gdp's Comments

Macleans.ca : Stimulus vs Austerity 2.0

Fri, 29 Apr 2011 10:41:20 +0000

That an unfettered free-market tends to concentrate power for the very simple reason that there will always be more people who need "food on the shelves" as it were than there are those who control the supply of food. There could not very well be more people producing food than those consuming it. What you are calling a "concentration of power" is simply the division of labour. The beauty of the division of labour is that it allows individuals to get very good at their narrow tasks, leading to increased production--a crucial ingredient of increased consumption. The supply of food (or anything else) is not "controlled" only by the producers, but by the consumers as well. The way in which consumers direct production (supply) is by casting votes with currency on the goods that they prefer--this is the "democratised power" of the marketplace. Profits are earned by the businesses that best satisfy consumer wants; profits are signals to entrepreneurs to shift production to where consumers want it. The alternative to having fewer food producers than food consumers is having an equal number of food producers and food consumers. This would amount to a world in which every family spends all of its hours farming its tiny plot of land, with a few succeeding to subsistence, the rest perishing. The goal is not to have resources diversified for the sake of it; and it is certainly not to diversify resources to people and places where they will be ineptly and unproductively employed. The goal is to have resources "pooled" to their most efficient and desired uses. Resources on their own do not "lessen suffering". They must be put to productive use. Some people are better at productively using resources than others. It is the objective of the unfettered market to put the resources under the command of those who know what to do with them, you can call it "concentrating power", but it is really a concentration of efficiency--in the same way that you "concentrate the power" of catching fish to your fishing rod instead of to your wristwatch. Thus those who control can hold out beyond a "fair" price until someone breaks and takes a price for their labour that only serves to prolong their existence, not end their suffering. Economics is a value-free science. A "fair price" is a moral (value) judgement, and completely erroneous to economics (especially so for an uber subjectivist who says that "morality is just a figment of our imaginations"). The only objective way in which we can employ the term "fair price" is to say that any price agreed upon by both parties to the transaction is fair, if either party thought the price unfair, the transaction would not take place. Furthermore, your scenario is unrealistic. If the bounty of nature were such that food-yielding land amounted to no more than some tiny swatch of the earth, or that only one or two well-endowed geniuses knew how to turn a buffalo into Buffalo wings, then there would be no human existence to prolong. If Big Bad Corp. wants to obtain a monopoly over food production it would require buying-up every little square of farmland along the Reading Railroad. What price would the last remaining little farmers deem "fair" when their land prices are soaring due to shrinking supply and their sales (food prices) are booming due to speculators reacting to the concentration of market share? How difficult is it for remaining producers to out-compete a company that is expending so much capital on land acquisition? According to the logic of the Iron Law of Wages, we could as easily say that those who control the supply of resources must inevitably accept prices that "only serve to prolong their existence[s], not end their suffering[s]", because the manufacturers of final goods can "hold out beyond a fair price until someone breaks". It is never assumed (and shouldn't be) that land rents and raw materials will earn their owners merely a meager subsistence. But they, like labour, are resources required as inputs for the production of final goods; and they are subject to the same determinants of price. As Hayek's coach, Ludwig von Mises, wrote: The age of laissez faire for which the iron law and Marx's doctrine of the historically determined formation of wage rates claim validity witnessed a progressive, although sometimes temporarily interrupted, tendency for real wage rates to rise. The wage earners' standard of living rose to a height unprecedented in history and never thought of in earlier periods.

Macleans.ca : Against leaders debates

Wed, 30 Mar 2011 15:33:47 +0000

I can already hear the shouted slogans: "Do you smell what the Bloc is cookin'?"

Macleans.ca : Against leaders debates

Wed, 30 Mar 2011 15:22:49 +0000

I thought we'd reserve that for Question Period. And my money's on Hulk Harper.

Macleans.ca : Against leaders debates

Wed, 30 Mar 2011 07:28:45 +0000

In the interest of increasing viewership of our political debates, why not adopt a format that has proven itself successful? I'm suggesting, of course, making the debates a reality TV series. The show will consist of weekly debates. Each week, viewers will telephone vote for the candidates they thought performed best; the candidate with the fewest votes will be eliminated from the race. The last remaining candidate gets to form the government. We'll call it: So You Think You Can Govern; or, Canada's Next Top Minister.

