Do Free Markets Lead to Fairer Wages?

The financial crisis appears to have awoken a host of Bolsheviks from their post-cold war slumber. Free markets and deregulation have been blamed for everything from the housing bubble to the Gulf oil spill.

This is, of course, nothing new. Check out the December 1975 issue of Reason, where Charles G. Koch wrote: "Anti-capitalist feelings in the United States are probably more virulent today than ever before." But there's mounting evidence that free markets aren't just more efficient than more controlled economies, they're fairer too.

In March, Reason's Ronald Bailey wrote about a study from the University of British Columbia, which shows a direct correlation between market institutions and how fairly people treat one another.

Now, a new study from Purdue University suggests that free markets may also produce fairer wages:

The conventional wisdom is that the free market for labor, which determines the pay packages, cares only about efficiency and not fairness. We present an alternative theory that shows that an ideal free market environment also promotes fairness, as an emergent property resulting from the self-organizing market dynamics. Even though an individual employee may care only about his or her salary and no one else's, the collective actions of all the employees, combined with the profit maximizing actions of all the companies, in a free market environment under budgetary constraints, lead towards a more fair allocation of wages, guided by Adam Smith's invisible hand of self-organization.

From the press release:

In the new work, the researcher has determined that fairness is integral to a normally functioning free market economy.…

His theory describes how goal-driven "rational agents," or people, will behave in a free market economic environment under ideal conditions.

"The bottom line is that the free market does care about fairness," he said. "Clearly, the next step is to conduct more comprehensive studies of salary distributions in various organizations and sectors in order to understand in greater detail the deviations in the real world from the ideal, fairness maximizing, free market for labor."

More on how free markets make people more generous and a new report that shows Americans are more giving than Canadians thanks, in part, to the Canadian welfare state.

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  • Old Mexican||

    Do Free Markets Lead to Fairer Wages?

    What?

    Fairer for whom, besides the employer and the employee who mutually and voluntarily accept the wage?

  • Old Mexican||

    Free markets and deregulation have been blamed for everything from the housing bubble to the Gulf oil spill.

    Authoritarians always blame freedom for the failings of their own experiments - oh, those pesky free-willers, if they would only do as they are told!

  • ||

    That, or because the government intervention didn't go far enough and spend enough money.

  • mad libertarian guy||

    I'd bet that statists blame the free market for Chernobyl too.

  • ||

    "Fair" means different things to different people. Saying that a free market results in "fairer" outcomes doesn't mean much until you define that term.

    Most people would define "fair" as "paying me more than I get now."

    Oh, and +1 to what OM said above.

  • Some Guy||

    Most definitions of "fair" would mean that people get paid similar amounts for similar work. For example, the more free market oriented an economy is, the less of a wage gap there are between men and women, and between various races.

  • Old Mexican||

    Re: Some Guy,

    Most definitions of "fair" would mean that people get paid similar amounts for similar work.

    The definition is meaningless. The only thing that matters is that the participating parties obtain what they wanted. Whatever an outside party opines is irrelevant - that person cannot read minds.

  • Some Guy||

    You're inventing an argument that no one has made.

    Those of us who want to live in a real free market (as opposed to what we have now) are pointing out that it leads to greater fairness because we expect to be participating parties in various transactions in such a society, not outside parties.

  • Old Mexican||

    Re: Some Guy,

    What I am telling you is that a defence of free-markets should not rely on touchy-feely arguments like "fairness". Free markets are a consequence of personal freedom, which is the ultimate political, moral and ethical goal.

  • Some Guy||

    So it is your opinion that side benefits of freedom that may be able to influence misinformed people should not be used, because they are not the main goal?

    Personally, I could give a fuck less why a given person is in favor of more freedom, as long as they are.

  • ||

    No, the point is that trying to justify freedom based on "fairness" arguments gets you bogged down with leftists who claim fairness, as they define the term, is enhanced by statism and harmed by free markets.

  • cynical||

    It's one thing to say that fairness is something that is highly susceptible to self-interested bias, and as such should be avoided as a primary justification, particularly as it suggests a highly subjective, highly politicized, highly corrupt outcome-driven clusterfuck.

    However, the idea that we should reject the notion of fairness as valuable aspect of a social institution is, frankly, ridiculous. Fairness is just the soft, fuzzy, day to day version of justice. Fairness means people get what they deserve as a result of their choices and actions. There are any number of people (particularly, people who live honest, boring lives), who would rather live in a just society than a free one. Both are desirable aspects. However, as it happens, an unfree society is almost always unjust (and an unjust society will usually end up unfree), so wise members of both groups will remember the value of the other's virtue.

  • CrackertyAssCracker||

    If just doesn't mean the same as free, then it doesn't mean shit. If it does, the stick with free, its harder for the pinkos to perform the old twist-into-the-exact-opposite manuevre.

  • ||

    I'm with you, cynical, an essential aspect of freedom is fairness. Which is to say "equal justice under law". If all individuals are not treated equally, and fairly, under the legal system, then contracts cannot be enforced fairly, and a "free market" as defined by libertarians does not exist.

    However, the problem with leftists is that they only view *outcomes* as fair, unfair, or just. To them "justice" is a matter of results averaging out, every "getting theirs" whether that means an equal share of calamity, or an equal share of prosperity.

    The Libertarian view of fairness however is that the *rules* must be fair. You have to have a fair *system* in which all individuals are treated equally. If fair rules are in place, then nobody can complain about unequal outcomes.

    It's a fundamentally different view of what the meaning of the word "justice" is. Is "justice" rule-equality, or is is outcome-equality? And I don't necessarily mean that leftists thing that all outcomes should be equal, just that they thing that they should average out randomly. I.e. there should be no average outcome differences based on starting economic position, or race, or gender.

  • cynical||

    But the rules being fair is a hypothetical. The rules are a model, akin to a mathematical formula for taking inputs and calculating a "just" answer. Like every model, there's some degree of error.

    We have use our subjective assessment of outcomes to guard against cases where the rules are misconfigured and tend to produce unfair/unjust results. That doesn't mean governing by outcome, so much as it means keeping track of the fairness of outcomes in aggregate to check that the system is working as intended.

  • ||

    But you must admit that the advocates for "wage fairness" -- however defined -- have managed to justify a lot of very unfortunate intervention into the labor markets. What this research appears to show is that, whether your definition of fairness is that two parties freely agreed to the arrangement, or that the tendency of the market is to converge toward, for example, equal wages for equal work, the mechanism to get there is the same: truly free markets. This is an argument that the interventionists should let the moral approach -- in which two parties mutually agree to an arrangement -- do its thing.

  • ||

    See ,that's a point I was going to make downthread ...

    You could approach the wage equality issue by advocating rules that make the market behave closer to the ideal - more transparency, reduce transaction costs (many of which are caused by regulation), etc.

