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Speaking as an economist, I tend to get nervous when other economists talk about circumstances where "morality trumps economics." As a profession, we have a mi

Speaking as an economist, I tend to get nervous when other economists talk about circumstances where "morality trumps economics." As a profession, we have a miserable track record on morality. Economists widely endorsed eugenics in the first half of the 20th century, for example. And many modern economists endorse a minimum wage, as eugenicists did then, but with even less regard for the harm it causes. Personally, I find it hard to entertain an economist's morality argument unless it goes something like, "We shouldn't do that because it could harm people." In this article, The Economist is telling governments to force companies to produce "large supplies at fixed prices". Even if governments had that kind of authority in free countries, and they probably don't, that sounds like a policy that could easily cause harm. Companies can't just push one lever to maximum and expect nothing else to change. But most importantly, we don't need it. Yes, we've seen some small-time punks buy up too much hand sanitizer, but the big manufacturers are being decent. As The Economist pointed out, "3M, one of the world’s biggest manufacturers of high-end masks ... has stuck to its list prices and doubled its production." So there's not very good empirical or theoretical support for this idea. But there's hope for economists - "more than half" of economists surveyed about this idea criticized it.

theschmed 6y ago
Is there another kind of argument from morality EXCEPT those that go, "We shouldn't do that because it could harm people?" Hard to take someone seriously who blithely compares genocide to a minimum wage....
- AnthonyMouse 6y ago
  > Is there another kind of argument from morality EXCEPT those that go, "We shouldn't do that because it could harm people?" The argument in this case appears to be exactly that, i.e. we shouldn't do that because those people would make too much money. > Hard to take someone seriously who blithely compares genocide to a minimum wage.... There was a lot more to dislike about eugenics than genocide. You play the same game from the other side and you get to claim that Stalin's purges are attributable to the minimum wage because minimum wage is a communist policy and therefore responsible for all the things the communists did. Eugenics is a much more mundane stupidity than that, like purposely trying to breed a lack of genetic diversity independent of "race" -- and we still do this with crops and livestock to our peril -- but back then they did it with people. This has obvious parallels to minimum wage, where people are messing with something they don't fully understand based on simplistic assumptions. And then you do things like make it harder for young people to get internships because they can't pay a living wage even though that was never their purpose to begin with, or subject desperate people to really terrible jobs with longer commutes or less flexibility or otherwise higher real costs that actually really messes up their lives because you decreed that they couldn't accept a better job that pays less. Which have serious and long-term effects on large numbers of people.
  - xphilter 6y ago
    You are comparing adjudicating the worth of a non changeable attribute of a human to the minimum cost of labor. If you can’t see the difference between the two then I don’t know what to do. There slippery slope arguments then there are just silly arguments.
    - AnthonyMouse 6y ago
      There are many people with disabilities that prevent them from doing ordinary work but who could do certain jobs with lower productivity. A minimum wage is essentially telling these people that they are worthless and should sit in a room doing nothing even though they want to work and feel useful, and in many cases this makes their lives substantially worse because they both feel useless and have less income when they can't work. That actually sounds kind of a lot like what they did to some of the victims of eugenics.
      - xphilter 6y ago
        Right. And there’s no way to have an exception just like there is today. I can’t tell if you’re all be obtuse on purpose. Is this some sort of political movement to equate minimum wage to eugenics? As is now conservatives care about the poor, disabled, and minorities? What’s crazy is that I agree with OP of this thread that economists should refrain from saying what’s moral. But that’s because most economists are just old white men, and I doubt they’re able to judge what’s moral better than others.
- AndrewUnmuted 6y ago
  Eugenics and wage “protections” like minimum wage are both tied to the same racist underpinnings. The minimum wage was established to price out black workers.
  - inreverse 6y ago
    Was the minimum wage in, for example, New Zealand established to price out black workers?
    - logicchains 6y ago