Macleans.ca : Carney: This time it's different

Sun, 27 Mar 2011 18:48:07 +0000

...there is a considerable amount of irrationality in commodity pricing as a result of such policies as quantitative easing and so forth. The fiat money has had to go somewhere, and one of those places has been to drive up commodity prices, esp. oil. Do your fellow graduates of the Robert Mugabe School of Monetary Policy know that you are blaspheming in this way? I take it then that you have recanted your "money is just a token", let's print our way out, prescriptions for economic health. I'm glad to see it.

Macleans.ca : The difference between passage and defeat

Wed, 23 Mar 2011 17:18:51 +0000

That's some catch, that Catch-22.

Macleans.ca : The return of economic risk

Wed, 23 Mar 2011 01:26:19 +0000

What happens to those whose standards of living depend on cheap credit when interest rates spike? What happens when working people's pension funds collapse? What happens to fixed incomers when inflation accelerates? What happens to the booming number of retirees relying on government cheques when people stop buying treasury bonds? What happens to small businesses when taxes increase? What happens when governments can't meet their pension promises to their public sector unions? What happens when the yuan appreciates and all the cheap imported goods become less cheap? What happens to capital goods when investment declines?

Macleans.ca : Church of Scientology builds new headquarters in Ontario

Tue, 15 Mar 2011 20:13:56 +0000

"This so-called new religion is nothing but a pack of weird rituals and chants designed to take away the money of fools. Now let us say the lord's prayer 40 times, but first let's pass the collection plate."

Ludwig von Mises Institute of Canada : Portugal's Plight: Social Democracy at Fault

Tue, 15 Mar 2011 04:15:07 +0000

An informative read. Thanks.

Ludwig von Mises Institute of Canada : Conservatism vs. Libertarianism

Sat, 12 Mar 2011 21:08:38 +0000

Is not the history of liberalism--prior to the modern era in which "liberalism" became just a euphemism for "welfare-statism"--the history of the struggle for individual rights--freedom of expression, freedom of trade, freedom of religion--in opposition to the absolute Church/State monarchs of Europe, i.e., the Conservative Order?

Ludwig von Mises Institute of Canada : Conservatism vs. Libertarianism

Sat, 12 Mar 2011 01:21:00 +0000

Does conservatism really have a deep suspicion of collectivism? I suppose this would depend on what political heritage one is conserving. I have always thought that a helpful synonym for Conservatism would be Traditionalism--the belief that something is good because it is old. Traditionalism is a form of collectivism; it is the desire to preserve one's tribe over time. Furthermore, conservatism is usually imbued with strong nationalistic and religious sentiments--I think the dominant faction of the Republican Party in the United States would be more appropriately labelled as the Christian Nationalist Party. Of course, the religious have strong collectivist impulses. Just look, for example, at the American conservative religious leaders who said that 9/11 was a collective punishment for the nation being permissive of various sins, like abortion and gay-marriage. I am tempted to add that conservatism's deep suspicion is not of collectivism, but of communism. Its specific antagonism to communism is not its anti-individualism, but its "godlessness".

Macleans.ca : Understanding Wisconsin

Thu, 10 Mar 2011 08:36:16 +0000

That is not what I said. If you observe my comments, you will find that none of my objections to public sector unions is that they can give money to their preferred candidates. My objections concern the protections given to the unions by the governments. This is about buying politicians, not elections. If your complaint about Conservative Party campaign financing were that it allows interest groups to trade money for privileges, then I might be inclined to agree with you. However, I view the problem as being that politicians have the power to grant privileges, not that they are allowed to spend on their campaigns the money that citizens voluntarily give them.

Macleans.ca : The Commons: Post-shame

Wed, 9 Mar 2011 19:02:43 +0000

Wait. Are you saying my local candidates don't really want stronger communities?

Macleans.ca : The Commons: Post-shame

Wed, 9 Mar 2011 05:35:04 +0000

You can drive as fast as you please in your own house.

Macleans.ca : The Commons: Post-shame

Wed, 9 Mar 2011 05:26:40 +0000

How about we allow the Conservatives to advertise as much as they can afford, but we make them whisper?

Macleans.ca : The Commons: Post-shame

Wed, 9 Mar 2011 05:24:55 +0000

Advertising is a form of speech.

