Try eliminating it and see if there is any evidence it increases employment (as long as we are just trying things with no evidence.)
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Will Capitalism Survive/Fix This?
- Thread starter tommo
- Start date
How? No profits no capital unless you want to start selling vacant factory buildings, but to who?Capital.
How? No profits no capital unless you want to start selling vacant factory buildings, but to who?
I mean, that's what I mean. Companies can't make profits if people don't have money. So there is an incentive for an economy to want the population to have enough money to spend before it gets to a tipping point of shrinking from shrinking profits, which lead to cost cutting, which leads to poorer people, which leads to shrinking profits...
Try eliminating it and see if there is any evidence it increases employment (as long as we are just trying things with no evidence.)
Even 100% employment doesn't mean anything on its own. You could have 100% employment, but if everybody isn't getting paid enough to acquire living commodities AND save, there's stagnation. What's the point of high employment if nobody's making any money? At least peg the wage to a local commodity basket.
Also, it's not a debate without evidence, although I'm sure you have your own conflicting sources.
http://www.nelp.org/publication/rai...ion-minimum-wage-increases-employment-levels/
Regardless of the opinion on whether the min wage should be higher or lower, it should at least hopefully be clear to all that a higher minimum wage is not directly inverse to broad employment across an economy, since more money in the pockets of common workers should encourage consumption and spending and offset higher costs.
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100% employment means wages are going up. Min wage would become meaningless. They couldn't raise it fast enough.I mean, that's what I mean. Companies can't make profits if people don't have money. So there is an incentive for an economy to want the population to have enough money to spend before it gets to a tipping point of shrinking from shrinking profits, which lead to cost cutting, which leads to poorer people, which leads to shrinking profits...
Even 100% employment doesn't mean anything on its own. You could have 100% employment, but if everybody isn't getting paid enough to acquire living commodities AND save, there's stagnation. What's the point of high employment if nobody's making any money? At least peg the wage to a local commodity basket.
"It may survive, but it certainly won't "solve everything." Nevertheless, I appreciate your attempt at humor.Capitalism will survive and solve everything.
Always interested in your posts, though I find myself seldom in agreement with them. This most recent post is an exception however, in that I find myself approximately in 50% agreement. I want to sleep on it. and will perhaps later respond in some detail. The idea of encouraging production and investment is behind supply-side economics, with the intention that the additional employment that results will furnish demand. I'm not convinced that Robots will be able to furnish the hoped for demand however. As I said, I want to sleep on this and give these thoughts further contemplation.The "middle class" is a post industrial revolution concept; there was no feudal middle class; the concept is a creation of capitalist production. If there is no capitalism, there will be no middle class, but more subtly, if there is no production in an economic society, there will be no middle class.
The 'inequality' complained of here is a result of declining domestic production which was brought on over the past 30 years by a fiscal context that discouraged domestic investment over domestic consumption. This middle class destructive fiscal context reached its apex under President Obama. With all the socialist and income inequality rhetoric the last eight years only saw an acceleration of production running away from America and a worsening income inequality metric.
What we need to do to help America (capitalism doesn't need help, it will move if you are not nice to it) is encourage domestic investment by reducing tax and regulation on investment; this is more important than reducing taxes generally, or reducing individual taxes, or reducing taxes on the 'middle class.' All those other tax reductions are merely feel good Keynesian sops that will not help; that will not produce wage growth for domestic workers.
Because we can't ignore the needs of an 'underclass' of unemployables that we have created though dysfunctional progressive policies, and we must provide for domestic security in a still hostile world, and because we have squandered so much in government borrowing that was never invested in anything that could pay back the debt, we do need gov't revenues.
That is why it is important that tax reduction be focused in ways that encourage production; this may seem unfair and unequal, but it is the only thing that will provide a basis to work out of this mess.
100% employment means wages are going up. Min wage would become meaningless. They couldn't raise it fast enough.
I don't think this thinking is taking into account the complete paradigm shift that globalization and automation will have on a capitalistic economy.
Yes, what you're saying, that 100% employment implies that laborers are in demand and wages need to rise competitively, is tradition.
However, automation and a growing population means that labor supply will grow exponentially while labor demand will fall exponentially. The free market value of labor will thusly fall thru the floor as jobs become obsolete. Whatever the answer, laissez faire is not it.
If jobs become obsolete we won't really need a minimum wage will we? They could make it 5k/hr but it wouldn't make life more affordable to a displaced worker. So just what problem are you trying to solve with a minimum wage?I don't think this thinking is taking into account the complete paradigm shift that globalization and automation will have on a capitalistic economy.
Yes, what you're saying, that 100% employment implies that laborers are in demand and wages need to rise competitively, is tradition.
However, automation and a growing population means that labor supply will grow exponentially while labor demand will fall exponentially. The free market value of labor will thusly fall thru the floor as jobs become obsolete. Whatever the answer, laissez faire is not it.
If jobs become obsolete we won't really need a minimum wage will we? They could make it 5k/hr but it wouldn't make life more affordable to a displaced worker. So just what problem are you trying to solve with a minimum wage?
I mean, you know I am a UBI proponent. Obviously it's something that would need easing into, but I view strong labor and high minimum wages beneficial to keep the bottom line afloat until we reach such a tipping point.
Basically, it's all a means to an end of keeping money from stagnating at the top and finding ways to keep it going back down (so it can go back up), whether that's from higher wages for the fewer and fewer jobs that exist, or a UBI.
Either of them put upward pressure on wages.
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"It may survive, but it certainly won't "solve everything." Nevertheless, I appreciate your attempt at humor.
It is somewhat amusing that many of the OECD Better Life Index top 10 countries (http://www.oecdbetterlifeindex.org/) would be considered socialist by US standards.
Capitalism is the ideal system for trade. But beyond that -- I don't know.