to sell poisoned food, but everyone in the supply chain has to be willing to buy it.

    Finally, I see no reason why the food industry couldn't set up it's own internal inspection regime, administered by some sort of food industy professional society and paid for by annual dues. Then consumers could simply choose whether to shop at a supermarket that was or was not a member of this society.

  • ||

    What people like him don't consider is that all the funding that goes towards the regulation agencies by force is taken out of the productive market which operates by consent. Then when a recession occurs they blame the non-existent free market and say we need even more regulation.

  • ||

    "So what? Making murder illegal is bad for the hit man business."

    Uh... if murder was legal, I wouldn't get paid nearly as well.

  • MJL||

    Tony, the rotten meat example is a poor example. Butcher shops are much closer to the perfectly competitive end of the market power "spectrum". Surely you must know this? You weren't deliberately being disingenuous, were you? The last thing a butcher wants is to make his customers sick. The food inspector might be a different story, though. If large numbers of people get sick from rotten meat, they would probably need to hire more inspectors. A nice outcome if you're a bureaucrat looking to move up in seniority.

  • ||

    Yes, regulations stifle small businesses and start-ups the most by far.

    So much this. A layman trying to get through the bureaucratic maze to start even a restuarant or gift shop can be forgiven for getting discouraged.

    And lets not forget that the costs of regulatory compliance are complete deadweight losses to business, and can easily turn a good business into a marginal one, and a marginal one into a dead one.

  • MJL||

    Penguin...until a progressive is in a position to be affected by those regulations: http://thomas.loc.gov/cgi-bin/.....04JN2-163:

  • ||

    "Live Free or Die"

    I think it's time for all of us to die.

  • Restoras||

    Or die trying to live free.

  • Wake up!||

    Time to die.

  • The way i'm livin'||

    There is no compromisin it.
    Better get ready for another surprise, and it may leave a mark because I'm comin' in fast.
    Puttin' thoughts in your mind
    and droppin' plates on your ass.

  • Barry Loberfeld||

    From HERE:

    … What does Ralph Nader's denunciation of "corporate socialism" concede except that the corporations owe their current privileges, not to laissez faire, but to government intervention? Which leads us to now ask: What exactly is the "capitalism" of these anti-capitalists? Is it "Little England"-ism or mercantilist imperialism? Free trade or protectionism? Laissez faire or interventionism -- A or non-A? Just as theocracy cannot denote both the union and the separation of Church and State, so capitalism cannot be both the union and the separation of Firm and State.


    Orthodox Marxism cynically -- amorally -- rejected the possibility of neutrality and equity in political matters. All government was the special interest of one "class" or another. Just as capitalism ushered in the rule of the bourgeoisie, so would socialism bring about the "dictatorship of the proletariat." But how does capitalism -- that is, the free market -- represent the special interest of "capitalists" (i.e., nonmanual laborers)? If respect for property rights favors "capitalists," then why do corporations seek subsidies (each for its own self, mind you, not for the entirety of its purported "class")? If unregulated commerce leads to monopolization by these "capitalists," then why do real-world businessmen turn to government to provide them with monopoly entitlements (optimally, only for their own company, not for all "capitalists" including their competitors)? And if free trade benefits this class and no other, then why do each country's business leaders -- and union members -- lobby for tariffs on imports? We seem to forget that the classical liberals formulated their principles of private property, laissez faire, and free trade -- rejected by the Left and Big Business alike -- not against the graspings of the have-nots, but in opposition to policies that favored the few over the common good. …
  • small busines owner||

    I should thank the regulatory structure of America. I would have never discovered what a wonderful place Singapore is to live but for its attempts to shut me down in favor of big monied interest rivals.

  • BakedPenguin||

    Also, while you can question its methodology, the Heritage Foundation's Economic Freedom Index ranks the US as 9th. I suspect we're not gaining ground, either

  • juris imprudent||

    There is a big flaw in the Europe is more mobil argument - the income curve is narrower. So for any absolute change in income, you are more likely to jump quintiles; whereas that same change in the U.S. distribution could leave you in the same one as you started.