      I don't know about New Zealand, but in 1912 Arthur Holcombe of Harvard University said about Australia's minimum wage: "[The minimum wage will] protect the white Australian’s standard of living from the invidious competition of the colored races, particularly of the Chinese."
  - danans 6y ago
    Lots of rights enjoyed by all today in th US - the most important being voting - were originally established specifically at the exclusion of people of color and women. The problem wasn't the rights themselves, it's that they were purposely offered to white men only. Therefore it's deceptive to attack the minimum wage as being any more racist in origin than the right to vote is. Much of the law has deeply racist origins that has only been reformed in recent decades, and even then not completely.
    - logicchains 6y ago
      That's a completely different thing. The minimum wage wasn't originally only offered to white people: it was mandated for everyone, for the purpose of rendering those with lower-paying jobs (people of color, immigrants) unemployed, or preventing them from competing with whites. The briefing paper at https://www.cato.org/sites/cato.org/files/pubs/pdf/bp017.pdf https://www.cato.org/sites/cato.org/files/pubs/pdf/bp017.pdf discusses this. "The law provided that all federal construction contractors with contracts inexcess of $5,000 or more must pay their workers the "prevailing wage," which in practice meant the wages ofunionized labor. The measure passed because Congressmen saw the bill as protection for local, unionized[12] white workers' salaries in the fierce labor market of the Depression.[13] In particular, white union workers were angry that black workers who were barred from unions were migrating to the North in search of jobs in the building trades and undercutting "white" wages.[14] The comments of various congressmen reveal the racial animus that motivated the sponsors and supporters of the bill. In 1930, Representative John J. Cochran of Missouri stated that he had "received numerous complaints in recent months about southern contractors employing low-paid colored mechanics getting work and bringing the employees from the South."[15] Representative Clayton Allgood, supporting Davis-Bacon on the floor of the House, complained of "cheap colored labor" that "is in competition with white labor throughout the country."[16]"
deleted 6y ago
[deleted]
h0l0cube 6y ago
> And many modern economists endorse a minimum wage, as eugenicists did then, but with even less regard for the harm it causes. What are the harms of a minimum wage? Do you have any empirical sources to back that up?
- AlexandrB 6y ago
  I love how the parent stakes out several moral positions but tries to present them as objective truth or just “the way things are” with no evidence presented. Clever. In my experience, once you get past the basics, economics is largely about dressing up ideology in the trappings of science. More generously, economics seems to be most similar to philosophy with competing schools of thought that differ primarily in what assumptions and axioms they choose when modeling human behavior.
  - p1necone 6y ago
    This seems to be a very common tactic with American right wingers (on the internet at least) - speak/write as if the actually controversial/differing parts of your belief are obviously true, and only go into detail on what logically follows from those axioms.
- dantheman 6y ago
  Minimum wage puts a floor on the amount of value necessary for someone to be employable. Many people, especially those just starting out can't produce that much value.
  - adjkant 6y ago
    The irony of this comment is that it is exactly missing the morality in an economic situation, the claim being that if you are capable of work and are trying your best, you deserve to have enough pay to live off of. Minimum wage does not price people out of jobs, it puts a cap on the profit that a corporation can squeeze out of its workers. Employers who would be paying under it are simply not viable moral businesses, they would be businesses based off the exploitation of its workforce. Now we can have economic arguments about what is true here, but the purpose of minimum wage today is a moral one and that must be factored in.
giardini 6y ago
nonidentified says>"As a profession, we have a miserable track record on morality."< Hah! As a profession, you've had a miserable track record on _economics_! The profession should be academically "tarred, feathered and ridden out of town", departments dismantled and the models handed over to Operations Research departments along with a strong warning.
- labster 6y ago
  I wouldn't do that. It's widely accepted among economists that reducing funding for economics departments would be terrible for the university budget as a whole.
p1necone 6y ago