    But the left's solution is always this heavy handed direct intervention - wage controls, equal pay laws. Crap that just inserts a petty bureucrat in the middle of it all.

  • Some Guy||

    But you must admit that the advocates for "wage fairness" -- however defined -- have managed to justify a lot of very unfortunate intervention into the labor markets.

    So the answer is not to show them why that is the wrong approach, and that free markets are a better one?

  • dave c||

    Who the fuck is "we"?

  • kilroy||

    Most people would define "fair" as "paying me more than I get now I'm worth."

  • Jesse Kline||

    "Fair" means different things to different people. Saying that a free market results in "fairer" outcomes doesn't mean much until you define that term.

    This is true. The authors discuss various definitions of fairness in the paper.

  • Old Mexican||

    The conventional wisdom is that the free market for labor, which determines the pay packages, cares only about efficiency and not fairness.

    Wrong on both counts - the market does not have cares, it is just a network. Who cares about the wage levels are only the two parties that negotiate the exchange, NOT ONE ELSE.

  • Mike||

    technically true but for the purpose of the paper irrelevent. They're saying that conventional wisdom holds that the free market, as an intangible, non-sentient entity, benefits from and therefor derivitively strives for efficiency and nor fairness. They just used the word "cares" to make it easier.

  • ||

    "...shows a direct correlation between market institutions and how fairly people treat one another."

    That doesn't fit in with my preconceived notions, so it can't be true.

  • ||

    If only the government treated me as well as McDonald's does when I hit the drive thru...

    If only the government treated me as fairly as Wendy's did when I worked for them as a teenager.

  • ||

    Every employer that has exploited employed me my entire life has been far more benevolent than any level of government I've ever lived under.

  • ||

    Isn't that the truth!

    In my work as a commercial real estate guy, I've done lots of work with various cities and government agencies too, and I would never want to work in those places...

    The pay is good, but the shit the people who work there have to put up with?

    In various office jobs I worked on the way up, the worst possible toxic office atmosphere's were always referred to as "political".

    ...it's like everybody already knows, you can work for a company where meritocracy rules, or you can work in a "political" atmosphere...

    Having to work in a hellhole like that is what certain people get trapped into... People who couldn't cut it anywhere else, people who got their high school sweetheart pregnant...

    I worked in a private hospital for a while, and that was bad enough; I couldn't make it in a union shop or working for the government.

    I'd rather go back to working for Wendy's.

  • Old Mexican||

    Even though an individual employee may care only about his or her salary and no one else's, the collective actions of all the employees, combined with the profit maximizing actions of all the companies, in a free market environment under budgetary constraints, lead towards a more fair allocation of wages, guided by Adam Smith's invisible hand of self-organization.

    Saying that the end result of arriving at the market-clearing price is fair is nothing more than an opinion. It is not more or less fair than arriving at the price of a Lb of tomatoes. It is simply the point where the market clears, where each party arrives at their rational expectation.

    What's REALLY fair is letting people arrive at this point freely. Want to talk about fairness? Talk about freedom.

  • Yonemoto||

    Be patient. I think they will probably introduce deviations in freedom to analyze the net effect on prices. Or at least, that's what I would do next if I had their model.

  • Chad||

    Why is the "market clearing price" fair, when

    1: There are substantial uncertainties in the measurement of the value added by an employee

    2: Luck, genetics, and who-your-daddy-knows is at least as important in this matter as any factors the worker controls.

    Why should we respect what is obviously a flawed measurement?

  • ||

    Chad,

    Assuming there is a market clearing price, it's fair because both parties agreed to it. If no market clearing price exists, and the parties can't agree on a price that BOTH consider fair, the employee doesn't get hired (i.e. no transaction occurs).

    When two parties in a transaction agree on terms that you, an outside party with no economic interest or civil standing, may not like, that doesn't make the transaction "flawed" or unfair.

    Learn to MYOFB.

  • Chad||

    Now, if it could just sink into your thick little skull that outside parties almost always have numerous economic and practical interests in these matters, I'd give you a drop of respect.

  • ||

    And how, pray tell, is it any of your business what anyone else gets paid to do their job?

  • Chad||

    Because no man is an island, no matter how much you wish you were.

  • MJ||

    Which really makes no sense as a criticism of free market economics. Under a free market system, it's not that people have no interdependencies, its that those interdependecies result as freely made associations.

  • Chad||

    No, many of our inter-dependancies are NOT made freely. I have no vote over whether or not my neighbors' ugly gf can have sex at 4am without squealing like a pig, now do I?

    Thank God he never lasts more than about two minutes.

  • Mike||

    Well I guess the extreme libertarian position here would be to call that noise pollution, which he is not allowed to propogate onto someone's property without their consent. Bang, libertarian property rights again!

  • MJ||

    Presumably you chose to live in housing where having to listen to your neighbor's extracurricular activities is an issue. What exactly would want to see done to resolve such an issue?
    Do you want people arrested for having loud sex?

    I do hope that was a sockpuppet Chad being deliberately absurd.

  • ||

    "And how, pray tell, is it any of your business what anyone else gets paid to do their job?"

    "Because no man is an island, no matter how much you wish you were."

    That doesn't answer the question.

    You're getting your butt whipped Chad if that's the best you can come up with.

  • ||

    IMO, "having an interest" that is defined only by you not getting (or selling) the contract or product at the price you want isn't a legitimate one.

    The transaction doesn't tangibally damage your property. It only means that you have to take into consideration that other people choose not to engage in business with you.

    Now you can go on and bring up pollution, but you know the reply to that is Coase.

    My objection is to arguments like "well if he hires that other person at a lower wage that harms me because I don't get the job."

    It doesn't harm you. The other person has just as much right to negotiate to get a job as you.

  • Old Mexican||

    Re:: Chad,

    Now, if it could just sink into your thick little skull that outside parties almost always have numerous economic and practical interests in these matters, I'd give you a drop of respect.

    Of course they exist - they are called rent-seeking parasites; you know, government types. They are enabled by crackpots that rely on such fantastic notions as "market failures" (as sensical as the concept of "evolution failures" when pointing out the non-existence of unicorns) and other quackery.

  • cynical||

    Relatively speaking Chad, since the alternative is a price set by a czar chosen primarily through social networking and politics, as well as a fair bit of, as you call it, who-your-daddy-knows. This czar will be even more removed from the actual labor and thus more unaware of the value added.

    It's the difference between an economy where sometimes shit is unfair and you go somewhere else, and an economy where shit is always unfair, because dumbass leftists keep forgetting that the hypothetical perfect is the enemy of the actual good.

  • Chad||

    Relatively speaking Chad, since the alternative is a price set by a czar chosen primarily through social networking and politics...

    Now, if it would just sink it that this is not the "alternative", but the reality, we might get somewhere.

