Here’s a longish response to Blonde’s last comment on “A question about the living wage.”

Yet again I’m late. I understand your logic better than before, and I agree with the rationale. I guess then, for me, and I assume for at least some others, it comes down to a social-economic issue rather than a purely mathematical-economic issue.

These issues are not incompatible. The apparent incompatibility arises from the fact that not all forms of cost and benefit are as easily quantifiable as dollars are. Effective economic thinking takes non-financial factors into account, though still analyzing them mathematically. We prefer greater happiness to less happiness, don’t we?

I understand the productivity vs. wage argument, and that this is a significant factor for businesses and corporations in their bottom line. We are a capitalistic society, after all, and businesses typically exist solely for the purpose of gaining capital.

It’s more accurate to say they exist for the purpose of gaining profit. For most businesses, capital is a means to an end, the end being profit.

But I think there’s an issue when working 40 hours a week does not guarantee a person or family sufficient food, housing, or clothing, and I think this is hugely problematic. What is the incentive to work or educate yourself if there is not a strong likelihood of a good outcome for the individual?

Did you ever work a job that paid less than enough to support yourself independently, or to support a family? What was your incentive? There’s your answer.

According to a BLS report from March of 2014 (very first paragraph), there were approximately 3.3 million hourly workers in America who work for minimum wage or less. Ask them why they bother. Are they suckers? Presumably there were millions more who earned above the minimum wage, but less than a hypothetical living wage. What was their incentive? And I’d bet there are hundreds of thousands, if not more, of people who are looking for work, but can’t get it because the federal or local minimum wage is too high. Why are they looking for work at all?

Given that there are people working for less than a hypothetical living wage, and given that there are unemployed people looking for similar jobs, and given that both groups are clearly responding to some incentive, why make it harder to hire them?

By the way, it is imprecise to suggest that people seek “good” outcomes, because “good” is in the eye of the beholder and, more importantly, “good” outcomes aren’t always available. People seek the best available outcomes. Minimum wage laws limit access to some people’s best available outcomes.

And by the way by the way, is it reasonable to demand (I use that word because we’re talking about laws here) that a teenager should be able to earn enough in 40 working hours to feed, house, and clothe himself? Or a family? That’s an important question because according to that BLS report, that’s almost a quarter of the 3.3 million in question, and raising the minimum wage as high as you suggest puts those jobs in peril.

Workers are trading their time and energy for capital. Why bother to participate in this process if the tradeoff doesn’t leave you able to feed yourself? Why not go into a nefarious and illegal profession instead of wasting tuition payments and time on being a productive member of society if your productivity is deemed to be below the threshold of a livable wage?

Again, I ask, why make it harder to hire these people? I know you don’t want to make it harder to hire marginal workers. I know you don’t want to make it harder for them to earn some money, gain experience, build skills, and make contacts. But that’s exactly what minimum wage hikes do to those workers who need money, experience, skills, and contacts the most. That’s why I oppose minimum wage laws.

And in keeping with the free-markety tone of my answers, many (not all) of those nefarious and illegal professions wouldn’t be so nefarious if they weren’t illegal, and probably shouldn’t be illegal in the first place.

I will always be a product of a capitalist society, and I do not think that there is anything inherently wrong with the goal of a business or corporation being profits. But I also think that as such an ingrained part of our society, businesses and corporations also have a responsibility to pay their workers living wages, even if this means decreasing profit somewhat.

Nope. They have a responsibility to pay their workers what they contract to pay their workers. The end.

If you think that there’s a social responsibility to ensure a minimum standard of living for everyone, then a minimum living wage is an inefficient way for society to provide that standard to those in need. If society wants to provide that standard, it should do so through transfer (welfare) programs. Don’t get the wrong idea– I’m not a huge fan of that either, but it’s more direct, it’s more efficient, and it doesn’t force businesses to hang on to workers who cost them too much money.

After all, if people en masse are unable to afford the necessities of living based on their jobs, business will ultimately decline as a result of decreased purchasing power. It’s in the business or corporations best interest to take a loss now (through increased wages) in order to ensure stabilized or growing profits later (through increased purchasing power), no?

Not necessarily. That’s partly why I don’t want to mandate higher wages. And despite stereotypes, the business world is interested in long-term profitability.

