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the_age_of_stupidity

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  1. Workers fought and all for no reason, in fact they put back real wage rates. The free market by improving our capital structure raised real wages. Not organised cartels of employment unions. We all know the dark days in the 70's when unions did such deeds in the name of the 'people'. Inflation. Stagnation. Nothing got done, real wages continually fell. Ah yes China. A misunderstood beast. Ask yourself this question then. Why do Chinese people - under their own will - work in these such factories? Because its that or no money. It amazes me how short term our "Western" memories are. Go back 150 years - we sent our Children to work in terrible conditions. Do you think the parents back then wanted to do this? No of course not - they did it because they were too poor. Why do we not do it now? Because the free market has enhanced our capital structure meaning 1 or 2 parents now only need to work to put food on the table along with the plethora of other gadgets. Christ - 200 years ago our ancestors starved on many occasions - you think China has it bad now - they had it worse then. And then we could come to the Mao era - hundred flowers, great leap forward and the cultural revolution - all resulting in 10's of millions of deaths. Maybe you should google these events rather than some emotive propaganda put together by anti-capitalist. I think they have it a lot easier with the free market.
  2. It's funny how our nation didn't have a minimum wage all the time until 1997 and survived. In fact prospered as we were the richest nation in the world at one point. Minimum wage doesn't help you. Its all relative. If your wage was to drop (depending on your jobs economic productivity, which it may not) then prices of other goods and services would drop in relation as many other companies could cut costs. It would also mean more jobs to offer people as previously jobs that were not economically productive enough to employee people for minimum wage become viable again. This is in effect would offer increased competition for lower skilled labour thus putting a bottom on labour prices. I'm a software developer - not some rich 'fat cat'. But why are my wages not chased down to 10p by employees? In your logic they should be as my line of work has no bottom apart from minimum wage. Its called economic productivity - the market determines the price for my labour. If companies offer anything less then this they won't find anyone to fill the post, or not for very long. Simple economics. Same with your company.
  3. No, the reason people wouldn't take the 10p an hour job is because they could find higher paying wages - wages don't just drop to nothing without government support. But the point is the freedom of individuals should be allowed to find how much they are willing to work for and what the real value of their productivity is. For a start prices are only as high for certain goods because of government policy. Thats what this whole site is about right? Government policy to inflate the housing market by inflating the currency. Same with other products in the economy. There would be housing based on peoples income. If lower wages dropped then so would the price of lower cost housing (providing the government weren't again handing out benefits etc and distorting the market). Slavery is a very emotive term and I'm afraid doesn't apply where people have the freedom to choose what they want to do. Minimum wage is the same as setting a ceiling for the price of bread. Do you think its rational to set the price of bread to a maximum of 10p a loaf so as to increase peoples purchasing power? Do you think it is that black and white? Prices are there for a reason.
  4. No one asks them to take the job, so I think its a bit dramatic to label it as slavery. Ethics can be dealt with at once - if you don't want to do a job don't take the post. Is it ethical if an employee offers 10p an hour for a wage? Of course it is, but its stupidity as he would never find anyone in this country to fill the post. Minimum working conditions, the free market again solves this one. Why don't any of us work 12 hour days under horrible conditions as we did 100 years ago? Simple no one would take the job and would opt for other jobs that exist. Its the embracement of a free market that solves working conditions and raises them. People who believe in the minimum wage have been led to believe that this enforces a minimum standard of living on people when in fact it causes unemployment and prices to rise on many goods therefore negating any gain they obtain. Its like the government would have you believe we can print out way to prosperity, again a policy that hurts the poor the most.