  • Mike||

    Of course it's the reality, but the leftist goals are further in this direction... if it would just sing in...

  • Mike||

    sink*

    public education.

  • Old Mexican||

    Re: Chad,

    Why is the "market clearing price" fair, when

    1: There are substantial uncertainties in the measurement of the value added by an employee

    Who gives a shit about that, frontal-lobeless? The only TWO people that do care about the outcome are the employer and the employee, in the same way the only TWO actors who give a shit about a tomato purchase are the housewife who wants the tomatoes and the store. What would the housewife care about the world tomato commodity market? She only wants to have a pound to make soup! What would the employer care about "uncertainties about an employee's productivity"? He just needs to fill the spot with someone that looks the part and who accepts the offer.

    2: Luck, genetics, and who-your-daddy-knows is at least as important in this matter as any factors the worker controls.

    Right. Like making soup, whatever ingredients you happen to like are a matter of YOUR taste. Meaning, who cares what YOU think? It is the voluntary ACTIONS of the two players that matter AT THE SPOT, not YOUR second-guessing games.


    Why should we respect what is obviously a flawed measurement?

    You have a knack for making such clumsy strawmans... Almost brings me to tears.

  • ||

    Coincidentally?

    I recently read about a cross cultural study that said that societies with authoritarian central governments tend to feature corporal punishment for children more prominently.

    It suggested that the more parents have to bow to authority to do well, the more they teach their children to bow to authority at home.

    Statism promotes child abuse, in other words.

  • ||

    Just for the record I found it...

    "These findings are consistent with our theory that societies are likely to practice corporal punishment to prepare children for living in a society with native or imposed (e.g., colonial) power inequality."

    http://www3.interscience.wiley.....p;SRETRY=0

    So, yes, strictly speaking, I think it's safe to say that Progressives a) promote policies that lead to unfair wages and b) Progressives are disproportionately more likely to abuse their children.

  • ||

    Actually, strictly speaking, it's probably more accurate to say that, "Progressives promote policies that lead to more child abuse".

    There.

  • ||

    So, yes, strictly speaking, I think it's safe to say that Progressives ... are disproportionately more likely to abuse their children.

    That doesn't seem to comport with my real-world observations. Progressives are more likely to abuse their children by killing them in the womb, but if they get out of there alive, Progressives are likely to avoid any physical discipline, oftentimes leading to spoiled brats who keep seeking boundaries and not finding them.

    Having a quick swat to the okole in your arsenal, broken out on rare occasions when other means are being ignored, makes for much better behaved children.

  • robc||

    oftentimes leading to spoiled brats

    If their kids end up spoiled, they abused them.

  • ||

    It's cross-cultural and peer reviewed.

    People hit their children more, in every culture, with "power inequality".

    Being against "power inequality" is what being a libertarian all about.

    Using teh power of teh state to coerce people to do what's best for everyone? That's what Progressives are all about.

    Ergo, spare the whip + spoil the child = Progressives DJ in teh dance hall.

    Peer reviewed.

  • ||

    Saying that the end result of arriving at the market-clearing price anything is fair is nothing more than an opinion.

    How are they defining "fairness" in these studies, anyway?

  • ||

    I'm guessing it's compensation relative to value added, particularly since the genesis of this study was the theory of over-compensated senior executives.

    It seems sensible enough to me that the over-compensation issue is specific to corporate organizational structure and executive level management and not a systemic flaw in markets in general.

  • Tom||

    Absolutely. The press release that the Jesse links to features the author of the article saying, "In reality, the self-correcting free market mechanisms have broken down for CEOs and other top executives in the market, but they seem to be working fine for the remaining 95 percent of employees."

  • v||

  • Tom||

    Wrong. Read the article. Using obscure econophysics, specifically statistical thermodynamics, the researchers use entropy as their measure of fairness.

  • Mike||

    I was just gonna say "they did discuss how differing opinions on the definition of fairness affected the study" but you used the word entropy, so I won't.

  • rriord2||

    The problem with fairness is that the concept is subjective and not definate. Who is to say what is "fair"?

    I agree that fairness can only be determined through the extended order, but how do you argue with a lefty who is determined that the only fairness that exists is inside his head?

  • v||

    it's not subjective. the amount of fairness in a culture is determined by the average fraction one offers to a stranger in the ultimatum game (the closer the fraction is to 50% the fairer the culture is considered to be).

  • ||

    That's not a definition. It's a *measure*.

  • robc||

    As Tom mentioned, wrong. Some problem with reading the fucking paper?

    Maximizing entropy.

  • The Other Kevin||

    A lot of resistance to free markets are a remnant of a past where we didn't have these two factors:
    1) Access to information. It's a lot harder to exploit/be exploited when you know what a person with similar experience and skills is making in a given geographic area.
    2) Portability. It's way easier these days to apply for a job somewhere across the country, and pack your bags and move there.

  • ||

    "Fairness" & "Justice" are normally just another way to say "My needs first". I almost never hear anyone say "That's not fair!! I got more than everyone else!!" Unless they're a limousine liberal, of course.

  • AA||

    I think a lot of people, particularly on the Left, say "Justice" and "Fairness" when they really mean vengeance.

  • ||

    I guess i do not understand the phocology of envy that tony and chad often spew.

    are they pupets or do the left really feel this way.

    I will admit to wanting what rich people have...but it is more of a jelouse or greed phycology. I do not envy them in that i do not think they should not have it.

    I do not think they have it becouse they took it from me. I either think they were lucky or they earned it. In either case i wish to emulate what they have not take from them to get it.

    I guess my whole problem with this is that i really do not "envy" and i do not understand it.

    In fact they only reason i think it exists at all is because it is one of the deadly sins and there is a definition of it in the dictionary.

    For the life of me i do not know what it is aside from what i have read or been told.

    Am i more human or less human because i do not experience it?

  • AA||

    I guess it all depends on if you view existence in general as a zero-sum game.

  • ||

    I guess it all depends on if you view existence in general as a zero-sum game.

    Ok resources are limited one cannot deny that, but why is the assumption that those who hold control of those resources are not entitled to hold them?

    Obviously if they sucked at managing them then they would lose them...no matter how they got them. Also the envy held by leftists seems to be counter intuitive. The freer the market the harder it would be for established resource holders to hold on, and the more likely that resources will fall into more competent hands.

    The recent bail outs seem the most irrational. GM and Wall street demonstrated incompetence...yet they get a bail out and everyone else gets taxes and strict regulations.

    By the leftist measure the more competent you are in managing your resources then less entitled you are to keep them, and the less competent you are the more entitled you are.

  • ||

    Ok resources are limited

    Well, not really. There is an essentially unlimited supply of energy and material resources in the universe. We are temporarily not able to access more than a vanishingly small fraction of it. If we could capture even 0.01% of the sun's output, that would be an essentially endless supply of energy. If we could mine even 0.01% of the mass of the other planets and moons in the solar system, that would be an essentially endless supply of raw materials.