  • A Serious Man||

    Most of Europe is a shithole anyway. Maybe they're supposedly 'happier' because they know nothing else, but I certainly would never want to live there.

  • Gojira||

    Like anyplace else, it has it's good and bad areas, but I would certainly say the average Frenchman or Englishman lives somewhat worse off than the average American (IME).

    Of course, the resident Europhile will tell you that their being freed from the slavery of consumerism due to not being able to afford as much shit is what actually makes them happier, and really, isn't it better that we all live in smaller homes and apartments, many of which don't even have elevators? Reduces the carbon footprint after all!

  • A Serious Man||

    I have no problem with people being content with living in a cramped, dingy apartment with no central heating and shopping at grocery stores that offer little choice or quality. To each his own. Just don't force me to do the same because of your arrogant assumption that you know what's the best life for me and that's why I loath liberals much more than I do conservatives.

  • ||

    I've been to Europe (particularly western Europe) many, many times, and the only country where I found decent communities was Portugal, funnily enough. Germany blew, but not as badly as Spain, where everything two miles outside Madrid looked like Cyprus in the 1950s, which actually made France, grey and decrepit to such a degree it made me metaphorically shit bricks (I'm not sure if all of western France is this bad, but whatever), a pleasant sight, since at least there the roads didn't look like a legion of intoxicated paraplegics had laid them.

    Let's lock out Detroit and Chicago, and we've got ourselves a country that's a fucking paradise by comparison.

  • Old Mexican||

    Re: Tony the ignoramus,

    What would eliminating minimum wages accomplish except increasing employer profits while decreasing worker pay?


    There's no reason to believe that getting rid of the minimum wage will result in an automatic decrease of a worker's pay. It could instead mean that an employer can finally afford to hire an extra hand.

    If you think it's a strategy for increasing employment, a) there's no evidence it would[...]


    Yes, there is - it's called Marginal Utility.

    and b) what makes you think we could win a race to the bottom with a country with a billion people?


    What makes you think a minimum wage helps? The "race to the bottom" does not have to manifest itself in lower wages only - it will manufest in other ways whether you like it or not. The only way you can have a totally enclosed economy is to practice North Korean Juche - if so, I hope you like eating grass.

  • Tony||

    I said evidence, not econ 101 vocab word. There is no evidence of a causal relationship between minimum wage laws and job market outcomes.

  • Old Mexican||

    Re: Tony the ignoramus,

    There is no evidence of a causal relationship between minimum wage laws and job market outcomes.


    There is evidence of that casual relationship, in case you haven't figured it out: Why do you think so many undocumented immigrants find jobs so readily? And before you start ranting about employers' greed or whatever, YOU were the one that said that "there's no casual relationship between minimum wages and market outcomes" - you can't have it both ways.

  • Tony||

    Certainly employers often want to pay workers as little as they can get away with, since they are not operating from a macroeconomic perspective. I'm not sure what your point is. Mine is that a minimum wage doesn't mean there is higher unemployment than there would be without a minimum wage.

    You are not making an argument against a minimum wage. You're making an argument for maximum employer profits and calling it freedom.

    You believe people should be free to make as much profit as possible without anything getting in the way except laws against force and fraud. I believe workers should be free to acquire basic needs, and a minimum wage ensures that.

  • Arcaster||

    A) Everyone is free to acquire basic needs, but your beloved government is the biggest impediment.

    B) A minimum wage ensures that? What are you on? Here's my question to you, why don't we set the minimum wage much higher? Why not set it at $15.00/hour? You know why? Because then people would be getting fired left and right.

  • ||

    I don't believe you are really this dumb Tony. We're NOT arguing in favor of employers maximizing their profits. We're arguing that leaving people free to make their own decisions results in more optimal outcomes, and that interfering in these voluntary relationships results in a detriment to human welfare.

