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Throwdown in class

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Jeff Posted: Mon, Jan 18 2010 10:33 AM

I am currently taking a class entitled "Politics of the Global Economy," and today we had a class discussion of the ethics/morality/solutions to sweatshops in undeveloped countries.

Thus far in my life, I have only ever added menial tidbits to such discussions, but today I jumped in with my strongly developing free market impulses. 

At one point the professor said something to the effect of, "...countries then have incentives to reduce regulations pertaining to environment, labor, etc, etc...."  I raised my hand and asked, "So what you're saying is that drastic reductions in regulation by the government causes business and industry to flock to those locations?"  When he answered in the affirmative, I said, "Alright then.  Let's do it."  This received scoffs from some of my classmates, which is amusing to me since I got to a "relatively conservative" engineering school (I'm a mathematics major). 

We then discussed whether there should be an instituted minimum "living" wage (which would necessarily be substantially over the minimum wage we are familiar with).  Here, I hit them with the "if minimum wage is so good, why don't we just make it $75 per hour for everyone," and tried to explain how the minimum wage increases unemployment, again to a less than warm reception by my classmates. 

I advocated as well that if we wanted to help these "poor exploited peoples," we should just invest in more capital in their countries and bid the price of their labor higher.  This degenerated into an argument over American educational institutions, with no one but me apparently understanding that wages don't increases due to a perceived level of intelligence, but rather due to an increase in producivity (generally brought about due to increased capital).  We ended class with a "to be continued," set for tomorrow. 

I have to say, even though none of them seem to get it, it was quite fun to get into.  I think I may look into economic grad school.

 

 

"I believe that it is better to tell the truth than a lie. I believe it is better to be free than to be a slave. And I believe it is better to know than to be ignorant." ~HLM

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Hard Rain replied on Mon, Jan 18 2010 10:38 AM

Awesome! Don't let them push their mercantilist/Marxian nonsense on you without a fight. YesSuper Angry

"I don't believe in ghosts, sermons, or stories about money" - Rooster Cogburn, True Grit.
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Jeff:
I have to say, even though none of them seem to get it, it was quite fun to get into.  I think I may look into economic grad school.

I just woke up, read this, and had a good laugh.  Your professors won't like you, but I love reading reports like this where people are challenged to think.

"When you're young you worry about people stealing your ideas, when you're old you worry that they won't." - David Friedman
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PVnole89 replied on Mon, Jan 18 2010 10:48 AM

Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 It is such a shame that the future masters of the universe coming out of America's political science programs know so little of basic economics. God forbid they make them take basic macro and micro economics courses.It's not like the major is the least bit difficult in it's own right.

 

 

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z1235 replied on Mon, Jan 18 2010 10:52 AM

Jeff:
I think I may look into economic grad school.

Good work, but stick to math and skip the economics grad school, unless you want to waste more of your time being "taught" by professors like that one. 

Z.

 

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liberty student:

I just woke up, read this, and had a good laugh.  Your professors won't like you, but I love reading reports like this where people are challenged to think.

From my experience, if you can express yourself civilly and intelligibly your professors will love you, even if they disagree with you.  I have known professors to fail students for answering questions in the final with "Keynesian theory", when during the entirety of the semester they've argued for a more free-market approach, when these same professors are Keynesians.  I have yet to get less than an A in a political science or economics class, even though I consistently argue with my professors (and I answer tests as I see fit ,and if they grade me down I will make a case for each individual question), and my professors have offered me even internships.  It's because I have shown ten times the dedication to economics than any other student in my classes, and professors respect that.

I'm sure this is not true of all professors, though.

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Nielsio replied on Mon, Jan 18 2010 11:00 AM

z1235:

Jeff:
I think I may look into economic grad school.

Good work, but stick to math and skip the economics grad school, unless you want to waste more of your time being "taught" by professors like that one. 

Z.

 

Maybe he meant 'I may look into teaching economic grad school'.