"And many modern economists endorse a minimum wage, as eugenicists did then, but with even less regard for the harm it causes." Come on, you know the idea of a minimum wage is pretty widely accepted as a good idea by a lot of people, including (most? edit: apparently majority, but not by much) economists. You can't just phrase something as if it was widely accepted as true and make it so. Don't get me wrong, you're absolutely allowed to voice your opinion on this, but the way you've phrased it strikes me as being rather intellectually dishonest.
- logicchains 6y ago
  >Come on, you know the idea of a minimum wage is pretty widely accepted as a good idea by a lot of people, including (most?) economists. From a recent study https://cei.org/blog/what-do-economists-think-about-minimum-wage https://cei.org/blog/what-do-economists-think-about-minimum-... : "A new poll of professional economists finds 74 percent of respondents opposing a $15 per hour minimum wage—and nearly a mirror image of non-economist public opinion, which is nearly a mirror opposite. 84 percent believe it would have a negative impact on youth employment levels. 43 percent favor eliminating the minimum wage outright. Only 12 percent of respondents identify as Republicans, which is roughly representative of the profession as a whole, with 35 percent identifying as Democratic and 46 percent as independents."
  - p1necone 6y ago
    That sounds like it supports my statement? 74% oppose a specific increase, but only 43% oppose having a minimum wage. (That wording is ambiguous as to whether that's 43% of 100% or 43% of 74%, but both are < 50%)
    - logicchains 6y ago
      I suppose it's the language: it would support "accepted by a majority of economists", but I don't think 57% support counts as "pretty widely accepted as a good idea by... most economists".
danans 6y ago
> And many modern economists endorse a minimum wage, as eugenicists did then, but with even less regard for the harm it causes. You are comparing the moral stance of supporting eugenics with the moral stance of supporting a minimum wage? Are those just the first two random moral stances taken by economists that you recall, or are you trying to color the perception the latter with the true horror of the former?
- adjkant 6y ago
  > Speaking as an economist > As a profession, we have a miserable track record on morality. You can't say they didn't warn you!
- roenxi 6y ago
  Eugenics had wide scientific support; it wasn't a horror when they proposed it. A seriously high minimum wage ($100,000/year for example; no other policy changes) would probably lead to a period of horror and mass unemployment. Possibly famine, I don't know what would happen if it no longer made economic sense to employ people to transport food around. Maybe they are already high earners, what do I know. A minimum wage is saying "this work isn't worth doing if you can't justify paying someone $minimum". That isn't a morally positive or morally negative position without more information. And it is certainly not more morally sound than "we should be proactive in making sure that children are born with the best chance at life" which is the positive spin on eugenics. Economists should not be making moral arguments. They get them wrong too readily.
  - imtringued 6y ago
    Other people think the concept of price controls is tied to morals when it comes to minimum wages. When you consider our democratic system it becomes pretty obvious. You need slightly more than 50% of the votes. So the minimum wage is picked so that at least 50% of the population earns more than it. Therefore by definition a minimum wage chosen by politicians is going to set it to a really low value that will then be associated with poorer people. Therefore the minimum wage gains a reputation of helping poorer people. But at the end of the day it's just a price control. Minimum wage has nothing to do with morals. It's just a rule that says who can or can't have a job. It doesn't actually give people a minimum wage job. You can set it high or low. If it is too low then it does nothing. If it is too high then it prevents people from getting a job. The minimum wage must always follow the market, because the market won't follow the minimum wage.
yawaramin 6y ago
> Speaking as an economist, I tend to get nervous when other economists talk about circumstances where "morality trumps economics." Some examples where morality trumps economics that might help to calm you: - Child labour is illegal in the civilized world - Slavery is illegal in all or most countries (despite slave labour being more, um, economical than paid labour) - Emergency services like fire, police, paramedics don't demand payment up-front. > Companies can't just push one lever to maximum and expect nothing else to change. They should expect profits to fall. That can happen during a pandemic. Act of God and all that. > But most importantly, we don't need it. Yes, we've seen some small-time punks buy up too much hand sanitizer, but the big manufacturers are being decent. And we should gamble our lives on the continued decency of profit-maximizing corporations.
- kortilla 6y ago
  Slavery isn’t a good example because that requires government enforcing the ability for people to own people as property.
  - mytherin 6y ago