  • AA||

    I think scarce is a better word for this than limited.

  • Mike||

    While resources may be limited (not by any relevent means 'finite') the free market leads to more efficient use of those resources, benefiting everyone. So, I may not be technically "richer" than my equivalent a hundred years ago, as measured by my percentage of global wealth, but my quality of life is most certainly better.

  • Chad||

    No, the problem is that libertarians believe that all "voluntary" interactions must be positive-sum.

    In reality, they are a mix of positive, negative, and zero sum.

    When you get your head wrapped around that, let me know. And why is it that when libertarians take some absurd extreme view, they usually assume that anyone who disagrees must be taking the opposing extreme view?

  • ||

    Example of a "negative sum" voluntary transaction?

    Just one please.

  • Chad||

    Easy. A stereo sells for $400. You are willing to pay $420 to buy it.

    Great. Positive sum! Yippie! Stereo is bought, and everyone wins.

    Except your neighbors, who are damaged $50.

    Whoops! That's what happens the moment you factor in externalities...

  • Chad||

    Btw, the fact that you didn't know such obvious counter-examples exist says quite a bit about you.

  • ||

    Your neighbours have absolutely nothing to do with the transaction.

    However, they might offer you some amount less than $50 in a separate transaction to not play it above certain volumes at certain times that you can both agree on. Which, if you accept, also becomes a positive-sum transaction.

    I love how easy it is to demolish your feeble arguments.

    It's almost like you took a couple of economics courses in your freshman year, learned a few of the concepts and think you're now an expert.

  • Chad||

    So what are the transaction costs on that? What happens when you multiply it by several neighbors? Who enforces the contract? Who pays for that? And of course, noise pollution is not in the least the only externality involved in this scenario.

    And of course, we are assuming the wonderful world of full information here. In reality, there is a good chance the seller holds a strong asymmetric information advantage over the buyer, and can exploit that advantage via high pressure sales tactics, misinformation, and appeals to instinct over reason that trick the buyer into purchasing something that is a net negative for him.

    Your last paragraph is laughably funny. You are describing yourself precisely. You seem to be extrapolating the idea of Coasian bargaining, which works in some situations some of the time, into the vast world of externalities that are far too diffuse or unenforcable to handle on an individual basis.

  • ||

    "So what are the transaction costs on that? What happens when you multiply it by several neighbors? Who enforces the contract? Who pays for that?

    If the transaction costs are too high, then your neighbor doesn't come to an agreement with you, and he gets to suck it up. Just the way the world works.

    It still doesn't have any bearing on the stereo PURCHASE, which was clearly a positive-sum transaction.

    "And of course, we are assuming the wonderful world of full information here. In reality, there is a good chance the seller holds a strong asymmetric information advantage over the buyer, and can exploit that advantage via high pressure sales tactics, misinformation, and appeals to instinct over reason that trick the buyer into purchasing something that is a net negative for him."

    So? If someone's judgement is poor, why should you care? At the time of the transaction, both parties believe they are gaining more value than they are parting with. If they turn out to be mistaken after the fact, (and there's no fraud involved), that's their tough shit, and still none of your business.

    "Your last paragraph is laughably funny. You are describing yourself precisely."

    Wow... the old "I know you are but what am I?" retort. "Freshman" was far too generous for you.

    "You seem to be extrapolating the idea of Coasian bargaining, which works in some situations some of the time, into the vast world of externalities that are far too diffuse or unenforcable to handle on an individual basis.

    WTF? I gave you a SINGLE example where bargaining could work, in a hypothetical situation that you yourself conceived. How can you possibly accuse me of extrapolating?

    Why can't you admit the bargain is a positive-sum transaction? Oh, because that would involve admitting you're wrong.

  • zoltan||

    Your neighbors are not part of the equation in the first place.

  • Sean W. Malone||

    Yeah... Umm... I'm not seeing it, Chad.

    By the way, I'm a professional musician who has historically practiced at home, and who composes and produces media from home frequently - in an apartment.

    I've done this in multiple cities and to date I've had exactly one knock on my door in the middle of the night... And as it turned out, it wasn't a complaint about noise at all - but rather, a compliment and a question as to what I was playing.

    So as usual, your focus on "externalities" completely ignores the reality that they are both negative and positive. They are not exclusively negative.

    What if you live in an apartment with a bunch of college kids and your stereo purchase enriches everyone in the building by improving parties? It's the same thing with people who buy grills and let other people in apartment complexes use them...

    Hell, my roommates & I grilled out for the Fourth, and we got about a dozen people walking by going "man that smells great guys!"

    YET AGAIN... Made people's days better not worse.

    So just merely assuming some mystical "damages" of $50 is absurd. I could just as well have assumed in my real life examples that I had benefited people by $50.

  • Chad||

    So, Sean starts out by pretending noise pollution isn't a problem. If that's how far libertarians have to stretch to defend their ideology...

    And when did I ever ignore positive externalities? On the contrary, the are primary elements of the justification of such things as public R&D and public transit. The market will undersupply anything with substantial positive externalities, just as it oversupplies things with substantial negative externalities. Only an idiot or a liar would pretend they cancel out on any regular basis.

    Btw, Sean, I would put my lifetime "noise pollution" damages in the ~$5000 range, and would easily be willing to pay that much in cold hard cash right now to rid myself of it in the future. Actually, I would pay at least twice that. I cannot think of any sound coming out of my neighbors' places ever that I enjoyed or valued. And you do realize that a lot of people don't like confrontation, and won't come banging on your door at 3am, despite how much you are pissing them off, don't you?

  • ||

    So what are the transaction costs on that? What happens when you multiply it by several neighbors? Who enforces the contract? Who pays for that?

    What are the costs of having a centralized authority control everything? Which system is more open to abuse? Which system is more flexible?

  • Chad||

    Hazel, are you seriously saying that these types of issues should be sorted out with some sort of private investigators, private cops, and private court system?

    I thought even libertarians agreed that this kind of stuff should be public....and yes, it is expensive. That is why regulation is often cheaper.

    A great example of this is air pollution. It would make no sense whatsoever for me to sue you for two cents of damage, and for you to counter-sue me for one cent (I am almost certainly cleaner than you). Such a Coasian system would cost millions of times as much as the damages caused by the problem it was attempting to solve. However, regulation can do it with handsomely positive cost-benefit. For the major climate bill before the Senate right now, the cost-benefit analysis runs around 9:1 in favor I believe..and that was pretty conservative, because a lot of difficult to measure things were left out and/or very conservatively estimated.

  • ||

    Hazel, are you seriously saying that these types of issues should be sorted out with some sort of private investigators, private cops, and private court system?

