Prices

By 2021, employers in Seattle will be forced to pay workers $15/hour. This is a little problematic when one considers that at $13/hour presently workers in Seattle have started to experience a decrease in their standard of living. While members of the liberty movement have been saying this since the early 1900s, people never listened. So, yet again, people will have to go through hell. The University of Washington and the National Bureau of Economic Research have decided to study the effect of the wage hike, and so now there's proof that isn't merely empirical, anecdotal, or common sense. Now, a far left organization and a governmental organization have confirmed the libertarian view. At last! So, what was the verdict? Minimum wage workers now make less money despite the raise they received. Why? Because employers were forced to cut hours because they could not afford the wage increase. By attempting to force employers to pay more the government just fucked shit up... like always.

Prices, in this case the price of labor, cannot be planned. Prices are a complex indicator. Prices are set by supply, demand, business need, competitive strategy, credit supply and demand, dollar supply and demand, and by dollar velocity. Because of this complexity, any attempt to fix the price will fail without perfect information of all factors involved. That perfect information is impossible to attain. Because the information is impossible to attain, no "perfect" price can be fixed by any regulatory body. These attempts have ruinous consequences. A step back in income means more than the average loss of $125/month that this particular incident caused. Any income that does not increase annually at a level equal to the rate of inflation is an income that is annually decreasing by the rate of inflation. Any distortion in price means that those involved cannot make informed decisions. This leads to the misallocation of resources and boom-bust cycles.

Some would say that employers are being greedy, but then... they fail to realize that the profit that companies take is vital for all involved. The owner(s) has to pay his/her investors. If he/she doesn't then the investors can take legal action against him/her. Also, if the company does not turn a profit, it cannot reinvest in itself and grow. This means that it will eventually be out-competed and go out of business. This means that once again the people who were to benefit due to this rule of no profit taking would simply have no job at all. A study undertaken in 2002 by Yale researchers shows that mortality rates increase as unemployment increses. Economics is the quanitification of human productivity. If you fuck with the economy you fuck with human productivity and this means death. It really is that fucking simple.

A UBI or welfare state is no better. Either of those systems requires that either the money be taken from those who work and given to those who do not, or that the money be printed. If the money is printed the inflation/pay raise issue comes into play quite severely. If the money is taken from those who work, we find that work is discouraged.

Liberals and conservatives alike acknowledge that taxing anything will mean less of a thing, and subsidizing a thing will mean more of a thing. Taxing booze and cigarettes mean that booze and cigarettes are more expensive than they'd otherwise be and therefore people consume less of them. Oil and corn have been subsidized and are cheaper than they'd otherwise be and people therefore consume more of both. The high taxation of labor has meant a decrease in labor, and the subsidy of economic non-production through welfare has meant that there are more who take welfare. It is that simple. People respond to incentives.

This fantasy in which everyone makes shit tons of money regardless of skill or time investment is one that cannot work. Wealth is the result of the creation of value. If value is not created then no wealth exists. A tree is not worth much money. After someone cuts the tree into logs and the logs into planks and the planks into chairs, homes, and other goods wealth has been created. Those products of time, labor, and resource are the wealth. The money is a representation of one's contribution to society at large. The money represents the time, the labor, and the quality of both. As such, the subsidy of inactivity leads to a less wealthy society overall. Some would argue against this stating that to hoard money is to stymie economic progress. This is also false. The saving of money leads to later large investment. If no saving is ever done, no investment can be done. If no investment can be done then only the current status quo can be maintained. When money sits in a bank, the bank loans it. When money is put into stocks, the money is being injected into businesses. When money is merely squirreled away in a mattress or whatever it is being accumulated for later use on more expensive things or larger investment opportunities. All of those are good uses. Additionally, any loss in monetary velocity is deflationary. That deflation means that everyone effectively receives a small raise as long as he/she doesn't carry debt.

Socialism, central planning, minimum wages, taxes, price controls... any interference in the economy is deleterious. It's also hubris. Economic interference rests on the idea that the planner knows better than the individual what is best done with the individual's money. This is foolish. This would once again imply perfect information is held by the planner which is not possible. Let go of this idea. Let people make their own choices. Do not outlaw jobs. Do not outlaw underbidding. Do not subsidize inactivity. Do not penalize work. Do not price goods and services out of the market. Just leave people be. If you need a cause, there are plenty from which to choose. The oppression of women in the Near East and Africa would be a great one. The eradication of malaria would be another. The furthering of sanitation across Asia and Africa would be an amazing cause. Perhaps, stopping the US government's illegal and immoral wars throughout the Near East would make the list? We have many far more important and pressing issues to solve and yet the people of the USA are focusing on making sure that the richest country on Earth has more economic equality... they are focused on micro-aggressions and gender specific bathrooms... That's cool guys.


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