    There is plenty of evidence that increases in the minimum wage do decrease employment. You might argue that the gain to those who remain employed more than offsets the loss to those who cannot find work. However, I would argue that it's basically unfair to interfere in the market in a way that benefits some at other's expense. Even if a 10% minimum wage increase only causes a 1% decrease in employment, that's still fundamentally unfair to the 1%.

    Moreover, you might consider the fact that if the unemployment rate goes down, wages tend to rise. So you employ a large number of people at low wages, it sucks up the unemployed labor into *some* producive endeavor, and now employers have to fight harder to retain workers. Overall the economy benefits because at least these people are producing something instead of remaining on welfare or unemployment.

  • Tony||

    Even if a 10% minimum wage increase only causes a 1% decrease in employment, that's still fundamentally unfair to the 1%.

    Again, there's not evidence for this kind of causal relationship. Even if there were, such calculations are not always immoral. Is removing corn subsidies unfair to the corn harvester job market? It's not necessarily the case that people put out of work due to changes in policy should have their interests take priority. We've had minimum wage laws for a long time, through periods of high unemployment and when we've had a fully supplied workforce. The benefits seem to outweigh any marginal issues.

  • HermanLame||

    The corn subsidy was already unfair to begin with, to the rest of the workers forced to subsidize it, because they're the ones having force (an immoral action) initiated against them. It isn't unfair to undo injustice, just like it's not unfair to imprison thieves.

  • Old Mexican||

    Re: Tony,

    Certainly employers often want to pay workers as little as they can get away with,


    Just as you would try to get the best price possible from anything, or do you have the habit of offering to pay more than asking price?

    since they are not operating from a macroeconomic perspective.


    Nobody does, Tony. That's a chimera only socialists and the economics ignorant still hold.

    Mine is that a minimum wage doesn't mean there is higher unemployment than there would be without a minimum wage.


    I just showed you that it does. Without the minimum wage, there would be less demand for immigrant labor.

    You are not making an argument against a minimum wage. You're making an argument for maximum employer profits and calling it freedom.


    What kind of nonsense is this? A business always seeks to maximize their profits regardless of the existence of the minimum wage, so your contention is nothing more than dwelling on irrelevancy.

    You believe people should be free to make as much profit as possible without anything getting in the way except laws against force and fraud.


    Even if this were true, so what? As long as a business delivers a product or service at a price the customer likes, wthout relying ion theft, aggression or fraud, why would it be immoral for it to do so?

    I believe workers should be free to acquire basic needs, and a minimum wage ensures that.


    Everybody is free to adquire anything they want. What they are not free to have is someone else's money.

  • Tony||

    Nobody [operates from a macroeconomic perspective], Tony.

    Except policymakers. That's why they're useful to have around.

    Without the minimum wage, there would be less demand for immigrant labor.

    But say what you mean: everyone would be getting the pay of migrant workers.

    your contention is nothing more than dwelling on irrelevancy.

    I don't think it's irrelevant that libertarian economic beliefs happen to almost totally align with short-term corporate interests. But we digress.

    As long as a business delivers a product or service at a price the customer likes, wthout relying ion theft, aggression or fraud, why would it be immoral for it to do so?

    It wouldn't as long as no external costs are imposed.

    What they are not free to have is someone else's money.

    I agree. The thing is, you want government guns to determine who owns what money, but those guns can't be used to make sure people don't starve. Well, not you, because you think individually owned guns alone are enough to maintain an orderly society free of force and fraud.

  • Arcaster||

    Here you go, motherfucker.

    http://www.realclearmarkets.co.....emplo.html

    How's that for evidence? 12% of their total employment lost their jobs due to your precious minimum wage.

  • Tony||

    I don't see any data in that opinion piece.

    Found this by googling.

  • Arcaster||

    Step 1) Minimum wage doubles
    Step 2) Thousands of people lose their jobs because of it.

    What more data do you need?

