My, this is turning into quite the lively exchange. I have another obligation right now (a Lisp meetup -- say, why aren't you here ;-) but I wanted to get this in before I fell too far behind.
Sometimes the hardest things to explain are the ones that seem obvious to the person doing the explaining. I have found that at root these kinds of disconnects are usually caused by a disconnect in some foundational assumption. Unearthing that assumption is never easy, but it is always enlightening, and so these efforts are worthwhile. But it is important as a first step to achieve clarity on exactly what the underlying disagreement actually is.
I think you go too far to claim that it has been established that higher tax rates cause higher growth, and lower tax rates cause lower growth.
I don't claim this, or at least I didn't intend to (and if I did claim it I retract it now). What I am doing is pointing out that if you look at the historical data in the U.S. over the last 100 years, higher taxes are strongly correlated with lower unemployment and vice versa. The only conclusion I draw from this is that the claim that raising taxes kills jobs is (almost certainly) false.
Second, I am not a bleeding-heart liberal. I am a born-again capitalist. I understand how the free market is supposed to work. I understand the concept of a clearing price. I understand that grain usually does not rot in silos. Labor is nonetheless different from other commodities. This is one of those things that seems so obvious to me that it doesn't require explanation, but apparently I'm wrong about that. I apologize in advance if what I'm about to say comes across as condescending.
What makes labor different from wheat is that labor is made of humans, and humans are different from wheat in ways that matter. Humans are vastly more complicated than wheat. The elapsed time between sowing and harvesting a crop of humans is much longer, and a lot more effort and intervention is required. You can't just leave a human in the sun and water it and expect a useful product. Humans are less fungible than wheat. They cost more to store. If they are not stored properly their value deteriorates. And, if their value deteriorates to the point of economic-non-viability they can become devilishly difficult to dispose of. Humans can't be easily recycled or turned into breakfast cereals. In some parts of the world you can use them for spare parts, which is the natural capitalistic response, but in most of the world you will find that there are unsurmountable political obstacles to this approach.
I honestly don't know whether that analysis strikes you as cold or sensible. I can tell you with high confidence that there are a lot of people who would read the preceding paragraph and be completely horrified.
I have to wrap this up but I will point out one more thing before I go: you seem to be assuming that I think that exploiting poor people is a bad thing. I do happen to believe that, but to this point in the conversation I haven't actually said so. You've assumed it. Why? Why did you not assume the converse, that my observation that it's easier to make money by exploiting poor people was meant to encourage people to exploit poor people (because it makes it easier to make money)? I have no way of knowing for sure, of course, but I conjecture that it's a sign that underneath your hard-nosed capitalistic facade there still beats a human heart. ;-)
I'll have to defer the issues you raise with regards to the G.R. until later. TTFN.
My reaction to the horrifying paragraph: sensible! (But I get the humor also.)
My more serious reaction would be: but I could write a similar paragraph on why wheat is different from automobiles which in turn is different from container ships.
What you haven't told me, is why the particular differences you've noticed, necessarily mean that I can use economic analysis to understand the markets for wheat, cars, and ships, but it is somehow inappropriate when applied to the labor market.
OK, how about this?
> But I get the humor also.
Humor? I was (and am) being dead serious.
"Solution to two of the world's problems: feed the homeless to the hungry!"
But you're trying to be serious? With lines like, "humans can't be easily turned into breakfast cereals"? I took that as satire, right along the lines of Swift.
I believe your post here, was responding to my previous post, in particular whether the question of the basic free market mechanism of supply and demand and floating prices results in an "efficient" allocation of labor resources, just in the same way it seems to for all other goods and services in the economy. (Along with, presumably, suffering from the same kinds of potential market failures as any other market.)
You listed a bunch of ways that humans are different from wheat, but I don't see how any of them address the question of whether there is an overall superior allocation of labor than the one settled on by the free market equilibrium.
If you don't like the market solution, it seems that you need to explain either: (1) why all of capitalist economics is misguided; (2) why there is some specific failure of the labor market that falls into one of the (few!) well-known types of market failure; or (3) why humans, as a commodity, have some specific property that puts them outside the assumptions of how capitalist market theory solves the societal problem of the allocation of scarce resources.
