# From whence the faith in a free market? **URL:** \ **Category:** Great Debates\ **Created:** [March 24, 2005, 6:51am UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016 "2005-03-24T06:51:01Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [March 28, 2005, 7:13pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/61 "2005-03-28T19:13:49Z")
> [@erislover](#): > > Or correctly. No? Certainly. So it is not very difficult at all to see that laws may have been enacted with or without good reason. Just my point. 😉 ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [March 28, 2005, 7:15pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/62 "2005-03-28T19:15:55Z")
> [@blowero](#): > > Another thing I don’t understand is that there are two contradictory arguments seeming to be advanced here. ONE is that a minimum wage is not necessary because the market will automatically correct for substandard wages. And TWO is that a minimum wage damages the market. Well if it doesn’t DO anything, then how can it hurt? Can you explain how you think those are contradictory arguments? They seem perfectly in line to me. ---
**Author:** ![blowero](https://avatars.discourse-cdn.com/v4/letter/b/41988e/32.png) [@blowero](https://boards.straightdope.com/u/blowero)\ **Post date:** [March 28, 2005, 7:23pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/63 "2005-03-28T19:23:42Z")
> [@pervert](#): > > Can you explain how you think those are contradictory arguments? I believe I did. Something that has no effect cannot be harmful. ---
**Author:** ![smiling\_bandit](https://avatars.discourse-cdn.com/v4/letter/s/e9a140/32.png) [@smiling\_bandit](https://boards.straightdope.com/u/smiling_bandit)\ **Post date:** [March 28, 2005, 7:43pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/64 "2005-03-28T19:43:42Z")
Remember, people who believe in the power of the free market don’t say that it is perfect. it is simply that in terms of connecting information fro the people who have it to those who need it (the basis of economic systems), free markets are far better than any other system yet devised. ---
**Author:** ![blowero](https://avatars.discourse-cdn.com/v4/letter/b/41988e/32.png) [@blowero](https://boards.straightdope.com/u/blowero)\ **Post date:** [March 28, 2005, 7:46pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/65 "2005-03-28T19:46:06Z")
> [@smiling bandit](#): > > Remember, people who believe in the power of the free market don’t say that it is perfect. it is simply that in terms of connecting information fro the people who have it to those who need it (the basis of economic systems), free markets are far better than any other system yet devised. What point are you attempting to refute? ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [March 28, 2005, 7:49pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/66 "2005-03-28T19:49:31Z")
> [@blowero](#): > > Another thing I don’t understand is that there are two contradictory arguments seeming to be advanced here. ONE is that a minimum wage is not necessary because the market will automatically correct for substandard wages. And TWO is that a minimum wage damages the market. Well if it doesn’t DO anything, then how can it hurt? Minimum wage is not necessary because the market WOULD correct if there were no MW. However, since we HAVE a MW law, its moot. Minimum wage damages the market. I think that everyone who understands this stuff even marginally would agree. The debate would be how MUCH it damages the market and how MUCH damage is acceptable. The fact that you say “Well if it doesn’t DO anything, then how can it hurt?” is either rhetoric on your part…or shows your ignorance of even your own sides positions. -XT ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [March 28, 2005, 7:56pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/67 "2005-03-28T19:56:13Z")
> [@blowero](#): > > Huh? As I pointed out in the MW thread, you don’t have an absolute right to have a solvent business. A business has expenses, and yes, it might cost the business more to _obey_ the laws than it would to _break_ the laws. That doesn’t mean the law is ipso facto bad. For example, there are laws that require fire exits. Yes, it costs more to put in a fire exit, but that doesn’t mean that law shouldn’t exist, and it doesn’t mean that the free market is going to automatically put in fire exits wherever they’re needed. You guys seem reluctant to accept that there _are_ things that exist that are for the public good, and that it is _not_ a foregone conclusion that they are automatically bad. > > You have it backwards. I’M not saying viability of a business is a justification for MW; YOU are saying that viability of business is a reason NOT to have a