    That makes no sense. People can enslave others without any "government" being involved, and they have done so for thousands of years. The people enslaving the others just need bigger weapons so the slaves cannot revolt. Government can prevent people from being enslaved. But without a government being involved, slavery will still happen. In fact, it will happen much more often as is evidenced by the fact that modern day slavery happens primarily in countries where governments are not powerful enough to stop it.
- nickff 6y ago
  In many countries, child labor wasn't banned because of moral reasons, it was banned as an anti-competitive measure against un-mechanized factories. Slavery was enforced (and subsidized) by many governments; it wasn't exactly a creature of the free market. Segregation was similar. Indentured servitude may be a different matter, though it brings up some more complicated questions. "Not demanding payment up front" has nothing to do with morality; I've gone to many nice restaurants where they didn't charge me up front, and they weren't doing it because they were saints. The history of fire-fighting is also interesting, as it was private for quite some time in many places; insurance companies don't like buildings burning down. You say that companies should expect profits to fall, but do you expect the companies to drive themselves into the ground (thus leaving their employees unemployed) in an attempt to do a little to help? Most companies spend about 50% of their revenue on labor, and have a profit of less than five percent. That means that a 10% increase in labor costs (think overtime) means they make no money, so they really can't afford to reduce their margins much, and remain an extant firm. You say we shouldn't gamble our lives on the continued decency of for-profit corporations, but I have more confidence in their ethics than those of the common man. As we saw with toilet paper (and hand sanitizer), the average person will hoard anything they are afraid will not be available tomorrow. Companies have shown more restraint in this crisis and others.
Cthulhu_ 6y ago
I agree; to latch onto your comment, the last time (AFAIK, my history is not great) the US made sweeping changes to its production was during WW2, where they changed the economy and shifted the workforce towards the war, producing weapons, ammo, etc. On the one side it's a testament to the US' potential manufacturing prowess, on the other you have to wonder about the moral justification of it. If you take it out of context, of course, I mean they and the rest of the world were fighting some of the most morally objectionable forces at the time (the nazis and Japanese). As an aside, the way things are heading now, the world will have to unite against the US. At least for now the US seems to keep to itself for the most part.
throw0101a 6y ago
> Speaking as an economist, I tend to get nervous when other economists talk about circumstances where "morality trumps economics." Krugman invokes Rawls: > The classic argument here is, of course, that of Rawls, whose 1971 “A Theory of Justice” argued that we should evaluate social arrangements by imagining ourselves having to choose institutions and policy behind a “veil of ignorance”: what society would you prefer if you didn’t know who you would be? * PDF: https://www.gc.cuny.edu/CUNY_GC/media/LISCenter/pkrugman/why-is-price-gouging-bad.pdf https://www.gc.cuny.edu/CUNY_GC/media/LISCenter/pkrugman/why... * https://twitter.com/paulkrugman/status/1246432215422111745 https://twitter.com/paulkrugman/status/1246432215422111745
Symmetry 6y ago
I think economists have done pretty well overall. It got termed the "dismal science" for opposing slavery in the 19th century ("They'll be more productive if they get paid") and generally being against imperialism ("Can't we just trade with them?"), being against the corn laws, etc. And if I go look at the Wikipedia page Eugenics in America[1] and read through the bios of the first few supporters I can find I get Francis Galton (Polymath uninvolved in economics), John Harvey Kellogg (Doctor), Charles Davenport (Biologist), Henry H. Goddard (Psychologist), Harry H. Laughlin (Sociologist), Madison Grant (Conservationist), Karl Pearson (Biostatistician), Alexander Graham Bell (Inventor), David Starr Jordan (Biologist), Luther Burbank (Botanist), and Margaret Sanger (Feminist). I don't want to say that economists are blameless here. Henry Rogers Seager famously used eugenics as a reason for a minimun wage writing “The operation of the minimum wage requirement would merely extend the definition of defectives to embrace all individuals, who even after having received special training, remain incapable of adequate self-support.” But overall it seems that when economists disagreed with the predominant intellectual milieu they've mostly been right and they've mostly only been badly wrong when they've followed along with it. [1]https://en.wikipedia.org/wiki/Eugenics_in_the_United_States https://en.wikipedia.org/wiki/Eugenics_in_the_United_States