And yes, I get the gut-level reaction we all have of, "you can't treat people like numbers!" But I think it's much harder to come up with a different allocation that is clearly superior (on net) to the market one.
> But you're trying to be serious? With lines like, "humans can't be easily turned into breakfast cereals"?
Yes. Do you dispute that humans can't easily be turned into breakfast cereals? (Actually, I supposed we could use them as fertilizer for the wheat crop, but I hope I don't have to explain why that would be missing the point rather badly.)
> I took that as satire, right along the lines of Swift.
No, if I were being satirical along the lines of Swift, I would have said something like, "What should we do with the surplus humans? Maybe we should invest in a research program to see if we can figure out how to turn them into breakfast cereals."
You called my analysis of what to do with excess humans "sensible." I'm calling your bluff. Part of that proposal was to use excess humans for spare parts. So why not for food?
> You listed a bunch of ways that humans are different from wheat, but I don't see how any of them address the question of whether there is an overall superior allocation of labor than the one settled on by the free market equilibrium.
You are missing the point. Before you can even discuss what is "superior" you have to choose a quality metric against which to measure the outcome. (I'll be writing a whole post about this because apparently this point needs reiterating.)
> I think it's much harder to come up with a different allocation that is clearly superior (on net) to the market one.
I suspect there are employees at FoxConn who would disagree with you.
Ron said "You called my analysis of what to do with excess humans "sensible.""
I didn't see a paragraph that talked about what do to with "excess" humans. For that matter, this is the first I heard that there are any excess humans. What a curious concept.
What I saw was a paragraph that listed differences between humans and wheat. "Wheat can do X, but unlike wheat, humans cannot do X."
That seems (to me) a different topic than "what can we do with excess humans?"
"there are employees at FoxConn who would disagree with you."
You can always directly improve the life of some specific individual. That's not the task we're solving. Instead, you need to show that your proposal is better overall, for all humans (including, for example, the Chinese peasant farmers back in the fields).
It's not enough to point out that there are some costs (no matter how tragic). To figure out whether it's a net gain, you have to add up benefits in addition to costs. That's the only way to compare proposals.
We all have a moral intuition, that a human life is qualitatively different from mere "stuff". And that no expense is too great, if it were to save even a single human life. But the consequences of that thoughtless intuition are disastrous. A human life is not worth infinite amounts of money.
> I didn't see a paragraph that talked about what do to with "excess" humans.
Sorry, I was being careless with terminology.
"And, if their value deteriorates to the point of economic-non-viability they can become devilishly difficult to dispose of."
"Excess humans" was just intended to be shorthand for "humans whose market value had deteriorated past the point of economic viability" i.e. to the point where the market value of their labor is less than the cost of maintaining them in good working order (i.e. the cost of keeping them housed, clothed, and fed.)
> Instead, you need to show that your proposal is better overall, for all humans
First, I don't believe I've made any proposals (beyond raising taxes on rich people, but that's a separate topic). The closest I've come to making a proposal in this thread of the conversation is to suggest that rich people can make more money more easily by taking unfair advantage of (i.e. exploiting, since I'm getting into trouble by not being precise with my terminology) poor people. What is curious here is that you at once seem to both support this notion, but also assume that I am being Swiftianly satirical in proposing it (if I were proposing it, which I may or may not be. I have not yet revealed my position on that.)
And second, I need show no such thing. Where is it written that being "better overall for all humans" is the one true quality metric? Being "better overall for all humans" is not even well defined! That is part -- a BIG part -- of the problem.
> A human life is not worth infinite amounts of money.
I agree completely. So what is it worth? Simply what the market will bear?
That is not a rhetorical question.
Ron: there's a big difference between offering someone a voluntary job (which may or may not be fairly labelled as "exploiting"), vs. contemplating grinding them up into breakfast cereal.
It was the second that seemed satirical. The first is a serious topic, worthy of discussion.
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