From: tcox@ssrl01.slac.stanford.edu (Tony Cox)
Newsgroups: alt.individualism
Subject: Re: International wage control
Date: 28 Jul 92 01:49:15 GMT
Organization: SSRL, Stanford, CA

In article <1992Jul27.212832.29838@bmerh85.bnr.ca>,
		robinc@bnr.ca (Robin "Frank" Collins) writes:
> In article <1992Jul17.212736.1@ssrl01.slac.stanford.edu>,
		tcox@ssrl01.slac.stanford.edu (Tony "Tarquin" Cox) writes:
>>
>>In article <1992Jul17.200539.21741@bmerh85.bnr.ca>,
>>		robinc@bnr.ca (Robin "Frank" Collins) writes:
>># 
>># I have argued that the same work done by different people should be paid
>># the same.
>># In a free market, this would be the case. The fact that this doesn't occur
>># is proof of the lack of a free market. Very simple.
>># 
>>
>>You know, I started to post what I thought would be a good example refuting
>>this statement, but decided to retract it.
>>
>>Frank may indeed have a point, at least in very restricted circumstances.
>>
>>In a "free market", with no immigration controls, equal tax laws, etc., and
>>with a constant demand for labour (in time and space), one would expect the
>>"steady state" to be that workers array themselves around the world so that
>>their wages equalize. This also assumes that every location around the world is
>>equally agreeable to live in (or at least equally appealing when integrating
>>over all workers), and that labour is instantly mobile.
>>
>>Change any one of these circumstances, and differential wage rates arrize 
>>quite natural, and in no way indicate that the market is not free.
>>
> 
>  Tony, I do believe you've got it.
>  
>  Now that we've established a theoretical position of agreement, the question
>  is whether that "free market" can actually exist (and if not, as I argue,
>  what we should think about the market that we actually have...) 
>  We may find that the socialist is the one who is demanding free market
>  conditions, and the capitalist is arguing for the distorted market by
>  which unfair advantages are gained by some by taking advantage of others
>  through the distorted market.
> 
>  Frank.

Thanks for the complement, Frank, but I suspect that you might be a little
premature.

Perhaps now is the time to step back a bit and analyze exactly what we both
mean by the phrase "Free market".

It would seem from your post that your idea of a free market is one in which
everyone is paid equally for the same work (I'll accept that the concept of
`same work' can be assessed for the sake of argument). Since this is
demonstratively not the case, you argue that the market is not free.

When I speak of the free market, however, I refer to a lack of manmade
impediments to trade between willing participants. Since there are clearly
such impediments, I argue that the market is not free. One can eliminate 
manmade impediments to trade, causing the market to become "free" in my
terms - whether this results in equality of wages we shall see.

Let me restate the conditions I suggest would lead to an equalization of
wage rates, since we now both agree on these.

	1) Lack of immigration controls
	2) Equal tax laws etc.
	3) Constant demand for labour in time and space
	4) Every location in the world equally agreeable
	5) Instantly mobile labour.

(Perhaps I should have been a bit more exhaustive, but never mind for now).

Both 1 and 2 are both obvious man-made impediments to trade, so lets just
say that in TonyVille, there are no immigration controls and the tax laws
are equal.

Can we arrange for 3 to be true? No. Clearly the number of candle makers
required in the late 20th century is far less than the number required 
100 years ago (constant demand in time). Also (for example), the demand
for agricultural workers moves around as the harvest moves up the northern
hemisphere in June-Oct, and then to the southern hemisphere in Dec-April
(constant demand in space).

Is 4 true? Of course not. Ever tried to be a beer drinker/ski bunny in Saudi
Arabia, or a Muslim in Tel Aviv? Much more agreeable to be in Newcastle,
Tahoe or Cairo.

Instantly mobile labour? There is a job opening in Ulan Bator guys - jump
to it. Forget it - I'll miss the Simpsons on Thursday.

So without manmade impediments to trade, you STILL violate the conditions
we both agree are required for equal wages. Unequal wages are the result,
and are obviously not the consequence of the lack of a free market which
I posit.


But, can we make your concept of a "free market" into a reality under
any circumstances? Not unless you:-

	1) Alter the laws of nature so that labour is in constant demand.
	2) Impose economic stagnation so that requirements for labour do
not change over time,
	3) Make everyone believe that all parts of the world are equally
agreeable and
	4) Give everyone free airline passes (at whose expense?).

Your "free market" concept is impossible, to the extent that your using the
expression is meaningless.


So do we find that the socialist is the one demanding free market conditions?
Well, I've certainly met socialists who think that they can change the
facts of life by democratic vote or more extreme measures, but
most are more intelligent. In my experience, most socialists attempt to
impose MORE manmade impediments to trade, presumably in the vain hope of
`correcting' for the uncomfortable facts of existence.

Are there `capitalists' arguing for a distorted market? Well, there ARE
business people who spend their time engineering a distorted market so that
they can take advantage of it. Happens all the time. They acquire the label
`capitalist' in many peoples eyes by having capital; however, they have no
intellectual claim to the title.

I do agree with you that the market is indeed not free. Let us indeed think
about the market we actually have. But please lets not waste time thinking
about altering the fabric of the universe - we are stuck with the one we 
have got.

Tony Cox, Stanford, CA