theschmed 6y ago

Is there another kind of argument from morality EXCEPT those that go, "We shouldn't do that because it could harm people?" Hard to take someone seriously who blithely compares genocide to a minimum wage....

AnthonyMouse 6y ago
> Is there another kind of argument from morality EXCEPT those that go, "We shouldn't do that because it could harm people?" The argument in this case appears to be exactly that, i.e. we shouldn't do that because those people would make too much money. > Hard to take someone seriously who blithely compares genocide to a minimum wage.... There was a lot more to dislike about eugenics than genocide. You play the same game from the other side and you get to claim that Stalin's purges are attributable to the minimum wage because minimum wage is a communist policy and therefore responsible for all the things the communists did. Eugenics is a much more mundane stupidity than that, like purposely trying to breed a lack of genetic diversity independent of "race" -- and we still do this with crops and livestock to our peril -- but back then they did it with people. This has obvious parallels to minimum wage, where people are messing with something they don't fully understand based on simplistic assumptions. And then you do things like make it harder for young people to get internships because they can't pay a living wage even though that was never their purpose to begin with, or subject desperate people to really terrible jobs with longer commutes or less flexibility or otherwise higher real costs that actually really messes up their lives because you decreed that they couldn't accept a better job that pays less. Which have serious and long-term effects on large numbers of people.
- xphilter 6y ago
  You are comparing adjudicating the worth of a non changeable attribute of a human to the minimum cost of labor. If you can’t see the difference between the two then I don’t know what to do. There slippery slope arguments then there are just silly arguments.
  - AnthonyMouse 6y ago
    There are many people with disabilities that prevent them from doing ordinary work but who could do certain jobs with lower productivity. A minimum wage is essentially telling these people that they are worthless and should sit in a room doing nothing even though they want to work and feel useful, and in many cases this makes their lives substantially worse because they both feel useless and have less income when they can't work. That actually sounds kind of a lot like what they did to some of the victims of eugenics.
    - xphilter 6y ago
      Right. And there’s no way to have an exception just like there is today. I can’t tell if you’re all be obtuse on purpose. Is this some sort of political movement to equate minimum wage to eugenics? As is now conservatives care about the poor, disabled, and minorities? What’s crazy is that I agree with OP of this thread that economists should refrain from saying what’s moral. But that’s because most economists are just old white men, and I doubt they’re able to judge what’s moral better than others.
AndrewUnmuted 6y ago
Eugenics and wage “protections” like minimum wage are both tied to the same racist underpinnings. The minimum wage was established to price out black workers.
- inreverse 6y ago
  Was the minimum wage in, for example, New Zealand established to price out black workers?
  - logicchains 6y ago
    I don't know about New Zealand, but in 1912 Arthur Holcombe of Harvard University said about Australia's minimum wage: "[The minimum wage will] protect the white Australian’s standard of living from the invidious competition of the colored races, particularly of the Chinese."
- danans 6y ago
  Lots of rights enjoyed by all today in th US - the most important being voting - were originally established specifically at the exclusion of people of color and women. The problem wasn't the rights themselves, it's that they were purposely offered to white men only. Therefore it's deceptive to attack the minimum wage as being any more racist in origin than the right to vote is. Much of the law has deeply racist origins that has only been reformed in recent decades, and even then not completely.
  - logicchains 6y ago
    That's a completely different thing. The minimum wage wasn't originally only offered to white people: it was mandated for everyone, for the purpose of rendering those with lower-paying jobs (people of color, immigrants) unemployed, or preventing them from competing with whites. The briefing paper at https://www.cato.org/sites/cato.org/files/pubs/pdf/bp017.pdf https://www.cato.org/sites/cato.org/files/pubs/pdf/bp017.pdf discusses this. "The law provided that all federal construction contractors with contracts inexcess of $5,000 or more must pay their workers the "prevailing wage," which in practice meant the wages ofunionized labor. The measure passed because Congressmen saw the bill as protection for local, unionized[12] white workers' salaries in the fierce labor market of the Depression.[13] In particular, white union workers were angry that black workers who were barred from unions were migrating to the North in search of jobs in the building trades and undercutting "white" wages.[14] The comments of various congressmen reveal the racial animus that motivated the sponsors and supporters of the bill. In 1930, Representative John J. Cochran of Missouri stated that he had "received numerous complaints in recent months about southern contractors employing low-paid colored mechanics getting work and bringing the employees from the South."[15] Representative Clayton Allgood, supporting Davis-Bacon on the floor of the House, complained of "cheap colored labor" that "is in competition with white labor throughout the country."[16]"