Macleans.ca : The Commons: Post-shame

Wed, 9 Mar 2011 05:12:41 +0000

...the restiriction is not aimed at suppression but an attempt to make sure those with the most bucks cannot buy elections. I have always found this a curious justification for campaign finance restriction. If the state of our democracy is such that the most votes will always go to the party that sandwiches the most propaganda between slices of Republic of Doyle, then surely we are in need of much more herculean remedies than some mere spending limits. If we, as voters, are so irresistibly attracted to political advertising that we need to hide it and burn it so as to save ourselves from it, then perhaps we should defer this whole democracy thing to when we are better able to show some resistance. Indeed, it also might prove wise to outlaw all sweeties, chocolates, and similar confections, for, if a stranger were to offer us candy, how could we possibly not get in the car? If Canadians are unwilling to invest more time researching their candidates than they spend scouting their fantasy hockey pool teams, then the problem is not that our elections can be bought; but that they are worthless.

Macleans.ca : Understanding Wisconsin

Tue, 8 Mar 2011 01:10:22 +0000

Nominal vs. real values usually applies when comparing an economy over time. The real wage is supposed to factor in price-inflation to give a more accurate analysis of what has happened. If, for example, over some time period wages (nominal) double, but so do prices, then real wages have remained the same (ie., one hour of labour X, buys the same basket of products). When the worker goes to Loblaws, he is spending a wage that has a nominal value and a real value. In nominal terms his wage has decreased (from $20 to $12 in your example above). I do not mean to say that the worker's wage will have increased in real terms--that's a lot of ground to cover--but wages in general easily could ($12 buys more than it did before). The reason to expect real wages to increase is because of the increase in total output due to moving workers out of unproductive work and into productive. Also, prices of consumption goods will no longer be being bid upwards by a group with artificially high wages. And to the extent that we stop punishing business for being business it will allow the engines of goods production to start revving. I don't know why one should be concerned about the workers who don't have the capacity to acquire new skills. There are lots of people without that capacity who have never had the privilege of earning multiples of what their labour is worth. What I am concerned about is that our current system resembles a lottery--if your number doesn't come up, you deliver newspapers and are poor, if your number does, you deliver mail and are well-off. Also, I think it is appropriate to consider the amount of money the workers currently receive that is above their market rate to be charity. If you really think these workers, in their new positions, will be unable to make ends meet, would it not be better to cover the difference in official charity instead of charity masquerading as income thereby qualifying for E.I. and some of the most generous (taxpayer-funded!) pension plans? I don't think there is any hope for a transition to an unfettered economy, excepting a total collapse--which won't be very pleasant. There is simply too much at stake for the unions to concede, even if we did soften the blow as you suggested. I think the public is generally not supportive of privatising public services. Sure, they get angry when a union pushes too far, like during the recent Toronto "Garbage Strike", but for the most part they feel that to eliminate a public service would be to lose something they own--funny, I don't remember getting a dividend or refund from the savings during the garbage strike. There really isn't much Rob Ford can do. Previous mayors have granted strong protections to the unions and it is very difficult to eliminate positions, as this video explains. Also, Ford has reportedly added jobs. Thanks for sticking around.

Macleans.ca : Understanding Wisconsin

Mon, 7 Mar 2011 18:55:05 +0000

The workers will not directly benefit from the changes, certainly not in any way that they would perceive. They will not make the same amount of money for equivalent work in the private sector. They have been benefiting for far too long already, we are trying to correct the imbalance. However, the workers will enjoy the "unseen" benefit of a stronger economy, higher real wages despite lower nominal wages. When the economy devotes so many resources to unproductive work, it is like a huge parasitic weight that the economy must haul around. Freed of this burden, the economy will be able to soar to unknown productive heights. Also, the displaced workers would be free to acquire skills that would boost them to their old levels of income--and, this time, the income would be legitimate.

Macleans.ca : Understanding Wisconsin

Mon, 7 Mar 2011 05:33:57 +0000

Why would we limit ourselves to the garbagemen, litter pickers, and TTC fare collectors? They are just the tip of the iceberg. How about, for example, the people who cut municipal grass (parks, etc.) for $25/hr? It can be a little deceptive to look at the workers wages only. What matters is the cost per unit of output. Thus, productivity must be factored in. If, for example, a public sector worker earns double that of his private sector counterpart per hour, and works just half as hard, then the product of his labour is costing taxpayers 4 times what it would cost from the free market. An unfettered economy does not have winners and losers, it is not zero-sum. Redistribution, on the other hand, is zero-sum. When money is taken from some people and given to some others, there is a definite loss to some and gain to others. In your scenario, the "winners" are merely those who are getting back what was theirs to begin with. That isn't winning, it's just not losing anymore. Why it is a good thing for the private sector to stop losing is because it means the incentives in the economy are shifting from unproductive work to productive work (where they need to be). To the extent that business taxes are reduced, more money will be spent on capital investments, which are the primary source of rising real wages.