I can imagine situations in which businesses make themselves better off by paying workers more money specifically so that those workers can buy the businesses’ products. But I can’t think of any off the top of my head… can you? They say that’s what Henry Ford did, but it was a myth– he raised wages in order to attract and keep the most productive workers.

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Just out of curiosity, what do you think would happen to businesses if the feds enacted a minimum profit law? Or to landlords if there were a minimum rent law? Or to banks if there were a minimum interest rate law?

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Anyhow, I just wanted to keep this conversation going because it’s an important and enjoyable topic. I’ll delve into the responsibilities of businesses later.

The following transcript was culled from a recent interweb chat with my friend “72”, in which we were discussing a prospective convict:

72: Dude needs to go to jail so God’s left hand can get busy.

VDV: Now, now. I agree, but that’s not a nice thing to say.

72: Justice is a virtue of God same as the rest.

VDV: That’s going on either a plaque or a bumper sticker.

I am not proud of the somewhat vindictive tone of the conversation, but that’s movie tagline material right there. A Western? I’m seeing a Western right now.

Clip from the trailer: intercut with scenes of a ruthless gang terrorizing the county, a priest tries to talk a steely-eyed badass out of going after them. It’s too risky, there are too many of them, there could be blowback for the good folk of blah blah blah. Let God handle it. The hero grumbles: “Justice is a virtue of God same as the rest.” Gunfire. MCQUEEN. Bank roberry. VAN CLEEF. Train derails and explodes. Title Card: VIRTUE OF GOD. Summer 2015.

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Aside from the World Cup posts, I feel like I haven’t been very productive this summer blogwise. The school year’s a-comin’, so hopefully the additional intellectual stimulation will help remedy the writer’s block.

Ten and seven sounds
cannot bespeak my longing.
Not being near you sucks.

Noutheo writes:

I’ve been reading a lot of works by the late economist Murray Rothbard, and he’s turned me into a proponent of money backed by commodities. “What Has Government Done To Our Money” was especially interesting as he explored the history of money and the gold in the USA. So I was wondering what your thoughts were on the gold standard and whether or not we should return to it (or some other commodity).

First, allow me to explain in simple terms what a commodity standard is. Simply put, it means that the value of money is legally based on the value of a particular good or set of goods. Therefore, a gold standard mandates that the value of money is linked to the value of gold. A commodity standard is distinct from a fiat standard. A fiat standard means that money’s value is not linked to the value of any particular good or set of goods. Fiat money is backed by government mandate; it is valuable because the government says so. The US dollar has been pure fiat currency since 1971.

This is a topic that used to be quite near and dear to my heart. My college honors thesis dealt with the gold standard, and at least one of my college profs was a gold bug.

I haven’t read Rothbard’s writings about gold in a long time, so I can’t comment directly on him. Send me some links to the particular articles you’re reading because I’d like to look at them.

I’ve spent several days trying to figure out a clear way to respond, but haven’t had much success. So allow me to ramble via bullet point a bit before answering your question directly.

1. I don’t believe that inflation is inherently worse than deflation, or that inflation of X% over a given timeframe is inherently worse than deflation of X% over an equal period.

2. That doesn’t mean that using gold, which is usually deflationary, is as good or as bad as using fiat paper, which is usually inflationary.

3. I’m not convinced that a gold standard would bring discipline to monetary or fiscal policy. Governments find workarounds, whatever standard you’re on. In my opinion, our currency standard is pretty low on the list of problems with our government that need to be fixed ASAP.

4. You do not have the right to have the monetary value of your stuff remain constant relative to other stuff. In other words, you are not entitled to have your stuff’s monetary value increase via deflation or decrease via inflation.

So, should we return to a gold standard or some other commodity standard? If you’re interested in reversing inflation and tending towards deflation, then yes, using a gold standard would accomplish that, though it would not be a panacea.

But if you’re interested in optimizing human liberty, and given your email I assume you are, then no, we shouldn’t have a gold standard, or a commodity standard, or a fiat standard. We should have a free market in money.

If you accept money backed by gold, or silver, or land, or oil, or any other commodity, and other people will accept it in trade, good for you. If you accept money that I just drew on a piece of paper, and other people will accept it in trade, awesome. If the government prints money backed by nothing but faith in the US government, and you accept it, and others accept it in trade, great. If Bitcoin works out in the long run, then yippee! And if Gene Roddenberry’s vision comes true and we just plain stop using money (never mind all the different types of money that get mentioned all the time in Star Trek) and people are happy with it, then so be it.