deleted 6y ago

[deleted]

h0l0cube 6y ago

> And many modern economists endorse a minimum wage, as eugenicists did then, but with even less regard for the harm it causes. What are the harms of a minimum wage? Do you have any empirical sources to back that up?

AlexandrB 6y ago
I love how the parent stakes out several moral positions but tries to present them as objective truth or just “the way things are” with no evidence presented. Clever. In my experience, once you get past the basics, economics is largely about dressing up ideology in the trappings of science. More generously, economics seems to be most similar to philosophy with competing schools of thought that differ primarily in what assumptions and axioms they choose when modeling human behavior.
- p1necone 6y ago
  This seems to be a very common tactic with American right wingers (on the internet at least) - speak/write as if the actually controversial/differing parts of your belief are obviously true, and only go into detail on what logically follows from those axioms.
dantheman 6y ago
Minimum wage puts a floor on the amount of value necessary for someone to be employable. Many people, especially those just starting out can't produce that much value.
- adjkant 6y ago
  The irony of this comment is that it is exactly missing the morality in an economic situation, the claim being that if you are capable of work and are trying your best, you deserve to have enough pay to live off of. Minimum wage does not price people out of jobs, it puts a cap on the profit that a corporation can squeeze out of its workers. Employers who would be paying under it are simply not viable moral businesses, they would be businesses based off the exploitation of its workforce. Now we can have economic arguments about what is true here, but the purpose of minimum wage today is a moral one and that must be factored in.

giardini 6y ago

nonidentified says>"As a profession, we have a miserable track record on morality."< Hah! As a profession, you've had a miserable track record on _economics_! The profession should be academically "tarred, feathered and ridden out of town", departments dismantled and the models handed over to Operations Research departments along with a strong warning.

labster 6y ago
I wouldn't do that. It's widely accepted among economists that reducing funding for economics departments would be terrible for the university budget as a whole.

p1necone 6y ago

"And many modern economists endorse a minimum wage, as eugenicists did then, but with even less regard for the harm it causes." Come on, you know the idea of a minimum wage is pretty widely accepted as a good idea by a lot of people, including (most? edit: apparently majority, but not by much) economists. You can't just phrase something as if it was widely accepted as true and make it so. Don't get me wrong, you're absolutely allowed to voice your opinion on this, but the way you've phrased it strikes me as being rather intellectually dishonest.