  • thirtyandseven||

    This is what blows my mind. If there "is no causal relationship", then the minimum wage needs to be $100 bucks an hour. JUST THINK OF HOW MUCH SPENDING THIS EXTRA INCOME WILL STIMULATE!!1one!!

  • ||

    Here you go Tony. Enjoy!

    MINIMUM WAGES, LABOR MARKET INSTITUTIONS, AND YOUTH EMPLOYMENT:
    A CROSS-NATIONAL ANALYSIS - David Neumark and William Wascher - March 2003

    Abstract - "We estimate the employment effects of changes in national minimum wages using a pooled cross-section time-series data set comprising 17 OECD countries for the period 1975-2000, focusing on the impact of cross-country differences in minimum wage systems and in other labor market institutions and policies that may either offset or amplify the effects of minimum wages. The average minimum wage effects we estimate using this sample are consistent with the view that minimum wages cause employment losses among youths. However, the evidence also suggests that the employment effects of minimum wages vary considerably across countries. In particular, disemployment effects of minimum wages appear to be smaller in countries that have subminimum wage provisions for youths. Regarding other labor market policies and institutions, we find that more restrictive labor standards and higher union coverage strengthen the disemployment effects of minimum wages, while employment protection laws and active labor market policies designed to bring unemployed individuals into the work force help to offset these effects. Overall, the disemployment effects of minimum wages are strongest in the countries with the least regulated labor markets."

    Conclusion - "In general, our results provide evidence that minimum wages tend to reduce employment rates among the youth population. A clear negative correlation between the level of the minimum wage and youth employment-to-population ratios appears both in the raw data, and in time-series cross-section regressions relating employment rates to minimum wages, with controls for overall economic conditions and cross-country variation in labor market policies and institutions. The disemployment effects also appear in models that control for country-specific factors (including country-specific time trends), indicating that the results are not solely driven by cross-country differences in minimum wage levels and youth employment rates."

    Link: http://www.federalreserve.gov/.....323pap.pdf

  • Tony||

    That's an interesting study about teenage employment. I was talking about overall employment, but I suppose it makes sense for minimum wage to be correlated with employment among people who tend to make minimum wage. I say teenagers should be in school.

  • Sevo||

    Tony|1.6.12 @ 8:05PM|#
    "That's an interesting study about teenage employment. I was talking about overall employment,..."

    Yes, shithead, you keep the goalposts on wheels, don't you, shithead?

  • ||

    Er. Nonsense. There is plenty of evidence that minimum wages decrease employment. Yes, there have been a few studies that liberals like to cite that throw that into question, but that's not to say that there isn't a lot of events that they do decrease employment.

  • HermanLame||

    The one I see cited most frequently is the one from the 90s with McDonald's workers in like, Jersey or CT or something. What you don't see cited as much are the 40 or so papers in response to that one which annihilated said paper.

  • first||

    Keity is one of the top models from Brazil and it is instantly obvious that the title is well deserved.
    .

    SHE HAS a classic body, raven black hair, big luscious eyes, and a sensual voice to complete the picture. At only 21 years of age she claims to have had enough of boyfriends and wants to spend time focusing on her modeling career. She knows when its time to get down to business and doesn’t have room for men who only get in her way.

    Petter spent an entire day shooting with Keity while visiting Florianopolis. Posing next to gigantic trees and wide open spaces one is instantly reminded of a modern Amazon, strong and demanding of our attention.

    Keity has the kind of body that rivals the grand nature of any landscape and is a true example of the beauty one can only find in Brazil.

    http://www.hegre-art.com/models#action=show&id=97

  • ||

    a sensual voice to complete the picture

    Talking pictures?

  • first||

    Indeed

  • killazonthe run||

    Hey, Tony, if you love the regulatory state so much, then why don't you marry it. Oh, that's right, the regulatory state wont let you marry the gender of your choice.

  • Tony||

    Because in order to be in favor of having a state, I must be in favor of everything the state does at all times?

