—–Original Message—–
From: PP
Sent: Sunday, January 08, 2017 12:13 PM
To: [email protected]
Subject: It was nice to meet you, fellow mutant!
Hi Walter, Thank you for making the journey all the way out to the left coast and speaking at our local event. I have had a number of thoughts on many of things you discussed, but felt that some of my questions may be too long for such an event. Please understand that I do not feel I am breaking new ground with these observations. I am genuinely hoping that you can point me to discussions on these topics, as I have not come across them so far on my own. How does the NAP actually fit in with specific rights? In my own understanding of rights, it seems like the NAP doesn’t specifically fit in with such considerations. It seems more like a moral position taken while engaging various rights, but I am very unclear on this. If you can point me to a discussion along these lines, that would be fantastic.
Other rights and freedoms, such as freedom of speech. You discussed that your perspective on libertarianism is based on a framework built on association, NAP, and property rights. After your discussion I concluded for myself this makes sense from an anarcho-capitalist perspective, but from the perspective of dealing with what we have to start with right now in the U.S., I have placed freedom of speech as the highest priority right to maintain and fight for.
If we have no freedom of speech but all other rights, then all other rights are in jeopardy because we cannot argue against their removal. If we have no other rights and only freedom of speech, then all other rights are on the table because we can argue for their establishment.
Below free speech I have placed association. If we cannot come together with the people of our choosing and separate ourselves from others, then we cannot be effective in generating any meaningful change.
On a scale of one to ten, with ten being highest priority, I would rate free speech as a 10, association as a 7, and property rights a 6.9.
Has anyone else written about such things along these lines? (And please note that this is not an attempt to discount philosophical beliefs in some eventual anarcho-capitalist society, just a pragmatic consideration of where we find ourselves today.)
Minimum wage policy discussion
I have also been concerned that opponents of the minimum wage have failed to be successful at even reasonably reducing its rate of increase. My observation is that the arguments have largely been the same at least since Milton Friedman popularized them in the 1970s, indicating that:
-possibly no new arguments have been developed or new arguments have not at least penetrated to opinion influencers
-arguments put forth are usually about the poor and sometimes about small business owners, but not about how minimum wage hurts so many others.
I feel the second point is important because people will vote to benefit themselves more than they will vote to benefit others. For this reason, I think it is important to come up with arguments that demonstrate how the minimum wage hurts everybody. I have an example argument that I came up with, but I don’t claim to be the first person to propose this as an argument, I just haven’t been able to find anyone else framing an argument along these lines. I also don’t do a good job at presenting the argument from an economics perspective and it is too long in its current form (I can even appreciate if you do not have time to read it through):
A Chinese widget factory has annual revenue of $80 million and 1200 employees. Of course, that’s just the most recent year’s figures, because the factory is always growing. It’s located in a manufacturing zone and surrounded in a sea of factories that all look much the same.
One thousand of the employees are what the Chinese refer to as ‘the workers’. The workers are unskilled labor. Prior to going to China, if someone were to ask me what unskilled labor is, I would have said it’s someone who graduated high school but doesn’t really know a skill. In China, I learned that unskilled labor is someone who cannot read or write and comes from a background of subsistence farming or abject poverty.
The workers typically live on the factory ‘campus’ in what the Chinese refer to as apartments, but I would call them really cramped dormitories. They work 5 to 7 days per week in 8 to 12 hour shifts, depending on the factory’s orders. The factories are typically not air conditioned or heated, and China is both very cold during the winter and brutally hot during the summer.
The workers have traveled a long ways to work in these factories. By hook or by crook, they arrive from far away to make better lives for themselves and those close to them. Many of them will spend a considerable portion of their income making sure that their children and the children of family members can attend school and enjoy opportunity they will never experience for themselves.
But that is only the workers. The other 200 employees are of a different sort. They hold the positions in sales, operations management, engineering, and finance.
The widgets provided by this factory are marketed on a global scale, likely they are components found in a product you own and use every day.
The factory actually faces very stiff competition not only from other factories in China, but Korea, Vietnam, Indonesia, Malaysia, and even one or two in developed countries.
To keep these products competitive, the factory must hire good engineers. Imagine, the entire company’s product line is reliant on how clever these engineers are. The owner of the factory is willing to spend good money on staff to make sure that the factory is not left behind and can continue to grow and gain new customers.
Of course, getting new customers requires good sales people. What is it worth to hire a salesperson that can bring in $15 million in new business? And what is the cost of losing a salesperson managing accounts worth that much to a competitor?
Managing all those workers is a logistical miracle. Imagine having a couple of bad days and finding yourself 30,000 man-hours into mass confusion? For this, the factory owner needs a good operations management in place to be sure that customers receive their orders on time at the expected quality level.
Believe it or not, calculating the cost of manufacturing something is no small feat, with some calculations heading off into advanced calculus.
Many factories have been surprised to find themselves completely out of cash because they could not accurately calculate the cost of manufacturing, and the market snapped at the opportunity to buy a product the factory was losing money on. On top of that, embezzlement is a problem everywhere in the world, so the factory owner needs to be sure that whoever is making the calculations and counting the money is not only honest, but able to spot when some of that money goes missing.
For these other 200 employees, I have observed that salaries are not that far off from those in the U.S., and that is in real terms, not adjusted spending power. Most factories have plenty of BMW, Mercedes Benz, and other nice cars parked out front that belong to these employees. It is worth noting that they pay a 50% import tariff on many of those goods, yet they wear $10,000 watches and are the ones paying
$3000 for the latest iPhone.
Many of the recent over-the-hill white-collar employees are the first generation given the opportunity to go to school by parents who would otherwise have been forced to raise them in poverty. Their parents are humble and weathered, but beaming with pride that their children have accomplished so much. Meanwhile, here in the U.S., it is unlikely that the next generation will see more wealth than the previous ones for the foreseeable future.
This is the unseen in the U.S. that is seen in China, and this seems like the argument that should be made when discussing the minimum wage.
Low-cost, low-risk labor is what growing economies are made from, so if you are working in a position of skilled labor, reducing the minimum wage will generate increased demand for your skill, which means higher pay, so vote yes to eliminating all minimum wages and share this with your friends.
If you read all of that, thank you very much.
If not, I completely understand.
Take care!
PP, California
Dear PP: The problem with putting matters in this format (free speech is more important than property rights, or any right is more important than any other right) is that it fails to incorporate the marginal revolution solution to the diamonds water paradox. Look this up. The problem with putting numbers on these things is that it quantifies the unquantifiable. These things are ordinal, not cardinal. Here’s a good reading on this: Rothbard. Murray N. 1997 [1956]. “Toward a Reconstruction of Utility and Welfare Economics.” reprinted in “The Logic of Action” Vol. I. Lyme, NH: Edward Elgar. pp. 211-254; http://www.mises.org/rothbard/toward.pdf. As for the minimum wage, I think you make very good points.
5:44 pm on January 31, 2017