Wink

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Sounds like you held down very well. And just in case you haven't realized yet, "fairly conservative" for colleges means, in real terms, "not quite so socialist that they think that absolutely everything should be hyper regulated/ taken over by the government entirely

"Lo! I am weary of my wisdom, like the bee that hath gathered too much honey; I need hands outstretched to take it." -Thus Spake Zarathustra
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Giant_Joe replied on Mon, Jan 18 2010 11:09 AM

Jeff:

When he answered in the affirmative, I said, "Alright then.  Let's do it."  This received scoffs from some of my classmates...

We then discussed whether there should be an instituted minimum "living" wage (which would necessarily be substantially over the minimum wage we are familiar with).  Here, I hit them with the "if minimum wage is so good, why don't we just make it $75 per hour for everyone," and tried to explain how the minimum wage increases unemployment, again to a less than warm reception by my classmates.

Hating the laws of economics is as dumb as hating gravity. Just because you don't like it doesn't mean it will go away.

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Jeff replied on Mon, Jan 18 2010 1:20 PM

The professor was having a good time, to his credit.  He was mainly pitting us against each other.  The only thing I don't like is that he never tells us what his own views are, so we don't generally get to argue directly with him. 

"I believe that it is better to tell the truth than a lie. I believe it is better to be free than to be a slave. And I believe it is better to know than to be ignorant." ~HLM

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Well why do these people work there? Is it not comparative advantage?

'Men do not change, they unmask themselves' - Germaine de Stael

 

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Sieben replied on Mon, Jan 18 2010 1:46 PM

Things to point out:

1) there are two types of sweat shops. The type that is free market, and the type that are government run. Paraphrasing Tom Dilorenzo, if you do a study of the free market sweatshops, their wage rate is typically 2-3 times higher than that of surrounding jobs. So it seems kind of trivial to claim "well, its not exploitation if these people work for sustenance wages on their farms, but it is exploitation if the get paid 2-3 times higher just because its so much less than what we're used to".

Then the government run/aided sweatshops work like this. A company will make a deal with some corrupt government, like Indonesia, and the government will agree to be their enforcement arm. So the corporation lures in a bunch of foreign workers via indentured servant contracts. Then the company breaks the contract by not paying them what they previously had agreed upon, while still insisting that the workers uphold their end of the bargain to pay off the debt they owe to the company. Congratulations, you are now a slave for the next 10 years. We are obviously against this type of thing.

2) If socialist countries are so compassionate, how come they have closed borders to millions of starving people? If France wants to pay everyone a minimum wage because its the right thing to do, why doesn't the french government extend benefits to participants in the french economy who live overseas? They don't, because all socialism can do is stagnate and leach off the productivity of others.

How much innovation comes out of europe, and how much of that innovation do they depend on for their quality of life?

Ironically, the one time we had capitalism was the one time refugees from war and poverty were allowed to immigrate. Yes their lives look bad by today's standards but it was the first time in human history that the common man moved above sustenance levels of living. If the exploitation theory of capitalism were true, why do real wages and purchasing power increase 1850-1910? Why does the working week for Americans drop from 60 hrs/week to 48 if they are being exploited? I wrote about it in this thread.

3) If socialism were so good, why don't people voluntarily form socialist communes? Why do people have to be forced into it via government violence? Why can't democrats have THEIR health care plan and leave the rest of everyone out of it? The answer is because its not. All socialists can do is soak up money from "bad" groups, like the rich, and give it to "good" groups like the poor. But what if everyone were poor? What would a socialist do with that society? They can't do anything because there's no free market inequality to leach off of...

 

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I. Ryan replied on Mon, Jan 18 2010 3:41 PM

Snowflake:

If socialism were so good, why don't people voluntarily form socialist communes?

They do. People form families, businesses, et cetera.

If I wrote it more than a few weeks ago, I probably hate it by now.

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I. Ryan:
They do. People form families, businesses, et cetera.

I just had a thought when reading this statement. Isn't the business world and even perhaps the familial world based on a division of labor? The division of labor is perhaps the worst institution within capitalism according to socialists.  