  • Shorter Tony||

    Derp.

  • Sevo||

    Tony|1.6.12 @ 5:53PM|#
    "Because in order to be in favor of having a state, I must be in favor of everything the state does at all times?"

    No, shithead. It's because you defend *everything* a state does.

  • Tony||

    It only seems that way because I'm on a libertarian site and their only solution for everything is to reduce the role of the state.

  • Red Rocks Rockin||

    It only seems that way because I'm on a libertarian site and their only solution for everything is to reduce the role of the state.

    Considering how much we're spending per capita today versus 60 years ago, a reduction is exactly what's in order.

  • Tony||

    Why?

  • Brother Grimm||

    Because we are getting less, paying more, and and sacrificing liberty to do it. Where the hell have you been?

  • J_L_B||

    Another liberal inconsistency: capitalism (or corporatism) leads to corporations having outsized influence on the government to the deteriment of the public. Nevertheless, liberals often advocate for nationalizing industries that exploit the public (see oil industry) effectively merging the corporation and the state.

    What mechanism do they think exists that will ensure nationalization isn't absolute corporate control of government? Further, with completely aligned interests, what difference would it make what entity was in control?

  • A Serious Man||

    Because they believe that we just need the "Right People" to be in charge of the economy and all will be well. Of course, it operates from the Marxist assumption that all workers have the same interests and that individuals will never ever develop beliefs and preferences that contradict the will of the collective proletariat.

  • Paul||

    Democracy is that mechanism.

  • HermanLame||

    I lol'd

  • ||

    Biggest concern with this article? A misunderstanding of the term "corporatism". It does not mean "government favoring corporations". Whatever merits Richman's argument might have, I'm just dumfounded that someone getting an article published in Reason would use a term like corporatism without knowing what it means.

  • Old Mexican||

    Re: Tony,

    Because of the ample evidence of abuses that existed prior to and even with regulations.


    That argument is as phony as the "study after study" boilerplate often cited by people on TV who read none.

    You cannot seriously claim that all abuse would be eliminated by market forces.


    Yes, I can seriously make that case. Remember the Tylenol case when someone had placed cyanide in a few bottles? Tylenol immediately pulled the product out of the shelf, developed a sealed cap and re-released the product back into the market. Now people expect to see such seals in all their over-the-counter medicine - NO laws or regulations required.

    Since that's the case, you're simply for increasing the amount of abuse in the name of the freedom that comes with deregulation.


    But that's not the case, your clumsu strawman notwithstanding.

  • ||

    Laissez faire markets won't be possible until the fundamental socializations of risk of state-limited liability and state bankruptcy are removed. The regulatory state exists at least partially to prevent the harms of government-created moral hazards where victims and societies are left holding the bag for corporate actions.

    Reducing fraud and force via full assignment of liability, clarifying and reducing the scope of government interventions, stabilizing currency, naturally disincentivizing debt and risk, political localization and reducing all legal barriers to entry into businesses or professions are the best ways for the poor to become more economically mobile, but it's more fundamentally invasive than simply reducing the scope of the regulatory State.

  • Sku||

    Isn't saying America has less upward mobility than Canada or Western Europe basically saying it has less downward mobility? I mean, if people in the lower half are replacing people in the upper half...than the upper half are coming down, right? I mean, income percentiles are in 100% terms; it's not an expanding pie like the economy. 100% of people can't be in the the top 25%. So someone is coming down if someone in the bottom 25% is going up to the top 25%. The real quesiton is - how much does the average person make? How well of are they?

  • ||

    If you are in the bottom quintile, the chances of your being incarcerated are high in this prison-happy society; once that happens, your upward mobility is limited; you're not going to get a six-figure income without passing a background check.

    In addition, the bottom quintile usually go to government schools in the inner cities, which are terrible; they only serve to perpetuate ignorance.

  • Paul||

    If that's not a reason to finally take steps to properly fund our education system I don't know what is.

  • Blacksmithking||

    How do you define proper funding?