minimum wage. I’m simply saying that’s not necessarily true. No, you are missing the point entirely. What we are saying is that you can accomplish the same goals without the MW. Your fire exit analogy isn’t a good one, because there isn’t another way to accomplish safety in an enclosed space except to ensure a mininimum number of exists. Offering the MW to teenagers working at McDonalds is like requiring that a fire door be installed on an open air patio-- neither is needed. Tell me what you think the goals are for requiring a MW, and I can offer other ways to accomplish those same goals. I’m not talking abour rights (although that IS an argument that can be made), but about how best to fight poverty w/o intropducing market distortions. I’m not going to belabor this point, but you clearly did try to justify the MW by saying you didn’t think business should be allowed to exist unless the owners could pay what you consider to be “fair” wages. I’m not saying that the MW is a disaster for the economy or that it destroys businesses. I’m just saying that there is no reason to interfer with the workings of the market unless THERE IS NO OTHER WAY TO ACCOMPLISH YOUR GOAL. I also don’t think anyone is saying that the market will automatically give people the wages they need to survive. It won’t. All we are saying is that if you want to give people welfare, go ahead and give them welfare. Just do it from general tax revenues, and leave the market alone-- that is the best mechanism we have for allocating resources. With the MW, though, you are telling people who don’t have $5.15/hr skills that they are not allowed to work. And in many states it’s significantly higher than $5.15. ---
**Author:** ![blowero](https://avatars.discourse-cdn.com/v4/letter/b/41988e/32.png) [@blowero](https://boards.straightdope.com/u/blowero)\ **Post date:** [March 28, 2005, 8:24pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/68 "2005-03-28T20:24:15Z")
> [@John Mace](#): > > No, you are missing the point entirely. No, YOU are. > [@](#): > > What we are saying is that you can accomplish the same goals without the MW. What do you mean by “we”? My response was to Sam, not you. I asked you to clarify what you’re talking about vis a vis these alternative methods, and you have not done so. All you have offered is a blithe reproach about me “missing the point”. > [@](#): > > Your fire exit analogy isn’t a good one, because there isn’t another way to accomplish safety in an enclosed space except to ensure a mininimum number of exists. Wrong. The analogy was sufficient for demonstrating exactly that which I intended to demonstrate; i.e. that a business’ solvency is not _in and of itself_ a valid reason for a regulation not to exist. You can argue whether a regulation has merit, but you _cannot_ argue that is is ipso facto invalid ONLY because it requires a greater expenditure for the business. I was demonstrating a general principal, not a specific instance. > [@](#): > > Offering the MW to teenagers working at McDonalds is like requiring that a fire door be installed on an open air patio-- neither is needed. That a MW is not needed is your opinion only. _That_ is subject to debate. But the greater expenditure of the business does not make it ipso facto a bad idea. > [@](#): > > I’m not going to belabor this point, but you clearly did try to justify the MW by saying you didn’t think business should be allowed to exist unless the owners could pay what you consider to be “fair” wages. That’s not what you said before, and neither is a fair characterization of what I said. However, I don’t know that I disagree with it. I certainly don’t think businesses need to exist that pay unfair wages, do you? We informally call those “sweatshops”, and we generally prefer not to have them in the U.S. > [@](#): > > I’m not saying that the MW is a disaster for the economy or that it destroys businesses. I’m just saying that there is no reason to interfer with the workings of the market unless THERE IS NO OTHER WAY TO ACCOMPLISH YOUR GOAL. I already told you I’m open to hearing your alternatives to the MW. Certainly, if they’re better, then we should use them. Who ever suggested otherwise? > [@](#): > > I also don’t think anyone is saying that the market will automatically give people the wages they need to survive. Are you _sure_ nobody’s saying that? > [@](#): > > It won’t. All we are saying is that if you want to give people welfare, go ahead and give them welfare. Just do it from general tax revenues, and leave the market alone-- that is the best mechanism we have for allocating resources. I disagree. I think MW is preferable to welfare. Why have jobs that pay substandard wages, and then have the government pay people _not_ to do them? That’s ridiculous. > [@](#): > > With the MW, though, you are telling people who don’t have $5.15/hr skills that they are not allowed to work. That’s circular reasoning. You’re saying that whatever businesses pay is what the labor is worth, and whatever the labor is worth is what the businesses pay. You’re ignoring the reality that there are _more_ workers at the bottom end of the salary ladder than there are jobs. This allows employers to take advantage and pay workers _less_ than a reasonable amount if they could). Having a MW isn’t telling people they can’t work; it’s telling businesses they have to pay a wage with at least a _modicum_ of reasonableness. ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [March 28, 2005, 8:31pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/69 "2005-03-28T20:31:24Z")
> [@blowero](#): > > I believe I did. Something that has no effect cannot be harmful. I’m sorry. I understood this part. What I did not understand (perhaps I missed it) is where you showed that MW laws do not do anything. Just because they are not necessary (if indeed they are not) by some measure of necessary, does not at all mean that they do not do anyting. You said: “_Another thing I don’t understand is that there are two contradictory arguments seeming to be advanced here. ONE is that a minimum wage is not necessary because the market will automatically correct for substandard wages. And TWO is that a minimum wage damages the market. Well if it doesn’t DO anything, then how can it hurt?_” It seems to me that you are saying MW is not necessary. Therfore it does not do anything. Therefore it does not do any dammage. Is that really accurate? ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [March 28, 2005, 8:57pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/70 "2005-03-28T20:57:27Z")
**blowero** : We appear to be just talking past each other. And given that the MW discussion is a hijack of this thread, I’ll open a thread specifically for that topic where we can have a broader discussion with other posters speciifically interested in this topic. ---
**Author:** ![blowero](https://avatars.discourse-cdn.com/v4/letter/b/41988e/32.png) [@blowero](https://boards.straightdope.com/u/blowero)\ **Post date:** [March 28, 2005, 8:58pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/71 "2005-03-28T20:58:48Z")
> [@pervert](#): > > I’m sorry. I understood this part. What I did not understand (perhaps I missed it) is where you showed that MW laws do not do anything. Just because they are not necessary (if indeed they are not) by some measure of necessary, does not at all mean that they do not do anyting. I did not _show_ that MW doesn’t do anything, it was argued _by others_ that MW doesn’t do anything. My position is that it _does_ do something. But the argument has been advanced that _the market_ will automatically correct for substandard wages. If one is arguing that such is the case, then one is necessarily arguing that the MW doesn’t do anything.\* \*Unless one is arguing that the MW is too high, and that wages below $5.15/hr are not substandard. But then that’s not an argument against MW altogether; it’s an argument that it’s the wrong _amount_ for the MW, which is debatable. ---
**Author:** ![blowero](https://avatars.discourse-cdn.com/v4/letter/b/41988e/32.png) [@blowero](https://boards.straightdope.com/u/blowero)\ **Post date:** [March 28, 2005, 9:00pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/72 "2005-03-28T21:00:58Z")
> [@John Mace](#): > > **blowero** : We appear to be just talking past each other. And given that the MW discussion is a hijack of this thread, I’ll open a thread specifically for that topic where we can have a broader discussion with other posters speciifically interested in this topic. You could post in the current MW thread. It was active only a few days ago. ---
**Author:** ![smiling\_bandit](https://avatars.discourse-cdn.com/v4/letter/s/e9a140/32.png) [@smiling\_bandit](https://boards.straightdope.com/u/smiling_bandit)\ **Post date:** [March 28, 2005, 9:18pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/73 "2005-03-28T21:18:18Z")
> [@](#): > > What point are you attempting to refute? None. I’m not trying to refute a specific point. It seems, however, that many opposing free markets have the idea that we think it inevitably leads to perfection. This is obviously not true; we merely think it is the best available choice right now. ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [March 28, 2005, 9:23pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/74 "2005-03-28T21:23:49Z")