'Men do not change, they unmask themselves' - Germaine de Stael

 

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Giant_Joe replied on Mon, Jan 18 2010 4:21 PM

Laughing Man:

I. Ryan:
They do. People form families, businesses, et cetera.

I just had a thought when reading this statement. Isn't the business world and even perhaps the familial world based on a division of labor? The division of labor is perhaps the worst institution within capitalism according to socialists.

That's what I think about as well. Exchange and the division of labor is the basis for society. Heck, I'm considering being some kind of "househusband" and doing minimal work from home while teaching kids and keeping the house together. Only because most women I know feel compelled to "get out there and work" :p

I think someone close to me should raise my kids.

 

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fakename replied on Mon, Jan 18 2010 7:54 PM

Snowflake:

Then the government run/aided sweatshops work like this. A company will make a deal with some corrupt government, like Indonesia, and the government will agree to be their enforcement arm. So the corporation lures in a bunch of foreign workers via indentured servant contracts. Then the company breaks the contract by not paying them what they previously had agreed upon, while still insisting that the workers uphold their end of the bargain to pay off the debt they owe to the company. Congratulations, you are now a slave for the next 10 years. We are obviously against this type of thing.

I don't know if you know, but that is basically how england worked during the industrial revolution and probably how america did too. Just giving you more "ammo" in your fight against fascism-socialism.

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Conza88 replied on Tue, Jan 19 2010 1:13 AM

Jeff:
I am currently taking a class entitled "Politics of the Global Economy," and today we had a class discussion of the ethics/morality/solutions to sweatshops in undeveloped countries.

This just had to be posted.

Jeff:
We then discussed whether there should be an instituted minimum "living" wage (which would necessarily be substantially over the minimum wage we are familiar with).  Here, I hit them with the "if minimum wage is so good, why don't we just make it $75 per hour for everyone," and tried to explain how the minimum wage increases unemployment, again to a less than warm reception by my classmates

Got a projector in class? Overhead? Or Seriously, just print this out...

and say "it makes sense to me, what am I missing?" lol. Also maybe clarify that it's not just the dems that are the problem, but also the republicans.

Throw in some political correctness for them to choke on... "The minimum wage hurts minorities the most"... "It is a barrier of entry for these individuals to get a job"... "It is essentially discriminatory"...

Ron Paul is for self-government when compared to the Constitution. He's an anarcho-capitalist. Proof.
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Clayton replied on Tue, Jan 19 2010 1:34 AM

z1235:

Jeff:
I think I may look into economic grad school.

Good work, but stick to math and skip the economics grad school, unless you want to waste more of your time being "taught" by professors like that one. 

Z.

 

I concur. Get a graduate degree in mathematics (so you can put some bread on your table) then become an academic associate of LvMI where you can apply your mathematical skills to decoding and debunking Keynesian bullshit.

Clayton -

http://voluntaryistreader.wordpress.com
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hugolp replied on Tue, Jan 19 2010 3:49 AM

Peter Schiff commented yesterday about the minimum wage law and how it recently affected Samoa. You can probably use the example in class:

 

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Sieben replied on Tue, Jan 19 2010 7:29 AM

Conza88:
This just had to be posted.
That would have been more convincing if it weren't so obviously biased... its along the right lines though.

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TelfordUS replied on Tue, Jan 19 2010 7:40 AM

Jeff:

This received scoffs from some of my classmates, which is amusing to me since I got to a "relatively conservative" engineering school (I'm a mathematics major). 

I feel confident in supporting your economic opinions now that I know you're a mathematics major. Your calculating skills must be useful in terms of understanding economics.

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Sieben replied on Tue, Jan 19 2010 7:43 AM

I'm laughing pretty hard right now. I just checked the net revenue of some of these "exploitative companies" and its pretty low.

After expenses, Nike/GAP only get about 10% of every sale... so much for the fantasy that it only costs 1 dollar to make a t-shirt and they keep the other $49.

Wal-mart only gets 3% off each sale...

Compare this to the liberal college student's beloved Apple Inc which earns 15% off every sale... makes me lol.