    Chad, are you seriously saying that private security firms and arbitration services don't exist? That unionized public police forces can't be replaced with private security firms you hire to protect your rights?

    Next you're gonna be asserting that private supermarkets are impossible, that only a government-run food distribution can possibly work.

  • Chad||

    Chad, are you seriously saying that private security firms and arbitration services don't exist? That unionized public police forces can't be replaced with private security firms you hire to protect your rights

    Oh, so the rich get to keep the poor out, and the poor, well, they can sell tickets to the Mad Maxx tourneys and make a fortune. THAT sure sounds like a winning plan, Hazel.

    Apparently, I have driven you off the deep end today.

  • ||

    Not all libertarians! I, for one, would be interested in having private investigators, private cops, and a private court system...oh, wait, such an ideal is not unprecedented! I could think of two instances where such things exist!

    1. Medieval Iceland
    2. Modern day America, with private investigators and arbitration. (Ok, maybe cops aren't privatized...unless you count security guards.)

    As for the current climate bill: who's determining the cost-benefit analysis? Why should we trust it? If the "benefit" is based on preventing "climate change", then I have severe doubts to the claimed 9:1 ratio.

  • Sean W. Malone||

    Didn't pretend it wasn't a problem in some instances... You just don't think through all the times when people actually enjoy or benefit from your so-called "externalities" - not unlike how you always talk about CO2 emissions from driving but you don't bother to consider the benefits people are getting like having a wide array of grocery products easily accessible, or going to soccer games and barbecues and generally enjoying life in ways that are immensely preferable to the horse & buggy days. The joy of the grandmother who gets to see her grandchildren after they drove 1,000 miles across the country to see her is just as much an externality of their choice to get in the car as was the amount of carbon dioxide they put into the air.

    And while carbon dioxide can be absorbed by plants & turned into clean, breathable O2, the grandmother has no way to recapture lost time with family.

    And you do realize that a lot of people - most even, I'd say - aren't actually miserable assholes like you who are utterly intolerant of people doing things that don't cater to their every petty desire, don't you?

  • Chad||

    It's not that I don't think about them, but rather that in most cases, the are utterly lop-sided in one way or the other. I can't even think of a serious positive externality of coal-powered electricity, for example, except for "prettier sunsets due to all the soot in the air reflecting the light of the setting sun"...as if this offsets the murder of 10,000 Americans each year somehow. And yes, I call it murder, because that is precisely what it is: the deliberate killing of innocent human beings, for crass profit no less.

    I am not miserable, btw. I get a kick out of life. But you are damned right that I am intolerant of you dumping costs onto other people, and then trying to defend it.

  • ||

    "the murder of 10,000 Americans each year"

    Got a link to back that one up?

  • Sean W. Malone||

    "I am not miserable, btw. I get a kick out of life."

    Citation needed.

  • Edwin||

    "murder of 10,000 Americans each year somehow"
    wow. Just wow.

    And you were just starting to make sense with your proposal that some regulations might be better than endless arbitration throughout society.

  • Sean W. Malone||

    By the by, I've never had any complaints, not because people don't complain - but because I'm a pretty courteous tenant... Which is one of many reasons I've managed to live in the same apartment for almost 3 years, which shares a wall with that of my landlord (who most assuredly isn't afraid to tell people when they're being obnoxious) and never had a problem.

    Honestly though, I am willing to bet I'm not just speaking for myself here when I say that it gets tiresome hearing you complain constantly about all the things other people do that aren't to your liking.

    In your world, everyone has the wrong car, the wrong house, the wrong job... They like to do the wrong things, and pretty much everything that you have ever had to hear or witness in public or apparently even in dense, rented domiciles, has been some kind of "pollution" imposing itself on what would no doubt be a pristine environment in which you would otherwise be able to enjoy your own massive dickitude.

    Have you ever considered that the reason you see negative externalities in every single fucking thing anyone else does, is simply that you're a complete douchebag?

    My only advice to you is: Go make a shitload of money, buy yourself a private island where no one can possibly disturb you, and go enjoy having a miserable existence.

    And if it's all the same to you, I think I'll be content with my generally positive memories of apartment living - like how my Italian neighbors/landlords in Queens used to shout at each other uproariously and then invite me to amazing backyard grills. Sure the yelling is annoying, but the homemade italian sausage was kickass. So for those of us who aren't complete assholes, we usually take the good with the bad and realize that that's just life.

    Sounds like yours would be extremely hard to enjoy.

  • ||

    "That's what happens the moment you factor in externalities..."

    ...especially red-herring, irrelevant externalities that are only tangentially related to the interaction under discussion.

    Nobody's claiming that every situation subsequent to a free transaction always works out for the best for both parties in the end. We're only claiming that, at the point of the transaction, both parties are benefited in the matter at hand as determined by the only objective measurement that matters - their own opinions.

  • Old Mexican||

    Re: Chad,

    No, the problem is that libertarians believe that all "voluntary" interactions must be positive-sum.

    In reality, they are a mix of positive, negative, and zero sum.

    Like a person can be a combination of living, dead and rotting. Same shit, right?

    Actually, Chad is on to something: His girlfriend says that their dates are a combination of positive-sum (for him) zero-sum (for her) and negative sum (for her potential love life with her former boyfriend, if she had chosen wisely.)

  • classwarrior||

    This is total nonsense. A market can be fair and efficient, but that requires total transparency and the free flow of information, features notably absent in the labour market.

    That's why:

    1) Most advertised nonunion/non government jobs don't mention a specific rate of pay or even a range

    2)Applicants are routinely asked about their compensation history, because employers are looking for employees who are used to being underpaid, with the intention of keeping tham that way

    3) Discussion of pay among employees in the workplace is definitely discouraged

    Profit maximization REQUIRES workers to be kept in the dark about what others are making, and given the power imbalance that exists between job seekers and employers, companies can get away with crap they would never dream of with the products they sell.

    Just imagine if you were looking at a car on the showroom floor you liked and asked how much it cost. What would your reaction be if the the response was "what were you looking to pay?"- would you stick around? Probably not, but that what job seekers put up with all the time. And the notion that workers don't care what others are paid is just plain stupid. Most people would definitely care if someone was being paid more for the same job with similar productivity.

  • Yonemoto||

    Wrong. If you had total transparency and free flow of information, you could programatically build a society. Markets are necessarily, precisely BECAUSE information is at best translucent.

  • Sidd Finch||

    If you don't have value beyond your warm body, you won't make much. This is not news.

    1) Your music store didn't advertise that because there's no labor shortage even at minimum wage. Hard low-skill jobs do post wages. High-skilled jobs often don't post wages because the range is already known and the details will be negotiated.

    2) Part of this is standard HR bullshit. Part is to see how others assessed your value. You're obviously very young. You should be focused on becoming skilled enough to treat employers how they currently treat you.

    3) Discussion of pay is discouraged everywhere, like religion and politics.