I understand that you think MW laws do something. ITs the logic of this one specific bit which seems to escape me. > [@blowero](#): > > But the argument has been advanced that _the market_ will automatically correct for substandard wages. If one is arguing that such is the case, then one is necessarily arguing that the MW doesn’t do anything.\* I’m not sure how these things follow? If a market corrects in general for “substandard wages”\*, that does not mean that all wage earners earn above a specific amount. Conversely if a large number of wage earners are making below some specific amount does not mean that they are earning substandard wages. I simply do not see how either position necessitates the position that MW laws do nothing. ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [March 28, 2005, 9:33pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/75 "2005-03-28T21:33:57Z")
> [@pervert](#): > > Certainly. So it is not very difficult at all to see that laws may have been enacted with or without good reason. Just my point. 😉 My point was wondering how we would have this free market for longer than it took the appeal-to-government folks to pass a law making the market no longer free. It was a pretty small point, I don’t know how it got spread out like this. I think of it this way: If the free market is the best we can do, then we are saying one of two things: 1) that people will be reasonably satisfied with their lot in the free market to the extent that there is no motivation to form a political faction large enough to effect a legislative change, or 2) that we are defining “reasonable satisfaction” as precisely that which the free market can provide to people. These are not equivalent. I don’t believe we can suggest that (1) holds with human beings _as we know them_. Hence we are left with the frustrating (2), meaning, of course, that we must either find a way for people to exist in a manner other than they currently do to get back to (1), or we must somehow prevent people from using political force to effect a change. Follow me there? And if neither (1) nor (2) hold, then we no longer have a free market except for the amount of time it takes to exercize political power by those keen on doing so. Of course, I am assuming that the only reason people would use political power to affect the market is because they are unsatisfied with what the market is doing in absence of such legislation, but you’ll forgive me if I think that’s a fair assumption. ---
**Author:** ![blowero](https://avatars.discourse-cdn.com/v4/letter/b/41988e/32.png) [@blowero](https://boards.straightdope.com/u/blowero)\ **Post date:** [March 28, 2005, 9:42pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/76 "2005-03-28T21:42:21Z")
> [@pervert](#): > > I’m not sure how these things follow? If a market corrects in general for “substandard wages”\*, that does not mean that all wage earners earn above a specific amount. I would think that would be _precisely_ what it means. If workers continue to make substandard wages, then how can one say the market has “corrected” the situation? I thought “corrected” meant “fixed”. I can certainly see how it would be easy to argue your position if the word “corrected” doesn’t refer to an actual correction, but it begs the question of exactly what that word means. ---
**Author:** ![blowero](https://avatars.discourse-cdn.com/v4/letter/b/41988e/32.png) [@blowero](https://boards.straightdope.com/u/blowero)\ **Post date:** [March 28, 2005, 9:45pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/77 "2005-03-28T21:45:38Z")
And let me also point out that if one says a given wage is, by definition, _not_ substandard _because_ it’s the wage that the market will bear, that’s circular reasoning. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [March 28, 2005, 9:47pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/78 "2005-03-28T21:47:55Z")
> [@blowero](#): > > …it was argued by others that MW doesn’t do anything. No it wasn’t. Its your own convoluted logic that brings you to this dubious conclusion. Unless you want to point out who is argueing that MW doesn’t do anything (to the market). You will be hard pressed, as all free market folks I know think MW has a measurable impact on the market. The degree of that impact is debatable, but not whether it exists or not. > [@blowero](#): > > But the argument has been advanced that the market will automatically correct for substandard wages. If one is arguing that such is the case, then one is necessarily arguing that the MW doesn’t do anything.