(numbers are off wikipedia... net income / revenue. I'm not a stock market guy so maybe this is wrong, but its still pretty funny)

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Conza88 replied on Tue, Jan 19 2010 7:52 AM

Snowflake:
Conza88:
This just had to be posted.
That would have been more convincing if it weren't so obviously biased... its along the right lines though.

Biased against what? Lies & fallacies?

Yeah, I guess it was pretty bias...

Ron Paul is for self-government when compared to the Constitution. He's an anarcho-capitalist. Proof.
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Nielsio replied on Tue, Jan 19 2010 8:05 AM

If someone feels some set of workers should earn more money, then the person complaining should open their own factory and offer higher wages. After all, the assumption is that if wages can be raised that there must be 'excessive' profit floating around.

So either these profits aren't there and through competition labor prices have already adjusted to productivity, OR it's actually not possible to compete for those people's wages; that situation is only possible through ..... laws. But you never hear them complaining about those laws. Or about governments sending other corrupt governments money because they have a bad economy, which gives those rulers incentives to keep the economy bad.

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Sieben replied on Tue, Jan 19 2010 8:10 AM

Conza88:

Biased against what? Lies & fallacies?

Yeah, I guess it was pretty bias...

Well they kept cutting off and putting words in the mouth of that black chick, which made me feel like they were trying to hide something. Also in the 'debate' with the college students, they only showed them getting burned, which they should *only* be getting burned, its just I doubt that that's actually what happened. The news correspondent didn't seem like the sharpest apple in the deck of cards.

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Conza88 replied on Tue, Jan 19 2010 8:38 AM

Snowflake:
Well they kept cutting off and putting words in the mouth of that black chick, which made me feel like they were trying to hide something.

Hide what? Ah, "something" ok. Sorry you "felt" that way.

Snowflake:
Also in the 'debate' with the college students, they only showed them getting burned, which they should *only* be getting burned, its just I doubt that that's actually what happened.

Conjecture.

Snowflake:
The news correspondent didn't seem like the sharpest apple in the deck of cards.

John Stossel?

I dunno, maybe you should join the National Industrial Conference Board.

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Hard Rain replied on Tue, Jan 19 2010 8:58 AM

It's amazing to me to see these harpies screeching against "child labour". They should come on a tour of Africa with me. The typical life-expectancy is in the mid-forties and, in many places, the majority of the able-bodied population is under the age of twenty-one. By demanding an end to "child labour" they're effectively demanding unemployment for the primary segment of the population most able and in need of work.

"I don't believe in ghosts, sermons, or stories about money" - Rooster Cogburn, True Grit.
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Sieben replied on Tue, Jan 19 2010 9:23 AM

Conza88:
Hide what? Ah, "something" ok. Sorry you "felt" that way.
If I knew what was being hidden it wouldn't be hidden would it?

Conza88:
Conjecture
Reasonable conjecture.

Conza88:
I dunno, maybe you should join the National Industrial Conference Board.
Conza you troll Sleep

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Conza88 replied on Tue, Jan 19 2010 9:44 AM

Snowflake:
Conza88:
I dunno, maybe you should join the National Industrial Conference Board.
Conza you troll Sleep

Nope, completely reasonable statement considering what you've said. I don't think you got the link, but that's ok.

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Jeff:
I think I may look into economic grad school.

Have you taken any undergrad econ classes? You probably should.

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Spideynw replied on Tue, Jan 19 2010 10:31 AM

Jeff:
I am currently taking a class entitled "Politics of the Global Economy," and today we had a class discussion of the ethics/morality/solutions to sweatshops in undeveloped countries.

I think you did an excellent job.  You asked questions.  Make them defend their position and just keep questioning their inconsistencies (like you did with the idea of minimum wages).  Now, imagine if instead of being the only person in class that understood these things, you moved to New Hampshire with the free state project and had hundreds and thousands of other people around that understood.

At most, I think only 5% of the adult population would need to stop cooperating to have real change.

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Ansury replied on Tue, Jan 19 2010 11:13 AM

@OP:

Sounds like you have a good handle of the topics, good job IMO.  It's fun shocking people with views they've never heard, and cannot refute because they've been told lies for so long.

