Tag Archives: Price Fixing

There Are Many Ways Of Achieving Equality… Sort Of

We’ve all heard, I hope, of the economic law of supply and demand. This law speaks of a relationship between the supply and the demand of resources, but this relationship can be misleading. There is a third and silent factor in this equation: “price”. Imagine, if you will, a see-saw. On one side is demand and the other is supply. Price is the center on which these two find balance… or at least should!

Consider mansions. It’s safe to say that we all want to live in a fine mansion, except that very few of us can afford to. The “demand” for mansions, therefore, is relatively low, because of price. But it’s obviously not fair that some people get to live in mansions while others don’t. Enter compassionate politician. As one such politician put it, “[mansion owners] have won life’s lottery”, and we know that’s not fair!

So the well-intentioned politician enacts price controls so that everyone can afford a mansion. Nice guy, he.

But then, without any changes in the supply of mansions, demand skyrockets. And guess what else. What was once an adequate supply of mansions is now a limited supply; a shortage in fact. Since all can now afford mansions, they are now “demanding” mansions. To further aggravate the situation, the supply begins to decline because there is no longer any incentive to build mansions because there’s no profit to be made.

Since bad law begets bad law, “No problem”says the compassionate politician. So a new law is legislated to deal with the mansion crisis. A lottery is instituted to determine who gets to live in the limited supply of remaining mansions. Now, everyone is equal because no one is living in a mansion because of “life’s” so called lottery, but rather, because of a government lottery. There, problem solved. Feel better now?

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Filed under Economic Science, Economics, Equality, fairness, Government, Human Nature, Politics, Supply And Demand, Uncategorized, Worldview

I Vote For A 1000% Increase In Minimum Wage

How is something so arbitrary as the minimum wage derived? Did you ever think about that? What is the minimum wage? Do you know? Well, it’s zero. Any moron ought to know that. But not so for the politician. For him, it’s an arbitrary number drawn from an entirely different science than economics; which is political science. I also know that the daily exchange of resources, which is the economy, will respond to that number in an entirely different and un-arbitrary way than the politician envisions.

But it does raise a question that deserves an answer. If politicians can arbitrary legislate what ever income they think one ought to have, why is it so low? As the mantra goes, “who can survive on minimum wage?”. So who is the real devil here? Is it the politician who legislates sub-poverty wages, or the greedy business owner who is forced to pay them?

The answer to the question depends on the perspective. Politicians survive off votes, businesses off profits. Therefore, politicians are motivated by votes, and business owners profits. If politicians, who have their own image problem, hadn’t made “profits” such a dirty word, this whole thing really wouldn’t be that difficult to understand. Still, while neither of these motivations have the worker’s best interest at heart, only one of them “profits” by fooling the moron worker into thinking that he is actually the main concern. Care you guess which one does that: the politician or the business owner?

So the bottom line is this: if high wages actually can be simply legislated, then being a man of compassion, I vote that the minimum wage be raised 1000%, and let’s be done with this poverty thing once and for all.

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Filed under Business, Economic Science, Economics, Equality, Government, Human Nature, Politics, Worldview