Hello libertarians (and other strong supporters of liberty and--therefore--capitalism):
I contacted Jeffrey Tucker regarding the idea referred to below, and he suggested I put a post on this forum.
I stumbled upon a way to improve capitalism systemically and to accomplish everything any libertarian has dared to hope for--and more. The only thing that has to be changed is the approach to the money. This idea leaves the debate over having a metallic currency far, far behind. It actually harks back to the idea of neutral money, the concept that first attracted those who would form the Austrian School, and especially F.A. Hayek. It is impossible to summarize it in a post of this kind and do the idea, well, justice, but an essay of 3,000 words at www.ajustsolution.com presents a reasonably thorough introduction of it.
I must warn readers that the key to the idea is a money supply that is purely fiat money. Materially (as opposed to purely ideologically), the problem with fiat money has been that the supply of it can be manipulated--indeed, is designed to be manipulated--by a group of cloistered individuals making arbitrary decisions (thereby subjecting everyone else in the economy to their arbitrary wills--the very definition of injustice according to John Locke, and one that is consistent with my own account of justice). In my proposed approach to the money, the supply of it would be truly exogenously determined: No person, group, organization, or institution would have the means or the opportunity to alter the size of the money supply. Output would in turn be determined by that exogenous variable.
Again, the website is www.ajustsolution.com.
Stephen Yearwood: Re JackCuyler, "Libertqarianism is the absence of politics: As long as people are living together in communities there has to be a political process. Warren J. Samuels defined "social power" as "the ability to effect chocies." Extending that, the political process can be defined as the process of effecting choices for the community as a whole. It's inherent in the existence of any community. How do Austrians propose to implement their economic theory without using the political process to change the existing set of economic institutions?
Re JackCuyler, "Libertqarianism is the absence of politics:
As long as people are living together in communities there has to be a political process. Warren J. Samuels defined "social power" as "the ability to effect chocies." Extending that, the political process can be defined as the process of effecting choices for the community as a whole. It's inherent in the existence of any community. How do Austrians propose to implement their economic theory without using the political process to change the existing set of economic institutions?
If that what politics mean, then it is true.
But what he's talking about is politics in a differenent sense. It mean the use of agressive force to effect change in civic society. It is the opposite of voluntarism.
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Esuric: JackCuyler:As an example, Austrian economics tells us that an increase in minimum wage law will result in an increase in unemployment. It does not, however, tell us that we ought not increase the minimum wage. Sure it does.
JackCuyler:As an example, Austrian economics tells us that an increase in minimum wage law will result in an increase in unemployment. It does not, however, tell us that we ought not increase the minimum wage.
Sure it does.
Economics tells us the effect of increasing the minimum wage: increasing institutional unemployment. It does not say, "one ought not to seek to increase institutional unemployment". Such a statement is an ethical one, and has nothing to do with economic theory.
Re J.Grayson, "things change" and "How is the allotted income different from a combination of a soaring minimum wage and a gigantic government unemployument 'insurance' scheme? How do you avoid all the problems widely known to be associated wiht both?"
Right. What was once necessary to the enterprise becomes superfluous. But your question was whether the employee could be laid off, and the answer is, absolutely. "No involuntary unemployment"means that everyone who wanted a job could have one, but it doesn't mean there would be barriers to employers managing their workforce as they saw fit. (Government would act as an employer of last resort, putting people to work picking up trash, if nothing else, but those people would be paid the allotted income, too, meaning the money would come from the monetary agency, not from government's revenue.)
The allotted income would in a sense form a minimum wage, but one that employersw would not have to pay. It isn't a government program because government simply wouldn't be involved. They monetary agency, which is totally separate from government, would be the paymaster for those designated by their employers to be paid the allotted income. Again, once set, the amount of that income would not increase.
J. Grayson Lilburne:Economics tells us the effect of increasing the minimum wage: increasing institutional unemployment. It does not say, "one ought not to seek to increase institutional unemployment". Such a statement is an ethical one, and has nothing to do with economic theory.
You're denying human action and logic. If we know that increasing minimum wage will lead to unemployment, and we don't desire unemployment in anyway whatever, then economics will tell us not to increase the minimum wage rate.
"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."
Re Lilburne, about the difference between ethical considerations and economic theory with respect to the miminum wage and unemployment:
A very key point.
