What does freedom mean to you? And who do you think will protect your freedom the most? Here's Giuliani's view:
"We look upon authority too often and focus over and over again, for 30 or 40 or 50 years, as if there is something wrong with authority. We see only the oppressive side of authority. Maybe it comes out of our history and our background. What we don't see is that freedom is not a concept in which people can do anything they want, be anything they can be. Freedom is about authority. Freedom is about the willingness of every single human being to cede to lawful authority a great deal of discretion about what you do," - Rudy Giuliani, March 1994.
Sounds like Newspeak to me (if you haven't read 1984, go do it now). Hillary thinks freedom should be limited when it comes to how you spend your money:
"The unfettered free market has been the most radically destructive force in American life in the last generation." - First Lady Hillary Clinton on C-Span in 1996
If these are the two front runners, I feel sorry for America. Clinton's comments are socialist, while Giuliani's are fascist. Both would seek to give power to the government while taking away individual liberty. Try googling your favorite candidate, the word "quote" and "freedom" or "liberty" and see what you come up with and post it here. Here's my favorite, pro-liberty candidate (he's easy to find quotes on):
"...politicians are not supposed to have power over us - we're supposed to be free. We seem to have forgotten that freedom means the absence of government coercion" - Ron Paul
"The moral and constitutional obligations of our representatives in Washington are to protect our liberty, not coddle the world, precipitating no-win wars, while bringing bankruptcy and economic turmoil to our people." – Congressman Ron Paul, 1987 (Note the date!)
"All initiation of force is a violation of someone else's rights, whether initiated by an individual or the state, for the benefit of an individual or group of individuals, even if it's supposed to be for the benefit of another individual or group of individuals. " - Ron Paul
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Comments: 14
Power corrupts, whether that power is in the form of a government or economic power. A leash must be placed on both.
I think there is some truth to what you are saying, but not completely. If you want to get into detail about it, check out the book "Economics in One Lesson" by Hazlitt.
First, the real problem is that we DO NOT have a free market right now. We have Corporatism, not Capitalism. Or you could call it Mercantilism, or perhaps even Fascism. The businesses and government collude to price fix and enact regulations that bar entry to new businesses. The irony is that the very "restrictions" that you call for are used by the big corporations (who can easily meet the restrictions, and actually help to design them) to keep out newcomers. Then if you try to manipulate prices, you change the supply - that is a fact that has been demonstrated over the last century. If you force prices to be low, there is less incentive to increase production, and therefore supply goes down.
As for cartels, it is very difficult for them to exist without help from the government. There is one portion of our anti-trust laws that helps prevent cartels. If two companies enter into a contract to collude on prices, that contract is null and void, by law. So at one point, one of the two companies will get greedy and drop their prices to increase their sales and profit, and the cartel gets broken. This is in stark difference to what Europe does (where these contracts are valid0 - they have tons of cartels.
The proper way to deal with the problem of people not having sufficient $ to pay for necessary goods is NOT to tamper with a free market (which, as I have said, we don't really have). The proper way would be through programs such as food stamps, which provides a safety net, but does not interfere with how grocery stores do business. To provide a more comprehensive safety net, there is the earned income credit, which ensures a minimum income through a negative tax rate below a certain amount. This program was suggested by Milton Freidman, the nobel prize winning economist, and is what we have today.
You say power corrupts whether it is government or economic. But if government is watching the businesses, "who watches the watcher"? You only get one chance every 2-4 years to hold the elected reps accountable. And you have NO opportunity to hold the unelected bureaucrats accountable. That's pretty poor accountability. I've got much more confidence that consumers can hold businesses accountable directly, since no one can force you to buy from them (as long as we have anti-trust protection, which we do - although deregulation would help even more)
Sometimes, as suggested by Mankiw, the free market equilibrium does not meet the social equilibrium. A good case in point is regarding pollution. If there are no minimum standards in place then a producer will continue to make the product at his zero profit mark which should equal the market equilibrium. There's no incentive or reason to deal with the pollution. In this case, the government must manipulate the free market system and place taxes or incentives to correct this problem.
