Labor IS different

[Nth in a series]

Don,

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.