  5. Shame. The backbone of economic calculation is driven by prices. I think they still think a select few can plan the whole complex economic system with quotas, formulas or something else that is truly "ingenious". Guess thats why those systems always collapse. They too clever for their own good
  6. Of course its a price! You sell your labour to an employee. No different to them buying raw materials.
  7. The minimum wage. Such a misunderstood concept similar to our friend socialism. A minimum wage hurts the poor. It's as simple as that. Globalism is just a big marketplace, that enriches everyone who wishes to take part. It hasn't caused the crisis and neither has free markets - its the worlds governments fault - the US, Germany, Greece, China, the UK and all others - every single one has played their part. Germany is on its ***** because it had to take on East Germany in 1989 and is still subsidising the country for at least the next decade. Now it has other basket case countries to contend with and that's why its going to be on its **** for the foreseeable future. For further information explaining the minimum wage see: minimum wage There are a few probing questions, some of which I think advocates of the policy need to ask themselves.
  8. China are not actively pursuing devaluing their currency, they just peg it to the Dollar as the communist party are haunted by episodes in history where developing countries or nations moving from communist to capitalist systems have had currency chaos in the markets. Of course the price should be set by the market and currently this isn't doing them any favours. (1) Regarding worker inflation - workers don't cause inflation, inflation is caused by an expansion in the money supply. If workers don't demand pay rises in the short term then there pay in real terms goes down and they have less opportunity to save. But other costs are unavoidable and these push prices up. Eventually people begin to demand pay rises (Union action, people moving jobs etc) and become wise to the inflation. (2) How does housing costs fall if you attempt to devalue? Housing costs may look to fall, but when you have to pay more for your energy and food then you have less money for your housing. Plus what happens if you are heavily dependant on external capital (like us) and that flees as people become sick of a depreciating currency? Interest rates rise. Ok so what if workers costs don't increase? People have a lower standard of living. People become complacent as theres no need to think of new ideas for products in the market, they can just devalue their wages constantly - in effect becoming a low cost destination. Of course it causes the moral fibre of society to weaken - one of the reasons for the UK's relative decline in industry during the 60's and 70's was the fact they kept deluding themselves with currency devaluations. I admit devaluation is the easy short term option as you can give everyone a paycut by stealth as people look at nominal pay, not real terms pay. So in Greece people don't like to see their pay packet fall. But devaluation never works and never will. If it all was that easy why don't we just keep devaluing the currency all the time, if its that easy to obtain prosperity? Robert Mugabe believed so.
  9. Everyone seems to have some valid points at places here but I will try and answer how the BoE setting of interest rates is first a disaster and second is nothing different to a Communist Quota System. BoE interest rates are the rates it lends money to the commercial banks. The commercial banks can then (through various instruments and Fractional Reserve Banking) lend money to people, at their own rates. These will be generally be higher than the BoE rates as a) the BoEs rates are currently negative compared to inflation and there is a risk of default etc. Therefore the BoE can never set market interest rates. What their rates dictate is how expansive monetary policy will be. If they only charge 0.5% from the banks then its very cheap for these banks to borrow, thus the rates can charge the public can be less. So over the short term BoE and other central banks can bring down short term rates. However if inflation gets out of hand then market interest rates go up regardless of the BoE rate as commerical banks have to protect themselves from a decline in the currency. At which point the Central Bank begins to raise them but is always behind the market and is reluctant to do so as politicians love inflation. FWIW - the setting of interest rates by central banks (basically communist central planners) causes the boom bust process we always see. It was the same when politicians controlled them. Interest rates are prices, not some mystical force that should be set based on some crazy inflation algorithm cooked up by some Government official. Like a price as they hold these down too low for too long - they have to rise to very high levels - which will happen in the decade to come. See Interest Rates are Prices for further details of the price concept. Also see Article with information on rates somewhere in there it has a description of how it works.
  10. Been a while since I've been on here. I did a post on this which hopefully explains the devaluation dynamic. UK Pound Devaluation delusions In short - no - devaluing does not help, it just continues the rot as history and economic theory proves.
  11. I work in IT for a large multi-national and I have noticed a substantial contraction of the amount of software development contracts that are being offered. IT has been proped up by large amounts of government spending in recent years. I used to work for EDS and they relied on govt. contracts so I knew this could not carry on. It's all going to implode in IT.
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