\* The market will indeed automatically correct for ‘substandard wages’ by the mechanism I gave you in a previous post…if the market was truely free to set labor pricing scales. Since we have MW laws on the books however, and since they distort the labor market by artificially setting a minimum to the wage scale, we aren’t dealing with a free market correcting ‘substandard wages’…are we? You’ve already ARTIFICIALLY attempted to make said corrections, and by doing so you’ve most certainly done something to the market. I.e. you’ve had a measurable effect, you’ve distorted pricing for any number of goods manufactured or sold or whatever by those folks who make that minimum wage. In addition, you’ve denied employment to any number of OTHER people who COULD have worked if you didn’t set an artificial ceiling on minimum wage. Reguardless, it certainly doesn’t follow in any case that if one thinks the market will automatically correct for ‘substandard wages’ (were it free to do so) that this means they hold the position that MW ‘doesn’t do anything’ (presumably to the market). It simply makes no sense for you to assert this. > [@pervert](#): > > I simply do not see how either position necessitates the position that MW laws do nothing. I don’t either. Glad I wasn’t the only one. -XT ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [March 28, 2005, 10:12pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/79 "2005-03-28T22:12:08Z")
> [@blowero](#): > > I would think that would be precisely what it means. If workers continue to make substandard wages, then how can one say the market has “corrected” the situation? I thought “corrected” meant “fixed”. I can certainly see how it would be easy to argue your position if the word “corrected” doesn’t refer to an actual correction, but it begs the question of exactly what that word means. What does this have to do with free market types thinking MW doesn’t have any effect (which was your earlier assertion)? What do you base ‘substandard wages’ on exactly? If you and those who think like you are already attempting to artificially ‘fix’ or ‘correct’ the ‘problem’ by enacting MW laws, why are you blaming the market for your failed attempts (i.e. that ‘substandard’ wages continue to exist)? Your logic is truely dizzying. > [@blowero](#): > > And let me also point out that if one says a given wage is, by definition, not substandard because it’s the wage that the market will bear, that’s circular reasoning. Given that the wage is freely accepted by those willing to trade their labor for it, instead of being artificially set, its the same kind of reasoning that the price of goods and services are set by what the market will bear. In other words, your REAL problem is with how the (sort of) free market works at all, not just in how the price of labor is determined based on this assertion. What you seem to be after is to have the government set the price of goods, services and the labor to make them…because they are so good at doing these things from a historical perspective. -XT ---
**Author:** ![blowero](https://avatars.discourse-cdn.com/v4/letter/b/41988e/32.png) [@blowero](https://boards.straightdope.com/u/blowero)\ **Post date:** [March 28, 2005, 10:38pm UTC](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016/80 "2005-03-28T22:38:27Z")
> [@xtisme](#): > > What does this have to do with free market types thinking MW doesn’t have any effect (which was your earlier assertion)? Am I not explaining this right? I pointed out two different assertions that have been made, that are contradictory. IMO, they have nothing to do with each other. But they have both been asserted. > [@](#): > > why are you blaming the market for your failed attempts (i.e. that ‘substandard’ wages continue to exist)? I don’t think you’re following. My position is that substandard wages do _not_ exist, because we _do_ have MW laws. > [@](#): > > Your logic is truely dizzying. You just aren’t following it. > [@](#): > > Given that the wage is freely accepted by those willing to trade their labor for it, I would disagree that it’s “freely accepted”. People _must_ work to survive. If there are more people in a particular sector of the workforce than there are jobs, then they are in effect forced to take whatever job they can get. Not eating isn’t an option. > [@](#): > > instead of being artificially set, its the same kind of reasoning that the price of goods and services are set by what the market will bear. In other words, your REAL problem is with how the (sort of) free market works at all, not just in how the price of labor is determined based on this assertion. What you seem to be after is to have the government set the price of goods, services and the labor to make them…because they are so good at doing these things from a historical perspective. Nonsense. I said no such thing. -XT [/QUOTE] [Previous page](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016.md?page=3) [Next page](https://boards.straightdope.com/t/from-whence-the-faith-in-a-free-market/296016.md?page=5)