    I would tell the guy exactly what I will pay, and he can take it or leave it. Exactly the same as any voluntary transaction.

  • Paul||

    Well, it's clear classwarrior has never held down a job.

  • Old Mexican||

    Re: classwarrior,

    This is total nonsense. A market can be fair and efficient, but that requires total transparency and the free flow of information, features notably absent in the labour market.

    Balderdash! "Total transparency"? According to whom? Free-flow of information? What, your mommy doesn't let you search Monster.com?

    Most advertised nonunion/non government jobs don't mention a specific rate of pay or even a range.

    Liar.

    Applicants are routinely asked about their compensation history, because employers are looking for employees who are used to being underpaid, with the intention of keeping tham that way.

    How is a person "underpaid"? Compared to what? Do you read minds to *know* that a certain worker feels "underpaid"?

    Just so that you know, employers look at compensation history to have an idea of how much productive is a potential worker.

    Discussion of pay among employees in the workplace is definitely discouraged.

    Discouraged by whom? The employer? Nonsense! Even between friends, it is not POLITE to discuss how much one makes - it is none of their business.

    Profit maximization REQUIRES workers to be kept in the dark about what others are making[...]

    Again - total nonsense. Profit maximization only means selling high and keeping costs down. That's it.

  • ||

    Just imagine if you were looking at a car on the showroom floor you liked and asked how much it cost. What would your reaction be if the the response was "what were you looking to pay?"- would you stick around?

    Meanwhile, classwarrior walks in and immediately pays full sticker price- and his friends all laugh at him.

  • robc||

    classwarrior has also never shopped at most of the markets in the world.

  • Spartacus||

    ...guided by Adam Smith's invisible hand of self-organization.

    This kind of stuff always bugs me. Why does there have to be a guiding hand? Once we admit a "guider" then we just invite alternative arguments as to who the guider should be. YOU may say that Adam Smith is a better guider than Obama, but Top Men say otherwise.

    Get rid of the "guider" language. Supernatural forces have no more place here than anywhere else.

  • Some Guy||

    By that logic, you must think that evolution implies a magical creator.

  • zoltan||

    Natural selection does not involve some entity called "nature" selecting successful individuals within a species either. It's a useful metaphor (though I personally hate, hate, hate "the invisible hand" descriptor).

  • MJ||

    The oddest things can stick in some people's craw.

  • Tom||

    That stuff gets me too. I'm Spartacus.

  • doomboy||

    What is this "free market" you speak of, and where can it be found?

  • mad libertarian guy||

    +1

  • Chad||

    You can pretty much stop reading this article at

    "We assume an ideal
    environment where the market is perfectly competitive, transaction costs are negligible, there are no
    externalities, and market participants have perfect information".

    We may as well assume a horse is circle, and conclude they move by rolling.

    "We also assume that a company needs to retain all its employees in order to survive in this
    competitive market environment. Thus, a company will take whatever steps necessary, allowed by its
    constraints, to retain all its employees".

    OK, now we can REALLY stop reading, as we have assumed that horses are equipped with V8s and transmissions.
    Certainly, they roll everywhere!

    lol

  • Yonemoto||

    You don't make that assumption about global warming models, do you?

    I think the value of something like this is that you get to identify the assumptions that go into creating an "ideal environment". Then you can make deviations from that ideal environment that you expect to find in real life, and then begin accounting the effects of those deviations in the model - then seeing if those deviations explain real deviations that are observed in the real world.

    Do you really have a PhD? I think not.

  • Chad||

    Yeah, scientists made such assumptions about AGW...in the 1800s.

    Even then they got more-or-less the right answer.

  • ||

    Chad you are the same guy who said the oceans will rise 20 meters because of global warming. A physical impossibility given even the worse case scenarios of the IPCC.

    How can anyone take your evaluation of "more-or-less the right answer" seriously?

  • Chad||

    Uhh, it is quite well possible. It is only a question of how long it will take.

    ~2 meters is more likely this century, but if we fail to act, we will have locked in much more.

  • ||

    "~2 meters is more likely this century..."

    I'm officially calling bullshit.

    The IPCC themselves, in there most dire scenario (A1FI), forecasts total sea level rise (from all sources combined) of only 0.26 - 0.59 meters for the 21st century.

    So, which is it Chad? Are you ignorant or a liar?

    I'm going to guess both.

  • Chad||

    No, I am informed. Indeed, informed enough to know that those projections are old, and based on even older data. I assume you don't keep updated on these matters, but I do.

    www.sciencemag.org
    www.nature.com

    Read all about it yourself.

  • ||

    First, you didn't actually link to a specific source.

    Second, if I take you at your word (that since the 2007 IPCC report the forecast for sea level rise in the 21st century has been increased from .26-.59 meters to "~2 meters"), then that means in less than 3 years, the supposedly authoritative body on climate change was overruled, and their worst case scenario estimate for sea level rise was shown to be wrong by a factor between 3x and 8x (or 4x to 10x error for their median scenarios).

    In the wake of such a huge error, how much faith do you expect me, or any other reasonable person, to place in the validity of these forecasts?

    Gore says 20 meters in his movie, the IPCC say 0.2 to 0.5 meters, now someone else is saying "~2 meters". Ultimately, any sane person is going to conclude that the stories of future sea level rise are nothing more than scare-mongering, because the alarmists can't seem to get their own numbers straight.

  • Chad||

    No, it means that as of five years ago (the newest data in the report), they were too uncertain about certain elements, particularly ice melt, and left them out. They made an explicit note of this. The ocean rise you are citing is due to thermal expansion and some glacier melt, but largely ignored the big ice caps on Greenland and Antarctica, which have now been shown by several methods to be undergoing accelerating ice melt.

    Btw, rising oceans are a confirmed fact, again by multiple lines of evidence. There are only two explanations for this

    A: The oceans are heating up, causing them to expand thermally

    B: Ice-caps and glaciers are melting on net, filling the oceans

    Both lead to exactly the same conclusion: AGW

    Gore says 20 meters in his movie, the IPCC say 0.2 to 0.5 meters, now someone else is saying "~2 meters"

    BY WHEN and UNDER WHAT ASSUMPTIONS?

  • ||

    "No, it means that as of five years ago (the newest data in the report), they were too uncertain about certain elements, particularly ice melt, and left them out. They made an explicit note of this. The ocean rise you are citing is due to thermal expansion and some glacier melt, but largely ignored the big ice caps on Greenland and Antarctica..."

    Your assertion is false. The IPCC forecast included ice melt from both Greenland and Antarctica. Click my link above and see for yourself. (NB... Antarctica's contribution is negative, as it's still accumulating ice).

    What the IPCC excluded was "RAPID DYNAMICAL CHANGES IN ICE FLOW", in other words the theory that meltwater will somehow "lubricate" the ice-sheets and send them skidding off into the oceans. Or a theory with scant supporting evidence, and even less ability to model or forecast. That's why the left it out.