logicchains 6y ago
>Come on, you know the idea of a minimum wage is pretty widely accepted as a good idea by a lot of people, including (most?) economists. From a recent study https://cei.org/blog/what-do-economists-think-about-minimum-wage https://cei.org/blog/what-do-economists-think-about-minimum-... : "A new poll of professional economists finds 74 percent of respondents opposing a $15 per hour minimum wage—and nearly a mirror image of non-economist public opinion, which is nearly a mirror opposite. 84 percent believe it would have a negative impact on youth employment levels. 43 percent favor eliminating the minimum wage outright. Only 12 percent of respondents identify as Republicans, which is roughly representative of the profession as a whole, with 35 percent identifying as Democratic and 46 percent as independents."
- p1necone 6y ago
  That sounds like it supports my statement? 74% oppose a specific increase, but only 43% oppose having a minimum wage. (That wording is ambiguous as to whether that's 43% of 100% or 43% of 74%, but both are < 50%)
  - logicchains 6y ago
    I suppose it's the language: it would support "accepted by a majority of economists", but I don't think 57% support counts as "pretty widely accepted as a good idea by... most economists".

danans 6y ago

> And many modern economists endorse a minimum wage, as eugenicists did then, but with even less regard for the harm it causes. You are comparing the moral stance of supporting eugenics with the moral stance of supporting a minimum wage? Are those just the first two random moral stances taken by economists that you recall, or are you trying to color the perception the latter with the true horror of the former?

adjkant 6y ago
> Speaking as an economist > As a profession, we have a miserable track record on morality. You can't say they didn't warn you!
roenxi 6y ago
Eugenics had wide scientific support; it wasn't a horror when they proposed it. A seriously high minimum wage ($100,000/year for example; no other policy changes) would probably lead to a period of horror and mass unemployment. Possibly famine, I don't know what would happen if it no longer made economic sense to employ people to transport food around. Maybe they are already high earners, what do I know. A minimum wage is saying "this work isn't worth doing if you can't justify paying someone $minimum". That isn't a morally positive or morally negative position without more information. And it is certainly not more morally sound than "we should be proactive in making sure that children are born with the best chance at life" which is the positive spin on eugenics. Economists should not be making moral arguments. They get them wrong too readily.
- imtringued 6y ago
  Other people think the concept of price controls is tied to morals when it comes to minimum wages. When you consider our democratic system it becomes pretty obvious. You need slightly more than 50% of the votes. So the minimum wage is picked so that at least 50% of the population earns more than it. Therefore by definition a minimum wage chosen by politicians is going to set it to a really low value that will then be associated with poorer people. Therefore the minimum wage gains a reputation of helping poorer people. But at the end of the day it's just a price control. Minimum wage has nothing to do with morals. It's just a rule that says who can or can't have a job. It doesn't actually give people a minimum wage job. You can set it high or low. If it is too low then it does nothing. If it is too high then it prevents people from getting a job. The minimum wage must always follow the market, because the market won't follow the minimum wage.

yawaramin 6y ago

> Speaking as an economist, I tend to get nervous when other economists talk about circumstances where "morality trumps economics." Some examples where morality trumps economics that might help to calm you: - Child labour is illegal in the civilized world - Slavery is illegal in all or most countries (despite slave labour being more, um, economical than paid labour) - Emergency services like fire, police, paramedics don't demand payment up-front. > Companies can't just push one lever to maximum and expect nothing else to change. They should expect profits to fall. That can happen during a pandemic. Act of God and all that. > But most importantly, we don't need it. Yes, we've seen some small-time punks buy up too much hand sanitizer, but the big manufacturers are being decent. And we should gamble our lives on the continued decency of profit-maximizing corporations.

