Let me know if someone has already made this argument.
Premise (A): It is better (economically and ethically) for someone to work at a given wage, than not to work.
For example, if welfare is the equivelent of making, say, $5/h @ 40h/week, it is economically better for a person to work for the same wage. Ethically, it is at the very least equally ethical for a person to work at that wage than to do nothing for that wage, because if it is ok to give them $200/week to live off of for doing nothing, why is it unethical to make them work for $200/week?
Premise (B): Salary recieved from welfare must be less than the salary recievable from minimum wage.
Obviosuly, if you can make more off of welfare than getting a minimum wage job you will try to get welfare. So, if minimum wage is $7/h then welfare must be <$7.
Argument: Ok, so let's say that minimum wage is $7/h then that means welfare needs to be $6.99 or less (B). If people are recieving $6.99 for welfare, then by (A) it must be ok to let them to work for $6.99, so minimum wage must now be reduced to $6.99. Now that minimum wage is reduced to $6.99, by (B) we must make welfare $6.98. But by (A) minimum wage must be reduced to $6.98 and subsequently welfare to $6.97 (B).
The logical conclusion of granting premises (A) and (B) is that welfare and minimum wage will be reduced to 0.
The problem this argument implies is that people in the government use logic. If logic were a policy implementation tool we wouldnt have welfare or minimum wage in the first place. Allowing non-economists to run an economy is like allowing a non surgeon to give a brain surgery. Either way you are screwed.
I disagree duffmann. Brain surgeons are experts in performing brain surgery, but economists are not experts in running the economy. Now, if you're going to claim to know HOW to run the economy, you should at least be an expert in economics, even thouh being an expert won't help you.
Yes, Rothbard levels this criticism against the MW and welfare in For a New Liberty.
-Jon
Freedom of markets is positively correlated with the degree of evolution in any society...
Cool, what chapter?
Haven't read it in a while so I can't recall. It is in the chapter on welfare IIRC.
Brain surgeons being "experts" doesnt mean that they always know how the brain and the body are going to react. The only reason economists dont always know what is going to happen is because of the rapid influx of socialism into a stable system. Much the same way as a brain surgeon would not want to operate on a patient who had some brain stimulating drug, I as an economist do not like to work with an economy full of crap and idiocy.
Jon, I've never read the book but I started to look through it and havn't found it yet (I didn't try for very long).
duffman, if your against socialism why do you believe that an economist could run the economy? Perhaps we are talking past one another.
Just keep looking.
Why must it be okay for the worker to work for $6.99? From my understanding, Politicians place an arbitrary minimum value on labor, and are not nessesarily assigning a living wage. Disproving them is only a matter of proving the subjective theory of value.
My point is that hopefully economists would understand that they dont control prices, the markets do. Politicians think that they can control, regulate and "fix" everything, whereas many economists have a better view of the truth of the matter, at least from my experience.
The welfare person ends up having MORE money because far as I know, welfare checks don't have SS, income tax, disability and all those other deductions made against it before the person receives the check.
Jain
I don't think you even need premise B.
If premise A is true, then having welfare would be wrong, as welfare itself is against premise A.
Premise B requires that welfare be enacted, so if A is true and welfare by A is not enacted, then B would not apply, methinks.
Either way I think you're right.
On the back of pride or the wings of good sense.
Trianglechoke7:Obviosuly, if you can make more off of welfare than getting a minimum wage job you will try to get welfare. So, if minimum wage is $7/h then welfare must be <$7.
The 'real' wage is the difference between what one makes on welfare compared to working.
If you make $200/week sitting around doing nothing while you can make $230 putting in some hard labor then basically you work 40 hours in the hot sun and only really make 30 bucks.
Whose going to do that when they see their neighbors living just as good as themselves while not having to work?
I feel I'm pointing the obvious out here but, is minimum wage not just another government interference in the marketplace that is bad for small buisness and thus limits competition in the market place between companies?
If so isn't MW a cause of lower wages in itself?
"You don't need a weatherman to know which way the wind blows"
Bob Dylan
GilesStratton:If so isn't MW a cause of lower wages in itself?
It is a cause of unemployment, that's for sure. And since unemployment is subsidized, it also lowers prosperity.
Walter Block argued this way in a debate, look in the media section. It's there.
-The Voice of Rothbard