    "Btw, rising oceans are a confirmed fact, again by multiple lines of evidence. There are only two explanations for this

    A: The oceans are heating up, causing them to expand thermally

    B: Ice-caps and glaciers are melting on net, filling the oceans

    Both lead to exactly the same conclusion: AGW"

    Your logic is lacking. You can't conclude "AGW", from your points "A" & "B".

    I'll happily grant you "GW", but the anthropogenic part needs additional evidence.

    Right now, the best argument for an anthropogenic cause is "we've modeled both natural forcings and anthropogenic forcings, and the latter agree better with the temperature record over the last 90 years".

    So, the evidence is still weak. They can't explain what caused the Medieval Warm Period, or the Little Ice Age, but they're convinced that anthropogenic causes are entirely responsible for the current temperature change.

    "BY WHEN and UNDER WHAT ASSUMPTIONS?"

    Let's set Gore's 20m prediction aside for now.

    Dealing with the other two smaller forecasts first: The one I gave you ("0.26-0.59 meters") is the IPCC's worst case scenario for the 21st century. FYI, their best-case scenario is 0.18-0.38 meters.

    The prediction you gave us ("~2 meters"), who knows? You should be telling us what assumptions and timeline are.

    And for Gore's forecast, he doesn't give a timeline. He says that "if Greenland melts", then we're going to get 20 meters of sea level rise. The required timeline for Greenland to melt would exceed 10,000 years. Our current interglacial period would likely have ended before that, so Gore's numbers are nothing more than scaremongering.

    So tell us Chad, what do you think about Gore's 20 meter projection, and its relevance to climate policy?

  • JBA||

    So, before they predicted global cooling and an impending Ice Age.

  • Chad||

    Yes, I do have a PhD. It cost me $19.95 through a mail order catalog.

  • zoltan||

    Smarter than paying $199,500 for it, I guess.

  • Chad||

    Actually, you get paid to get a PhD in most sciences. It's basically a 60h/week minimum wage job after the first year. The first year you normally teach both semesters to earn your stipend.

  • Chad||

    OK, having read through most of the article, I can certify this as absolute crap (not surprising, given its pseudo-scientific source).

    The argument boils down to:

    Assume a company where everyone is paid A, but some people are really worth more or less. In this case, the following happens

    The high-value workers threaten to leave, and hence must be paid more

    The lower-value workers will face outside competition that pushes their wages down.

    Given the assumptions noted earlier, the money for the high-value workers comes from the low-value workers.

    Conclusion (and I quote): Thus, we see that concerns about fairness in pay causes the emergence of a more equitable salary distribution in a free market environment through its self-organizing, adaptive, evolutionary dynamics and that the spread of the distribution is closely related to fairness in relative compensation

    That's it. That's the entire argument!

    How idiotic. I was at least expecting some real world evidence that more "free" markets led to lower Gini coefficients. Not pseudo-science babble.

  • Sidd Finch||

    You must be a Royals fan.

  • ev||

    BURN.

  • Old Mexican||

    Re: Chad,

    "We assume an ideal
    environment where the market is perfectly competitive, transaction costs are negligible, there are no
    externalities, and market participants have perfect information".

    Assume a can opener.

    Whatever you "learned" from a Samuelson book, forget it. Now. Deprogram yourself.

  • ||

    Aren't you agreeing with Chad? He's pointing out that the assumptions that underlie many economic papers diverge so far from the real world that the analysis isn't particularly relevant.

  • Old Mexican||

    Re: MP,

    Don't underestimate the power of economics-illiterate authoritarians to confuse neo-classical economics with free-market economics that make no such assumptions.

  • Chad||

    Are you babbling about that "we make no predictions, but everything that happens confirms our views" idiocy called Austrian Economics?

  • Jordan||

    Well, Austrians predicted the housing bubble while you clowns were busy mocking them...

  • Chad||

    Perma bears predict every downturn, silly goose. But the Austrians still don't have an explanation for the mass unemployment that follows investment busts. Never have and never will.

    Btw, I predicted the housing bubble too, and the fact that I DIDN'T purchase a home in 2005/6, when I had every normal reason to, stands as a testament to that fact.

  • ||

    "But the Austrians still don't have an explanation for the mass unemployment that follows investment busts."

    Some number of jobs during the preceding boom should never have existed in the first place were it not for artificially low interest rates.

  • Old Mexican||

    Re: Chad,

    But the Austrians still don't have an explanation for the mass unemployment that follows investment busts. Never have and never will.

    It's called "correction", dum-dum. Of course there's an explanation: a shift of RESOURCES (including labor) from unprofitable projects towards the more unprofitable. Stop kissing Krugman's ass for a change.

  • Old Mexican||

    Towards the more PROfitable. Sorry, late nite.

  • Old Mexican||

    Re: Chad,

    Are you babbling about that "we make no predictions, but everything that happens confirms our views" idiocy called Austrian Economics?

    See, MP? What did I tell you? Did I not say "never underestimate the power of economics-illiterate authoritarians to confuse" pseudo-economics with real economics?

  • Jason||

    You can pretty much stop reading this article at

    "We assume an ideal
    environment where the market is perfectly competitive, transaction costs are negligible, there are no
    externalities, and market participants have perfect information".

    Ummm, if you want to study 1 variable, you usually have to hold all others constant... and not just in economics.

  • Chad||

    Actually, no you don't. Look up "Design of Experiments" and read to your heart's content.

    But you don't even seem to have a clue what you are talking about, so I won't waste any more words. Assumptions =/ variables

  • Jason||

    Yes, you do. If you're not controlling for anything, how do you get meaningful results?

  • Chad||

    Statistics.

    Next question?

  • ||

    But if you don't control for anything, how do you get meaningful statistics?

  • Neu Mejican||

    how do you get meaningful results?

    By studying something other than economics?=/;^)

  • ||

    OK, so how about we try to create rules that make markets as close to ideal as possible huh?

    You know, assign property rights to internalize costs, increase transparancy, etc.

    No? That would be too capitalistic for you, I guess. The only real answer is "democracy". Everyone holds hands and steals from the rich guy.

  • ||

    1) Most advertised nonunion/non government jobs don't mention a specific rate of pay or even a range

    Many do. Some don't. I work in an field where pay is practically never mentioned up front, but I've never had to ask more than once.

    2)Applicants are routinely asked about their compensation history, because employers are looking for employees who are used to being underpaid, with the intention of keeping tham that way

    Bullshit. Employers are looking for people who either willing to take a big cut (because that is a sign of a future problem employee) or somebody looking for a big bump (because they might not really be qualified, regardless of how they look on paper).

    Employers don't try to keep people undercompensated, because nothing adds cost to your workforce like the constant turnover that comes from underpaying your people.