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Jeff replied on Tue, Jan 19 2010 7:49 PM

Yes. I'm minoring in economics.

"I believe that it is better to tell the truth than a lie. I believe it is better to be free than to be a slave. And I believe it is better to know than to be ignorant." ~HLM

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Jeff replied on Tue, Jan 19 2010 7:50 PM

That was meant to be for krazy kalu by the way

"I believe that it is better to tell the truth than a lie. I believe it is better to be free than to be a slave. And I believe it is better to know than to be ignorant." ~HLM

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Jeff replied on Tue, Jan 19 2010 8:44 PM

One last thing.

After this discussion came to an end, we moved right along to knowledge and technology [read: IP].  The official class story is that [classical] liberals necessarily favor IP because they believe in property rights.  I just cringed inwardly.

"I believe that it is better to tell the truth than a lie. I believe it is better to be free than to be a slave. And I believe it is better to know than to be ignorant." ~HLM

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Jeff:

Thus far in my life, I have only ever added menial tidbits to such discussions, but today I jumped in with my strongly developing free market impulses. 

Last year, I had an argument with an economics professor on the gold standard.  The entire debate lasted, maybe, ten minutes.  I don't remember why I brought it up (we might have been talking about money, and maybe he was blasting gold).  But, he presented two arguments.  His first was that, "There isn't enough gold." I addressed that, and although he didn't concede, he recoiled and then switched to, "It would take us back to the barter system." The second objection, obviously, is completely ridiculous, but then another student intervenes with, "Wouldn't privatization create a monopoly in money?" (I think I was talking about money, the Federal Reserve and the Austrian credit cycle theory).  I guess the professor saw where it was going and decided to cut my response short and continue with the lecture.

I wrote a paper on the Austrian business cycle theory, and he gave me an A (perfect score).  But, I don't think he agreed with me.

We then discussed whether there should be an instituted minimum "living" wage (which would necessarily be substantially over the minimum wage we are familiar with).  Here, I hit them with the "if minimum wage is so good, why don't we just make it $75 per hour for everyone," and tried to explain how the minimum wage increases unemployment, again to a less than warm reception by my classmates.

You're lucky your professor wasn't arguing with you from a micro perspective.  I had to deal with that during a microeconomics class, and it was suggested by the book that minimum wage's consequence of job shortage could be assuaged by spreading hours.  I made note that even by spreading hours, the hours lost represents wages lost, and so even if you assume that everybody could keep their job by spreading hours, they would still make that much less money.  And, we all know that it never works as evenly as that.

This degenerated into an argument over American educational institutions, with no one but me apparently understanding that wages don't increases due to a perceived level of intelligence, but rather due to an increase in producivity (generally brought about due to increased capital).  We ended class with a "to be continued," set for tomorrow.

To be fair, education is an investment.  To go through education you need to accumulate capital.  When the government pays for an education, it just takes someone else's capital and invests it into a student.  This is a perfect example on how a government malinvests.  It doesn't have the information necessary to choose what students should study what majors, and it creates discoordination in the labor markets... which is why we have a disproportionate amount of unemployed people with bachelors degrees.  A free-market in labor, including education, would better help coordinate the division of labor.  I'm sure many of us would have missed a chance at getting a nice piece of paper and credentials, but these are neither absolutely necessary (especially in a society with less amount of graduates) and if you really want them you can always accumulate capital to pay for your way through an education (or ask for donations, et cetera).

In any case, although this is an example of how government can screw with the market, education (whether intellectual education, or being taught how to use a certain machine) is a form of investment, which necessitates capital accumulation.

I think I may look into economic grad school.

Take math classes.  Lots and lots of math classes.  Or, are you that mathematics major?

 

 

 

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Jeff replied on Wed, Jan 20 2010 12:48 PM

Yes, I am a math major, with a minor in economics.  I graduate in May.

"I believe that it is better to tell the truth than a lie. I believe it is better to be free than to be a slave. And I believe it is better to know than to be ignorant." ~HLM

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