Stephen Yearwood:The allotted income would in a sense form a minimum wage, but one that employersw would not have to pay.
And how will they decide this entirely arbitrary rate?
Stephen Yearwood:They monetary agency, which is totally separate from government, would be the paymaster for those designated by their employers to be paid the allotted income.
Does this mean that capitalists and land owners share revenue without paying wages?
Stephen is obviously uninterested in a conversation.
At most, I think only 5% of the adult population would need to stop cooperating to have real change.
Esuric: J. Grayson Lilburne:Economics tells us the effect of increasing the minimum wage: increasing institutional unemployment. It does not say, "one ought not to seek to increase institutional unemployment". Such a statement is an ethical one, and has nothing to do with economic theory. You're denying human action and logic. If we know that increasing minimum wage will lead to unemployment, and we don't desire unemployment in anyway whatever, then economics will tell us not to increase the minimum wage rate.
Esuric, Lilburne is correct. Economics is not a normative science.
Esuric:we don't desire unemployment in anyway whatever
Who's "we"? Economics doesn't deal with any particular desires. Nicholas Biddle desired American unemployment as a means to undermine Andrew Jackson. In desiring unemployment, he can be said, in an ethical statement, to have been evil; but his desire can't be said to have been contrary to economics.
RE Esuric, how would the amount of the allotted income be decided? and could capitalists and landowners share revenue wihtout paying wages?
The amount of the allotted income would be in a sense arbitrary. If the economy were a closed system, with no imports or exports, it could be set at any amount and prices would adjust. It would make most sense to set it at the average income at the time this system was insituted. That is one of the issues that would have to be decided in the political process in instituting this system.
They could do that if everyone in their employ earned the allotted income.
Stephen Yearwood: RE Esuric, how would the amount of the allotted income be decided? and could capitalists and landowners share revenue wihtout paying wages? The amount of the allotted income would be in a sense arbitrary. If the economy were a closed system, with no imports or exports, it could be set at any amount and prices would adjust. It would make most sense to set it at the average income at the time this system was insituted. That is one of the issues that would have to be decided in the political process in instituting this system. They could do that if everyone in their employ earned the allotted income.
I believe your proposal would severely cripple the system of price signals in the market. Malinvestment would be rampant in such a situation.
The price system evolved to deal with uncertainty. Introducing a factor that has not been determined by the free market is introducing planned chaos.
Complex adaptive systems like free markets already adapt, harden, self-defend, and self heal at every level. There is no need for rudimentary quasi-central plans.
J. Grayson Lilburne: Esuric:we don't desire unemployment in anyway whatever Who's "we"? Economics doesn't deal with any particular desires. Nicholas Biddle desired American unemployment as a means to undermine Andrew Jackson. In desiring unemployment, he can be said, in an ethical statement, to have been evil; but his desire can't be said to have been contrary to economics.
Well then he is evil, and that is an ethical judgment. But economics serves a function; saying that it's neutral is obfuscation--it directs policy decisions and human action. I don't agree with this distinction--it seems useless.
Stephen Yearwood:The amount of the allotted income would be in a sense arbitrary. If the economy were a closed system, with no imports or exports, it could be set at any amount and prices would adjust.
What do you mean prices would adjust? If this "authority" finances this portion of society with inflation then prices will continuously rise. Furthermore, if this arbitrary wage rate is too high, then such productions will draw labor away from more warranted economic activities, and if it's too low, then workers will be uninterested in such a policy. Also, is this arbitrary wage rate fixed across the board for all productions?
Well economics is not a normative science but I remember Dr. Salerno making an insightful remark
'No one is just an economist'
'Men do not change, they unmask themselves' - Germaine de Stael
Esuric: J. Grayson Lilburne: Esuric:we don't desire unemployment in anyway whatever Who's "we"? Economics doesn't deal with any particular desires. Nicholas Biddle desired American unemployment as a means to undermine Andrew Jackson. In desiring unemployment, he can be said, in an ethical statement, to have been evil; but his desire can't be said to have been contrary to economics. Well then he is evil, and that is an ethical judgment. But economics serves a function; saying that it's neutral is obfuscation--it directs policy decisions and human action. I don't agree with this distinction--it seems useless.
Every science serves a function. The study of physics can help propel a man to space, but it doesn't tell us that we should.