In regard to the EIC, I think that it would be much easier to allow for persons to work for their own money. Once there is a reliance on the government to provide for its citizens, then there is a risk of creating dependency and those who don't need it feel like they are supporting those who do need it; those use qualify become used to this crutch. Producers must realize that by increasing the living wage of their employees they will increase demand, thereby increasing the price, although the stabilizing effect will bring the price at a market equilibrium which will satisfy both the producer and the consumer. Right now, the EIC is needed and necessary but only because the real living wage for the average blue collar American does not allow for inflation.
When Dubya took office, the limits for the EIC were almost $10,000 a year less than what they are now. The limits for income to receive food stamps were also well below their current standards. A wage of $30,000 a year was ample for reasonable existence, without government assistence. The environment for producers has been a thriving one, one that allows for a collapse of the free market system.
In the end, no system is so perfect that it can provide for everyone. Some government interference is needed, for pollution, fair wages, etc., while maintaining a freedom necessary for new producers to enter the market and keep the equilibrium at a socially acceptable level.
As for air pollution, I agree this is a legitimate role of government involvement. But this can be argued from a rights perspective. Air pollution affects the health of other people, and therefore must be prevented. But other regulations, or price fixing can not be traced back to rights to life, liberty, and property. In fact, most of the regulations violate the right of two people to trade freely.
I agree that inflation is a big problem that is really hurting the poor and middle class. And inflation happens due to excessive government spending. They can't pay for all the programs, so they print more money, leading to inflation.
With the EIC, a person earns more money as they earn more money, unlike welfare programs. So any work they do makes them more self-sufficient. That was why it was designed that way. Your notion that producers can somehow increase the living wage by paying more is patently false (read some economics books on this subject, like the one I recommended). What happens is that they pay the workers more. Because they are paying the workers more, but the workers aren't producing more, they must raise prices (on average the amount of profit from companies is only about 6%, so they can not take it out of profits). So when they raise prices, that new higher wage buys just as much stuff as before!
The EIC goes DOWN as the income increases. I know this because I have personally received the EIC. The closer you get to the "cut-off" wage, the less you receive when you file for it.
Although the wage thing is a chicken-egg debate, this country had the highest standard of living among the middle class when the wages offered were decent and although there was inflation, (it takes a graph to show you the movement, but there's an increase in demand, followed by an increase in supply, the new equilibrium is set, but then there is another move in demand due to the price increase which returns the price back to the original equilibrium 1. Adjustments continue to take place all the time.
Of course wages increase production costs, which reduce the supply creating a shortage, etc.. But, there are times when businesses decrease the wage for no other reason than to increase profits. If a free market economy sets the wage, then this should provide a zero profit, according to the free market system. If this is already reached, then decreasing wages only reduces demand in the long run, although it provides short term increase in profits for the producers.
I know this happens, because I was at a meeting personally where my upper management told us to decrease the starting wage because they wanted to increase the profit margins for the company. This was where I stopped believing in the free market's ability to handle everything for itself and learned of its vunerability.
If a business has zero profit, why in the world would anyone ever invest in starting a business? This is insane to push for zero profits in business.
Labor follows the same laws of supply and demand that goods do. If they company thinks they can decrease wages, and you won't go to another company, then they can do that to increase their profits. What happens then, is other people see those large profits, start up competing businesses, and then the amount of labor demand increases, and then the workers wages can go back up.
The book on economics that I suggests focuses on looking not only at the direct effect of decisions, but also on the hidden, indirect effect. In your case, you saw the lower wages, which is certainly tragic. You didn't see the incentive to start up a competing business. I also suspect that you fell victim to some of the collusion between government and businesses (regulation, subsidies, etc). The tragedy, is that you are now asking for more controls on businesses, which is going to wind up increasing this effect.
There is an extremely strong correlation between economic freedom and GDP, average wage, low poverty levels, and high life expectancy.
Good discussion. I agree that this was the intent of the founding fathers. They studied Locke who proposed the concept of negative rights (that no one could take your life liberty and property), and it was the role of government to protect. I strongly feel we have gone so far beyond that. I am not an anarchist - I'd be happy to return to a Constitutional government that limits itself to the protection of our rights (as defined by Locke).
Well said! I completely agree.