kortilla 6y ago
Slavery isn’t a good example because that requires government enforcing the ability for people to own people as property.
- mytherin 6y ago
  That makes no sense. People can enslave others without any "government" being involved, and they have done so for thousands of years. The people enslaving the others just need bigger weapons so the slaves cannot revolt. Government can prevent people from being enslaved. But without a government being involved, slavery will still happen. In fact, it will happen much more often as is evidenced by the fact that modern day slavery happens primarily in countries where governments are not powerful enough to stop it.
nickff 6y ago
In many countries, child labor wasn't banned because of moral reasons, it was banned as an anti-competitive measure against un-mechanized factories. Slavery was enforced (and subsidized) by many governments; it wasn't exactly a creature of the free market. Segregation was similar. Indentured servitude may be a different matter, though it brings up some more complicated questions. "Not demanding payment up front" has nothing to do with morality; I've gone to many nice restaurants where they didn't charge me up front, and they weren't doing it because they were saints. The history of fire-fighting is also interesting, as it was private for quite some time in many places; insurance companies don't like buildings burning down. You say that companies should expect profits to fall, but do you expect the companies to drive themselves into the ground (thus leaving their employees unemployed) in an attempt to do a little to help? Most companies spend about 50% of their revenue on labor, and have a profit of less than five percent. That means that a 10% increase in labor costs (think overtime) means they make no money, so they really can't afford to reduce their margins much, and remain an extant firm. You say we shouldn't gamble our lives on the continued decency of for-profit corporations, but I have more confidence in their ethics than those of the common man. As we saw with toilet paper (and hand sanitizer), the average person will hoard anything they are afraid will not be available tomorrow. Companies have shown more restraint in this crisis and others.

Cthulhu_ 6y ago

I agree; to latch onto your comment, the last time (AFAIK, my history is not great) the US made sweeping changes to its production was during WW2, where they changed the economy and shifted the workforce towards the war, producing weapons, ammo, etc. On the one side it's a testament to the US' potential manufacturing prowess, on the other you have to wonder about the moral justification of it. If you take it out of context, of course, I mean they and the rest of the world were fighting some of the most morally objectionable forces at the time (the nazis and Japanese). As an aside, the way things are heading now, the world will have to unite against the US. At least for now the US seems to keep to itself for the most part.

throw0101a 6y ago

> Speaking as an economist, I tend to get nervous when other economists talk about circumstances where "morality trumps economics." Krugman invokes Rawls: > The classic argument here is, of course, that of Rawls, whose 1971 “A Theory of Justice” argued that we should evaluate social arrangements by imagining ourselves having to choose institutions and policy behind a “veil of ignorance”: what society would you prefer if you didn’t know who you would be? * PDF: https://www.gc.cuny.edu/CUNY_GC/media/LISCenter/pkrugman/why-is-price-gouging-bad.pdf https://www.gc.cuny.edu/CUNY_GC/media/LISCenter/pkrugman/why... * https://twitter.com/paulkrugman/status/1246432215422111745 https://twitter.com/paulkrugman/status/1246432215422111745

Symmetry 6y ago

I think economists have done pretty well overall. It got termed the "dismal science" for opposing slavery in the 19th century ("They'll be more productive if they get paid") and generally being against imperialism ("Can't we just trade with them?"), being against the corn laws, etc. And if I go look at the Wikipedia page Eugenics in America[1] and read through the bios of the first few supporters I can find I get Francis Galton (Polymath uninvolved in economics), John Harvey Kellogg (Doctor), Charles Davenport (Biologist), Henry H. Goddard (Psychologist), Harry H. Laughlin (Sociologist), Madison Grant (Conservationist), Karl Pearson (Biostatistician), Alexander Graham Bell (Inventor), David Starr Jordan (Biologist), Luther Burbank (Botanist), and Margaret Sanger (Feminist). I don't want to say that economists are blameless here. Henry Rogers Seager famously used eugenics as a reason for a minimun wage writing “The operation of the minimum wage requirement would merely extend the definition of defectives to embrace all individuals, who even after having received special training, remain incapable of adequate self-support.” But overall it seems that when economists disagreed with the predominant intellectual milieu they've mostly been right and they've mostly only been badly wrong when they've followed along with it. [1]https://en.wikipedia.org/wiki/Eugenics_in_the_United_States https://en.wikipedia.org/wiki/Eugenics_in_the_United_States