From: dyfl@kbs.citri.edu.au (Daniel Lam)
Subject: Re: The Lam philosophy 
Organization: Collaborative Information Technology Research Institute
Distribution: aus
Date: 18 Dec 92 03:55:40 GMT

gleeson@mundil.cs.mu.OZ.AU (Red Mountain) writes:
>Well done Daniel! You got my point. Half of it, at least. When most of the
>people are in a poverty trap, they don't have buying power to influence
>market forces, and, more importantly, they do not have the ability to 
>exercise their preferences because of their diminished power due to 
>the inequalities of the anarchist economic system. 

Who will fall into this poverty trap?  How many people?  It is my
contention that interventionist policies result in greater poverty,
rather than amerliorate it.

>If Joe Bloggs is getting the minimum wage of (say) $5 per hour for cleaning
>toilets, and suddenly Jeff K. (the fictitious premier) decides that there
>is no longer a minimum wage, and his employers decide that it would be
>better for all concerned if they paid him $4 per hour, then by your 
>reasoning, his family's standard of living would not be worse. Note well
>that I said _family_. Should he get another, higher paying job? Well, the 
>labour market is suffering from 10% unemployment, and as Joe's parents were
>poor, they couldn't afford the education required for Joe to get any
>qualifications. And as Joe has to support a family, he can't afford any
>training, which of course, his company won't provide, as it would cut into 
>profits. And should his family starve while he's looking for a job? 
>Remember, with no government, there's no unemployment benefits, and
>because he was on the minimum wage, he can't afford unemployment insurance,
>especially when the company deems him to be working in a "high risk"
>occupation...

Minimum wage laws fixing wages above their market levels lead to an
imbalance in the supply and demand of labour, and hence insitutional
unemployment.  They impair production, cause prices to be higher than
they need be, and arrest investment.

Minimum wage laws can, at best, only benefit a small group of workers
at the expense of other workers.  The widespread fixing of wages
about their potential market rates can only lead to economic
depression.

Your "case study" of Joe Bloggs is most heart-wrenching indeed.  Let
us help him by forcing his employer to pay him $100 an hour.  Sure
that would work, wouldn't it?

>You haven't been shouted down, and there is no way you can say that there
>was less poverty in the Industrial Revolution era than there is now.

When did I ever say that?  The improvement we have witnessed since
the I.R. is largely the achievement of capitalism.  What caused
poverty to be relieved was capital accumulation and investment, not
government intervention.  I do argue that had there not been a
deviation, or as great a deviation from lassiez-faire policies, there
would be even less poverty.

>Just because some of the poor were able to earn a little more money
>doesn't help your case any. What about the children forced into
>labour? What about the rich getting a lot richer at the expense of
>others? Most of the world had pure capitalist economic systems before 
>and during the Industrial Revolution. The world did not see equality
>addressed or opression and exploitation attacked until society decided 
>that government was the way to acheive it.

The children were forced into labour by the fact of poverty.  There
was simply no way they could survive otherwise; there was not enough
wealth.  Whereas before they would have died (in peaceful
tranquility, as the eulogists of the Middle Ages would say) in abject
poverty with no prospects of improvement without anybody noticing,
they now worked long hours in terrible conditions just to stay
alive.  I agree this was a most unsatisfactory state of affairs, but
to imagine that all that was needed to improve conditions was
compassion and a willingness to use the state is to believe in
magic.

It is true the rich got a lot richer, but not true that they did so
at the expense of others.  The poor, too, got richer.  Emasculating
the wealth of the rich would not, in the long run, have helped the
poor one bit and would in fact have led to even greater
impoverishment.

I'm astounded you could think that most of the world had pure
capitalist economic systems before and during the I.R.  Medieval
Europe certainly was not capitalist.  Means of production were
largely not in private ownershp.  True, there were landlords who
wielded great power.  But they did not own the land in the full sense
of the word.  They were bound to their subjects and to the land with
customary obligations.  It was impossible or extremely difficult for
them to sell their lands.  Going futher back, there were
well-developed markets in the Roman Empire during the Antonine era,
and you can argue that it was partially capitalistic.  But it was not
until the eighteenth century that people started to understand the
operation of markets.  It was the discoveries of the classical
economists that led in Britain to the demoliton of age-old and
well-respected customs and restrictions which had hampered the
market.  Without this knowledge you may stumble upon capitalism, but
it would not be lasting.  When the emperor Diocletian attempted to
improve the ailing Roman economy by imposing price controls and other
restrictions and was baffled by the failure of his edicts to achieve
what he wanted, he could be forgiven for nobody had told him of the
consequences of intervention.  The modern interentionists have no
such excuses.

That's Europe.  As for the rest of the world, where exactly are you
talking about?  There were markets in China, but there was no
long-term capital accumulation.  Where else did we have pure
capitalism?

--
	Daniel Lam			Phone 	+61 3 2822426
	Melbourne, Australia		Fax   	+61 3 2822490

In my opinion, the opinions expressed here are my personal opinions.