4 ms·

The price mechanisms of supply and demand are very well understood since the 1800s, and apply to anything that's bought and sold, including labor. 150 years of

The price mechanisms of supply and demand are very well understood since the 1800s, and apply to anything that's bought and sold, including labor. 150 years of solid science. When facts conflict with beliefs we hold dear and perhaps define our identities, our brains are very skilled at finding ways to keep believing what we want to believe. Especially when the facts define your in-group. Changing such beliefs, makes you one of the people you and your friends hate. The mind will convince itself of pretty much anything to avoid such social suicide.

UltraSane 1y ago
History has already shown that the free market will reduce wages to the point of slavery and destitution. Minimum wage laws are very important to counter the psychopathic greed of many company management. Labor isn't just another good, it is actual human beings whose wages greatly affect their quality of life. Your rant about in-groups is odd.
- cowcity 1y ago
  [dead]
- TheOtherHobbes 1y ago
  The predictable end game of unregulated free markets is the opposite of freedom for 99.99% of the population. There's a curious authoritarian tinge to these "free market" argument. "Free markets are powerful, therefore if I support free markets I am a powerful insider." It usually takes an encounter with a major economic reverse - like being bankrupted by healthcare - for proponents to realise that the free market doesn't care about them either, no matter what they believe.
itsmek 1y ago
This comment is weirdly heavy on lecture and light on substance. I'm going to ignore the second two paragraphs and just stick to the first. The person you're replying to says that labor is different because it has more complex costs to society aka an externality. Your rebuttal, as far as I can tell, is "nuh uh". I can think of a very simple externality - low paid workers are supported by the rest of us via social programs. Goods that require similar support from the rest of us (cigarettes for example) should also be regulated because it breaks the economic magic that makes efficient decisions and allocations. We have known about these basic (literally econ 101) flaws for almost as long as we've studied markets. I am open to being convinced by either you or OP but your argument is failing to do so.
- BurningFrog 1y ago
  My claim is just that wages are prices which arise from the same supply vs demand dynamic as any other price. This important truth is sadly very controversial, which I think is really damaging to society. Of course, I can't prove that from scratch in a HN comment. What I can do is point out that in the science studying this, it is an uncontroversial fact. I didn't substantiate that, which made it less convincing, but here is an Economics textbook saying the same thing: https://pressbooks.oer.hawaii.edu/principlesofmicroeconomics/chapter/4-1-demand-and-supply-at-work-in-labor-markets/ https://pressbooks.oer.hawaii.edu/principlesofmicroeconomics... I know, you can think of an externality. Trust me, Economists can also think of externalities, far more than you or me. In general, they just add interesting nuance to the supply/demand model. They don't completely invalidate it. But I can't easily demonstrate that, so I suspect I have not changed your mind.
  - fredophile 1y ago
    I'm not the poster you replied to but I appreciate your clarification. However, I still don't understand your argument. I don't think anyone has argued that supply and demand don't apply to the labour market. However, it seems that you do agree that there are externalities if workers are paid extremely low wages. Is your argument that the government shouldn't put in laws to mitigate or prevent those externalities? Are you saying that minimum wage laws don't actually address the externalities and should be removed? Are you trying to promote other solutions to solving those externalities? If so, what are they? Is there some other point you're trying to make that I'm completely missing?
    - BurningFrog 1y ago
      Many people argue that supply and demand don't apply to the labour market! Often because they're not even aware of the concept. The more sophisticated claim that it doesn't apply to the labor market. The minimum wage discussions are dominated by this view. The supply/demand analysis is simple: If a worker has skills worth $12/hour on the labor market, and the minimum wage is $15, that worker will be unemployed, making 0$/hour. They'll also not learn new skills, since they can't get a job. Try bringing that up in a minimum wage discussion, and you'll be called many nasty names. Often equalling market wage to human worth, which means you think the poor are lesser humans. A few sophisticates will bring up vague externalities arguments, as if they negate the whole supply/demand concept. From my perspective minimum wage laws is one of the main factors keeping people in poverty, but that concept is impossible to even explain to most people. My main thought about externalities is that they their effect is usually minor, and can be ignored. Many of them are also positive. For the bigger ones, it's a case by case analysis. Is the externality you're thinking of something around the government paying money to the working poor?