    If home schools and private schools can produce students with a better education than public schools, perhaps the problem isn't funding?

  • ||

    So I take it the 10-15 thousand we spend per student isn't enough?

  • Robert||

    So, Sheldon, you're saying in this and the Freeman article (which I'd previously been unaware of, thanks) that deviations from free enterprise are incommensurate? That in practical comparisons, they can never be understood as differences in degree, only in kind? So there's perfection, and then everything other than that is indistinguishable?

    That's got to pretty much paralyze you in the evalu'n of the vast majority of reforms! Leaves you pretty agnostic when faced with any empiric study of results of real world policies too.

  • The Ingenious Hidalgo||

    Leaves you pretty agnostic when faced with any empiric study of results of real world policies too.

    That is the only rational state to be in when there are no control groups.

  • Bob||

    Well we're all thinkin it, did the study control for black people? What would happen if it did?

  • ||

    Does your girlfriends rate of orgasms control for black penis?

  • Brett||

    I don't know about Europe but the Canada has had faster economic growth and higher income mobility. During the last 15 years Canada has gone from the 12th freest economy to the 8th while the US has dropped from the 4th to the 10th. Canada did reduce governmet between 1995 and 2006, and while Canada has turned to Keynsianism the it has not been near US spending. Canada also has seen the dollar strengthen and become more stable since the 1990's with current policy based around preserving 1-2% inflation as opposed to stimulating economic growth then contracting.

  • Kloveniersburgwal||

    Just to change the subject for a minute. I haven't noticed any White Injun in these comments the past days but everyone here knows it is only a matter of time before his white gambolin ass makes another mess of these boards. Yes, I know the best way to deal with him is to just ignore. But I just happened to discover who he actually is. I dont know if others have mentioned his real name, but it is not too hard to find. He has at least one particular incident that is shady to say the least. He doesn't mind informing drug agents when it suits him. Maybe it is more distraction, but if he pops up here again he should be at least given a name.

  • Joe||

    I was just wondering if this data indicates that fewer members of the American middle class falls into the bottom 1/5th (the poor). Not sure if you can draw that conclusion from the data, but it stands to reason that if someone moves out of the bottom fifth, someone from the middle is now in the bottom fifth.

    I mention this not because it seems like a good way to judge the economic health of a country (as the author points out), but only because I wonder if the facts had been reversed would we have read a headline "When Compared with Canada, Europe More Americans Fall Behind."

  • Ludovici||

    At the risk of offending most, perhaps in the US people are simply more likely to be born into the quintile that matches their level of talent? The US has been perceived to allow more economic opportunity to individuals than Europe for the last 250 years (~10 generations). Marriage partners are typically more similar to each other than the general population in many ways, probably including aggregate talent. This suggests lineages will tend to move towards their appropriate economic quintile, of course with lots of random movement on the way. If Europe has only had equivalent levels of opportunity for the last 2 generations, that would suggest they still have plenty of room for improvement in matching talent to incomes.

  • ||

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  • Sven||

    "... I see no grounds for thinking that we necessarily have it better than the Germans do in every possible way ..." Sheldon, you should not use examples you know nothing about. Compared to Germany, the US by now looks more like a 3rd Wold country, your infrastructure is a piece of shit compared to Germany, and I currently do not see how you want to get those unemployed masses back into real jobs, since you massacred your on domestic manufacturing, while Germany is the world's export leader. Health care in Germany costs 50% less as a share of GDP compared to the US, and is simply better, both for the average person, and for millionaires who come from all over the world to get surgery or cancer treatment in Germany. As an American, you have a constructional right to be ignorant, but sometimes you should follow the old German saying: "If you don't know shit, you should shut the fuck up"

  • Bradley||

    Looks like you need to work on your English reading comprehension, Sven.

  • Sven||

    make that constitutional, not constructional, stupid Google spell check

  • ||

    Interesting article. There is a lot of progress to be made in the US.

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