I don’t think anyone should be punished for using anything as money, so long as buyer and seller agree to the exchange freely, without fraud or force. So, in the interest of advancing liberty, we shouldn’t have any official monetary standard.

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P.S. A cobalt-iodine dirty bomb would not render gold radioactive for anything close to 58 years, so don’t get any ideas.

The World Cup is over, Germany emerged victorious, and alas! we face four agonizing years until the next edition, which’ll be in Russia, which by then will hopefully be under the supervision of a kinder, gentler autocrat.

The final was an good game, though not high-scoring as I’d hoped. Germany controlled most of the action, as expected. Some feared that Argentina would play a negative game, sit back, generate little offense, but they got some good chances to score in regulation. The stat sheet shows ten total shots, same as Germany, though ze Germans got more on frame. Despite the same final score, this game was much better than the last time these two met in the final. God, that game was hideous. I’ll come back to it shortly.

I saw a few thingies on the internet billing the final as “Messi vs. Germany”. As much as I celebrate Messi’s talent, this Argentina team was not a bunch of slouches plus a superstar. This was a good collection of players– not 1986 good, but certainly better than 1990– that probably needed better coaching earlier in the tournament. Messi had an average game; he crossed a few from close in that just missed the target, or slipped just past the post. A commentator called his final free kick, which sailed over the bar, “selfish”. That wasn’t a fair comment at all. If Messi can score from there, if he has scored from there, and if he’d scored directly from a free kick earlier in this tournament, then I don’t get how “having one of the best free kick takers and shooters on Earth shoot the ball” is a selfish decision. He didn’t score. That’s all.

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I’d have to think a while longer about whether this was the best World Cup I’ve seen. The first round was easily the best first round I can remember, despite Italy’s humiliating exit. There were more goals than we’ve seen in ages, the US advanced (and would have clinched it after two games if not for Ronaldo), we finally saw the goal-line tech in action, and we saw the 10-yard spray in action. Love that stuff. No more WWE-style scooching closer to the ball when the ref has his back turned. I was pleased with FIFA’s willingness to tinker, though they could certainly do more. And some more after that.

The knockout stage was good; the four best teams made it to the semifinals, and yes, I include Brazil in that, because “making it to the semis” is different from “actually playing in the semis”. The Brazil that won its group and won its first two knockout games was one of the best teams in the tournament– that is, as long as Neymar was on the field. Without him, the team just plain quit. It is apparent that Neymar’s greatest impact was psychological. It shouldn’t have been, because Brazil always has talent, and should never think they have to rely so heavily on just one player. Their collapse reflects poorly on the players, but lies squarely on the coach, and it’s good that Scolari and his entire staff resigned.

I don’t know if this year’s knockout stage was my favorite. I’d probably have to go with 1990. West Germany, Italy, and England were chock-full of stars, and though I was rooting for Italy, I could live with either ze Germans or the Last Good English Team winning. But what heightened the drama was Argentina’s run to the final that year. Maradona was an out-and-out villain, and Argentina played very negatively, but it worked. They finished third in their group and barely advanced (Maradona used the “Hand of God” to stop the Soviets from scoring), they squeezed past Brazil in the second round (there’s reason to believe that Argentinian trainers put tranquilizers in Brazil’s water bottles– I’m not making that up), and they beat Yugoslavia and Italy on penalties. It was ugly to watch, and it was disturbing to see such blatant, vicious, cheating bus-parkers get closer and closer to the final. And in the final, it looked like it could happen again: despite missing four suspended starters, being outshot 15-1, and getting the first red card in a World Cup final ever, Maradona and his partners-in-crime were just a few minutes away from getting to extra time when the ref gave West Germany a PK. Ze Germans scored, and won 1-0. The PK was a bit of a gift, but at least it saved us all from the horror and travesty of watching Maradona lift the World Cup again.

…I’m still bitter about Italy losing that semi.

Anyhow, back to the present: pretty darn good World Cup. Congratulations to ze Germans for winning the title and for being deserving champions; congratulations to the Argentinians for a valiant and proud effort. Hopefully FIFA will keep tinkering and improving the game, hopefully the US will return to the knockout stage and go even further, hopefully Italy will get its act together. And hopefully this Cup will get more American fans to keep watching– Champions League, Premiership, MLS, whatever– and will get more American kids interested in playing.