UltraSane 1y ago

History has already shown that the free market will reduce wages to the point of slavery and destitution. Minimum wage laws are very important to counter the psychopathic greed of many company management. Labor isn't just another good, it is actual human beings whose wages greatly affect their quality of life. Your rant about in-groups is odd.

cowcity 1y ago
[dead]
TheOtherHobbes 1y ago
The predictable end game of unregulated free markets is the opposite of freedom for 99.99% of the population. There's a curious authoritarian tinge to these "free market" argument. "Free markets are powerful, therefore if I support free markets I am a powerful insider." It usually takes an encounter with a major economic reverse - like being bankrupted by healthcare - for proponents to realise that the free market doesn't care about them either, no matter what they believe.

itsmek 1y ago

This comment is weirdly heavy on lecture and light on substance. I'm going to ignore the second two paragraphs and just stick to the first. The person you're replying to says that labor is different because it has more complex costs to society aka an externality. Your rebuttal, as far as I can tell, is "nuh uh". I can think of a very simple externality - low paid workers are supported by the rest of us via social programs. Goods that require similar support from the rest of us (cigarettes for example) should also be regulated because it breaks the economic magic that makes efficient decisions and allocations. We have known about these basic (literally econ 101) flaws for almost as long as we've studied markets. I am open to being convinced by either you or OP but your argument is failing to do so.

BurningFrog 1y ago
My claim is just that wages are prices which arise from the same supply vs demand dynamic as any other price. This important truth is sadly very controversial, which I think is really damaging to society. Of course, I can't prove that from scratch in a HN comment. What I can do is point out that in the science studying this, it is an uncontroversial fact. I didn't substantiate that, which made it less convincing, but here is an Economics textbook saying the same thing: https://pressbooks.oer.hawaii.edu/principlesofmicroeconomics/chapter/4-1-demand-and-supply-at-work-in-labor-markets/ https://pressbooks.oer.hawaii.edu/principlesofmicroeconomics... I know, you can think of an externality. Trust me, Economists can also think of externalities, far more than you or me. In general, they just add interesting nuance to the supply/demand model. They don't completely invalidate it. But I can't easily demonstrate that, so I suspect I have not changed your mind.
- fredophile 1y ago
  I'm not the poster you replied to but I appreciate your clarification. However, I still don't understand your argument. I don't think anyone has argued that supply and demand don't apply to the labour market. However, it seems that you do agree that there are externalities if workers are paid extremely low wages. Is your argument that the government shouldn't put in laws to mitigate or prevent those externalities? Are you saying that minimum wage laws don't actually address the externalities and should be removed? Are you trying to promote other solutions to solving those externalities? If so, what are they? Is there some other point you're trying to make that I'm completely missing?
  - BurningFrog 1y ago
    Many people argue that supply and demand don't apply to the labour market! Often because they're not even aware of the concept. The more sophisticated claim that it doesn't apply to the labor market. The minimum wage discussions are dominated by this view. The supply/demand analysis is simple: If a worker has skills worth $12/hour on the labor market, and the minimum wage is $15, that worker will be unemployed, making 0$/hour. They'll also not learn new skills, since they can't get a job. Try bringing that up in a minimum wage discussion, and you'll be called many nasty names. Often equalling market wage to human worth, which means you think the poor are lesser humans. A few sophisticates will bring up vague externalities arguments, as if they negate the whole supply/demand concept. From my perspective minimum wage laws is one of the main factors keeping people in poverty, but that concept is impossible to even explain to most people. My main thought about externalities is that they their effect is usually minor, and can be ignored. Many of them are also positive. For the bigger ones, it's a case by case analysis. Is the externality you're thinking of something around the government paying money to the working poor?