The problem with government interference with the market is that the market is an almost infinitely complex “machine” that relies on pricing to coney information about the relative supply and demand of goods and services. It is often impossible to fully understand the consequences of tinkering with that machine.
Tarrifs are a good example of bad government policy. Used to “protect” certain industries, they usually end up hurting more people than they help since every industry which uses that commodity ends up paying more. When Bush imposed steel tarrifs a few years ago, he liked to talk about all the steel jobs he was saving, but (and I don’t recall the exact figures) economists estimated that many more jobs were lost in industries like automobile manufacturing, etc. than were saved in the steel industry. And when the government has the authority to impose tarrifs willy nilly, guess which industries get the “protection”? The ones with most money to donate. More often than not, it’s the business OWNERS that are getting protected.
Look at what happened in France when that country imposed a 35 hour work week in order to “spread the work around to more people”. Companies didn’t generally hire more people in response, they just tried to get more work out of the 35 hours they had with the present workforce.
If the US government right now imposed price controls on gasoline, you’d see gas lines form almost overnight.
When governments step in to regulate certain aspects of the market, that regulation should be the action of last resort, and (except perhaps some safety related regulations) there should be an expiration date on the program or action so that it doesn’t just end up being SOP when in fact it’s reason for being no longer exists (eg, many agricultural subsidies).
In so far as you have gone,government intervention in industry does not have on the whole any positive effects…in truth most are negative
But you do make one sifnificant point Q/ And when the government has the authority to impose tarrifs willy nilly, guess which industries get the “protection”? The ones with most money to donate. More often than not, it’s the business OWNERS that are getting protected./UNQ and I believe herein lies a growing problem…corporate multi nationals can enforce governments into decisions,a democratic government whom the people elected, are being controlled by corporate capitalism. Where is demoracy of the people…frankly non existent,of course the people won’t know this…so do we not have authoritarianism by the back door.I believe…without being overly dramatic,that this is happening at the moment. I would like to hear others opinions on this!
I have neither the time nor the patience to teach a basic economics lesson. Suffice to say, the market wage for any position is the point where the demand curve (employers - not capital. Capital is stuff like machinery and physical plant) and supply curve (labor) meet.
It’s the PEOPLE who usually demand protectionism when their jobs are being threatened by overseas competition.
pardon…basic economics,my thank the lord we have a John Maynard Keynes from the Bloomsbury Group 1883-1946 the advocate of the use of government monetary and fiscal policy to maintain full employment without inflation.
Perhaps you never heard of him
we certainly needed you MR KEYNES to explain a most complex question
who would have guessed what labour is and P&M
and never would have known labour is an expense direct or indirect and a p&l a/c item and p&m is a balance sheet a/c
you pompous ass …i don’ think you had any idea the reason why i asked that question, it has nothing to do with the broad sweep of economics, its not a player on this simple equation…i thought elementary would have conveyed that. and who but a simpelton would have simplified “It’s the PEOPLE who usually demand protectionism when their jobs are being threatened by overseas competition”…such nonsense.
My first question " I would like to ask you who determines the market forces…Capital or Labour in its most elementary form
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Now tell me what is objectionable in that question?
It is what as known as a “rabbit” question in our legal and finance dept; and so widely used to students of economics, you know, that branch of social science, that deals with the production and distribution and consumption of goods and services, and their management
Sorry, but i think i’m due an apolgy from You and Mr Smith…for both of you do not appear to comprehend a simple question.
finn007, A couple of things: First, you called another poster a “pompous ass”. This sort of direct and personal insult is not allowed in this forum (as a moderator pointed out to you). Second, and I don’t think I am alone here, I find that the way that you are using language in your posts is rather hard to understand. My guess is that English is not your first language. This, in and of itself, is not a problem and, assuming an ESL scenario, your command of English is commendable. However, it will mean that there will be some misunderstandings and that we will all need some patience if ideas are to be concluded with success.
Remarkable i was thinking the very same about this board,but my old FRIEND SMITHINGTON 111, gosh i didnt think he was out yet,explained how Anglo English differs over here. Still the same old rascal he always was, but getting on a bit, oh dear i would so love to meet him,treat him to a GUINNESS.What wonderful memories he brought back.
Oh, sorry, the last thing i want to do, is embarrass anyone, if my questions are too advanced for you.Because it would look like I was being pompous and i jolly well dont want that.No I think i shall GOOGLE for a more advanced sight,and you have my best wishes for advancement in what is an interesting subject.
A quick question: doesn’t very unskilled labor have many opportunities for work today too? I see migrant workers harvesting produce a lot around California. I don’t think they come much less skilled than that. (Forgive me if you are a highly skilled migrant worker who is either down on his/her luck, or picking produce because you like it. Yes, it is a generalization.)
Do migrant workers get paid minimum wage? If they do then it seems the minimum wage allows for all workers–no matter what their skill set–to be potentially employed.
A hefty percentage of farm workers make well over minumum wage. Also matches up with what I always heard growing up in a very ag heavy town (Watsonville, CA). Its not easy work by any stretch of the imagination but its only minimum wage work under poor circumstances and field conditions.
To dovetail into the current discussion a bit plenty of farmers pay a little extra to get people to come pick their crops first. The workers quickly learn who is paying what and the high paying fields go first and fastest. This allows that farmer to be the first one to offer up his crop for sale minimizing the time until he gets paid for his crop.