    3) Discussion of pay among employees in the workplace is definitely discouraged

    Really? As a social tradition, but I've never seen a company that really cared enough to take any kind of enforcement action, even if they had a policy on it.

    Profit maximization REQUIRES workers to be kept in the dark about what others are making,

    No, it doesn't. First, you can't keep people in the dark about this. Has anyone worked anywhere where they couldn't get a pretty good idea what other people were making, if they cared to do so?

    Second, profit maximization requires keeping costs down and productivity up. You can't do that with an unhappy workforce, which would be one that is either thinks or knows it is undercompensated.

    given the power imbalance that exists between job seekers and employers

    Outside of a structural unemployment phase like we have now, this is pure fantasy. People at the bottom of the pay scale know they can get another crappy job that pays crap anytime, anywhere. Who has power over them? People with valuable skills have influence where they are, and can also find another job if need be. You'd be shocked to learn just how little power most supervisors think they have over their people.

    , companies can get away with crap they would never dream of with the products they sell.

  • Neu Mejican||

    Most advertised nonunion/non government jobs don't mention a specific rate of pay or even a range

    Many do. Some don't. I work in an field where pay is practically never mentioned up front, but I've never had to ask more than once.

    Whatever the reasoning behind it, the employer typically seeks this information before the discussion starts without providing the same information to the employee (i.e., the application requires you to fill out information on what you are looking to make, but does not share the salary range being offered). Both parties have an interest in keeping the information to themselves until the negotiations start, but employers typically have enough power to leverage a look-see that employees don't. Common courtesy would indicate giving a salary range up-front if you are going to ask for salary history up-front. If you are not telling me the salary range up-front, you can wait to find out my salary history until we have moved further into the discussion.

  • Old Mexican||

    Re: Neu Mejican,

    Whatever the reasoning behind it, the employer typically seeks this information before the discussion starts without providing the same information to the employee[...]

    The man should be horsewhipped for NOT doing the potential employee's homework.

    I mean, every employee has a right to be given all information. It's in the Constitution somewhere, I think . . .

  • Neu Mejican||

    I say common courtesy and you read "right to be given all the information enforced with violence"?

    Whatever.

  • Neu Mejican||

    And Old Mexican what pray tell is my homework here?

    It is finding out the salary range offered by the company (among other things). If they withhold that kind information, why should I provide them with similar information? You want my work, you deal with me in an honest, open fashion. Deal with it or I'll get a job somewhere else. Common courtesy.

  • Old Mexican||

    Re: Neu Mejican,

    I say common courtesy and you read "right to be given all the information enforced with violence"?

    No, I read your "common courtesy" canard, and took it for what it is: disingenuous double-speak.

    "Common courtesy would tell you that if you call, you should show YOUR hand first."
    "Common courtesy would tell you that if you ask the patient to show his tongue, you should show YOURS first."

    MAKES SENSE, Neu. Makes sense. Thinking to myself "this guy is not this stupid", I took as usual lefty disingenuity. Hey, I am doing you a favor.

  • hmm||

    Being a Reason intern has to be like getting kicked in the junk every 5 minutes with your head in a bucket while some one continuously smacks the bucket with a ball-peen hammer and Celine Dion blasts in the background.

  • ||

    Being a reason intern probably eliminates the expectation of undeserved praise.

  • Paul||

    How can you say it's "fairer" when in a truly collectivist society, everyone is poor?

  • Right but, wrong reason||

    "a new report that shows Americans are more giving than Canadians thanks, in part, to the Canadian welfare state." That's because Canada has a fair social net, and people do not need to beg for money. Medical care is provided in Canada, and good luck if your insurance denies you care, or rescinds your policy here.

  • hmm||

    That is some powerfully stupid logic.

  • just powerfully stupid ||

    My wife ducktaped an oven mitt to my hand. It makes watching John Stagliano films difficult.

  • hmm||

    Clearly the actual events exactly as they occurred.

    I may have to revise my powerfully stupid comment, it may not be powerful enough.

  • Remind me ||

    to never eat dinner at your house. I can imagine the dual purposes of your pot scrubber

  • zoltan||

    Apparently there are no poor people in need in Canada.

  • Right but, wrong reason||

    American charitable giving is advantageously influenced by the US tax code. Another fact that these bozos did not refer to in their article.

  • hmm||

    Charitable giving is influenced by a multitude of things. I'm pretty sure they weren't going to cover everything.

  • Right but, wrong reason||

    This is a erroneous statement : "Americans are more giving than Canadians thanks, in part, to the Canadian welfare state." Typical of Reason journalism to leave out important facts that do not shore up the libertarian theme.

  • Jesse Kline||

    That's because Canada has a fair social net, and people do not need to beg for money.

    It's more likely because people figure the government will take care of social problems for them and therefore don't take any responsibility for fixing the problems.

  • Van||

    This article makes me wish we lived in a free market for wages.

    I could negotiate a better wage benefits package than the standard one companies typically offer their employees. For example I could negotiate a severance package on the front end instead of waiting until I get a lay off notice. The initial salary offer would not be based on a trade off between my previous salary and the average salary of everyone in my labor category. The company would not be able to make me work unpaid overtime because that would be in my contract.

  • Tony||

    Ha! What makes you think you would have that much say in your "contract"? And how are all your complaints the fault of government meddling in the market? In a "free market" you might be able to negotiate blowjobs for health benefits when your arm is severed by the sweatshop machine you stand at next to a 12 year old.

  • Van||

    Fuck off Faux Tony!

    Who said anything about the government? I was complaining about the way businesses treat people like statistics and average them together when offering salaries and benefits. Corporations behave more like government bureaus than capitalist enterprises, in part because of government regs but also because they are run by liberal elites at the highest levels.

  • Neu Mejican||

    I think this is the key paragraph needed to interpret this study:

    By liberating entropy from its restrictive interpretations, we have shown the deep connection between the supply-demand driven, self-organizing, dynamics of an ideal free market for labor comprising of rational utility and profit maximizing animate agents and the thermodynamics of inanimate non-rational molecules. Thus, the same conceptual framework, which we call as statistical teleodynamics, explains and predicts certain aspects of the behavior of both kinds of systems, rational and non-rational.
  • ||

    Key words being "the collective actions of all the employees"

  • CE||

    Of course free markets promote fairness in wages -- the best workers tend to get paid more, as they should.

  • ||

    Free market promotes *fair* wages, while other "fair" systems actually promote *equal* wages instead (for equal years of service for example). In a free market, your wage is "equal" to your value. In a union, it's equal to your age...

  • ||

    I have concluded that, like any typical porn magazine photo spread, free markets are a model that is not available in reality, you'll never see one like it in the living flesh, and if you did you couldn't either have it or handle it. It makes for a wonderful fantasy, though.

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