"Listen: I know that real wages have fallen. That's not the point. What is important here is the language and the principles with which the problem must be tackled; if what we are concerned about is poor people being able to do better for themselves, then, with respect to freedom, this is properly understood by considering the negative externalities that government inflicts upon the poor..."Part of a comment I left at Free Taiwan in response to commenter "RollingWave" (whose style bears a striking resemblance to that of "Okami", the once serial commenter here who has since disappeared).
Wednesday, 18 January 2012
Language & Principles
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Sowell says real wages haven't fallen. He says: Contrary to popular opinion, they've increased a lot over the past 40 years. The reason people think they have fallen is because "household wages" have fallen--but now, due to increased standard of living, there are less people per household--so of course household wages have fallen.
ReplyDelete-Derek-
Derek, I wasn't talking about the U.S. in that comment. I was responding to somebody else talking about the DPP's emphasis on widening income inequality in Taiwan. Actually, (again, speaking about Taiwan) it's more likely to be the case that real wages - averaged across industries - have increased somewhat, but at a slower rate and smaller degree than in previous years. Certainly in many cases (e.g. mine), real wages have fallen simply because there has been no increase to match inflation over the past four years.
ReplyDeleteSowell's point about household wages is correct: everytime people use the household as a statistical datum you should be suspicious since household composition changes over time. Sowell is making an empirical point, but it seems likely to me that there will be a decline in real wages in the U.S. over the next few years as a result of the recent increases in the money supply (currently the banks are sitting on excess reserves, but these will eventually have to be loaned out).
Henry Hazlitt makes a good point in his book; we are seemingly obsessed with full employment, but really we should be thinking about production.
ReplyDelete"Production is end, employment merely the means. We cannot continuously have the fullest production without full employment. We can very easily have full employment without full production. Primitive tribes are naked, and wretchedly fed and housed, but they do not suffer from unemployment. Nothing is easier to achieve than full employment, once it is divorced from the gaol of full production and taken as an end in itself. We need to put the chief emphasis where it belongs--on policies that will maximize production."
It seems like real wages would likely decrease if we were to merely focus on employment, and not production.
-Derek-
I think Hazlitt's point, good though it is, must be handled a little more carefully than that: production of goods and services is not an end, but is itself a means for the satisfaction of other values. Those other values are the true "ends", but since people differ in the importance they attach to them, the over-riding "end" (i.e. political-economic condition) must be freedom.
ReplyDeleteYou might be interested in visiting Bevin Chu's blog if you haven't done so already. Chinese anarcho-capitalist blogger (oh yes he definitely considers himself Chinese) who claims he doesn't support any party but just sees the KMT as the lesser of two evils.
ReplyDeleteHe should be in the service then!
ReplyDeleteHey Blob - I just had a quick look; that guy is one of those morons who thinks 9/11 was an inside job. Occam's Razor, for f*ck's sake.
ReplyDelete