Disspelling Minimum Wage Myth.

I think there are many problems with free market economists--primary among them being that markets can't really be free. Some can be close and exhibit many of the characteristics that the theory states... but, there are always problems. It is inextricably linked to politics. If you look at how the U.S. uses our political power and foreign service, one of their main goals is to help U.S. business. The assumption of rational thought which is necessary in a market system only applies to a limited extent as well. You have all kinds of social barriers like "buy American" or many of my East Asian friends who find those goods superior. Not to mention that we don't have a free labor market while we have closed borders. But, people like Adam Smith didn't even believe the free movement of capital was a good idea--he thought that should be limited or the state would die, but today we take that as a necessary part of free markets. I think there are all types of problems... and that doesn't mean you should ignore free market economists but they do not preach Truth, they just give insight into how we construct our economic system. But, we can't ignore the social aspects to this system.

However, I thin the minimum wage as a means to deal with poverty is stupid. I would rather have no minimum wage and have the government help in other ways. Freer markets help to increase overall wealth... and to an extent lower taxes have helped a lot (good examples being some of the states in Eastern Europe that kept industrial taxes low). A country needs to decide if they want to help the less fortunate or not (I'd vote yes on that) and then make policies that best do that. I would rather help people out with sub-living standard jobs in a free market than have more unemployed because of a minimum wage which acts as a disincentive to hire. The minimum wage is a quick thing that politicians can do to look good to their constituents... but, it really doesn't solve the problem. I have no problem with curbing capitalism to help people... but, I think we need to do that in efficient ways... because even if capitalism is amoral... it does have its own logic.

Jam it back in, in the dark.

Quote:

Free market theorists don't preach an "untruth" it's just that Free Market theory assumes that the state is an impediment to exchange, not a facillitator of it.

But without state regulated mechanisms there is no market. You wouldn't have property rights. You wouldn't have stock markets or any of the large institutions that need state legitimization to exist. Without the state you don't have confidence in money. The state can be an impediment to efficiency in many ways, yes. But there is no such thing as a free market and the state is necessary.

I also don't think the free movement of capital will destroy the state. It has caused problems in some cases but we have relatively free movement in some places and it has been a good thing for growth. Of course, you have problems like what happened with Long-Term Capital Management.

I'm speaking in generalization because I haven't closely read very many free market theorists. I just think the notion that the state is only a hindrance is silly, because the state completely enables the whole system.

There's nowhere I can't reach.

I erased my other answer. :O

1. Yes. But, these are all political entities that interfere with markets for their own interests. Hegemons help to make markets work in their interests and, more subtly, help shape the discourse about what is a free market. That's why I think the institutions necessary for free markets often help to curb market freedom. There is definitely a tension there.

2. Yep.

3. Yep, although I'm not sure that gold is really a hard backing. If its perceived value goes away it has the same problem as paper money.

4. I'm not sure that you can argue that Somalia has a free market. I know little about Somali ethnology but I presume that to some degree areas still work on kinship ties rather than market principles--because they are so underdeveloped. Also, the best argument against them having a free market is that there is really little exchange of information. Without information to make decisions you don't have free markets--or so I was taught.

Capital movement: Possibly. I think states can benefit from states have access to force so they can stop free movement when they deem it necessary. So, I think it could be free as long as states think it's helping them. Once their arms industry flees the country they will cry national security and put holds on capital movement. This goes back to point 1. If free markets aren't perceived to benefit the state they will often act to curtail it.

I think.

This thing is sticky, and I don't like it. I don't appreciate it.