Cam, the world you describe is one that is presented in some high school economics texts, I suppose, but not really anywhere beyond that.
Rule number one of actual economics is that there is no truly free market. The prerequirements of a free market includes absolute, instantaneous, knowledge amongst all parties, it requires symmetry between actors and it requires perfectly rational actors. It is a brilliant mental model that lets us explore some interesting behavior. But it isn't a practical model for the real world. It has applicability, yes, but actual predictive modelling power? Not at all and no economist would pretend it does. The closest we get to it in practice is probably the commodities market. We come pretty close to having all the important information shared equally at any given time and we are able to treat 1 ton of corn from Nebraska as being logically equivalent to 1 ton of corn from Iowa and largely smooth out the underlying differentiating factors. The further we get away from that, the more we have to deal with actual real entities and their complications. When you get to the level of employment, you are deep down in the weeds where actors aren't rational, differentiation between consumer and supplier is multifaceted and there is substantial inequality of knowledge, which is itself asymmetric. It is nothing close to a free market and it never will be. The requirements for the simplistic model just cannot be met. Now, that being said, there are a lot of economic models out there that try and deal with the real world implications of these confounding factors. And we can (and do) encourage "freedom" within those systems as they tend to work best when there are fewer barriers. The systems do, however, require constraints to protect the actors (on both sides) and to help the systems toward optimization. We're still trying to figure out the best way to deal with all those things. It isn't obvious because it is a complex issue and an evolving system. Society is including moral valuations (freedom, dignity, fulfillment, etc) as variables in the equations that just don't arise in systems like commodities. And at the end of the day, people aren't commodities. Corn doesn't make choices. It isn't cut and dried and when you are looking at the economics and policy involved in labor, you need to set aside the simplistic notions of a "truly free market". If that hammer is the only tool you have...well, you know the rest. Cheers, Judah On Tue, Dec 11, 2012 at 8:55 AM, Cameron Childress <camer...@gmail.com>wrote: > > On Tue, Dec 11, 2012 at 11:38 AM, Judah McAuley <ju...@wiredotter.com > >wrote: > > > Here's how that plays out, Cam. > > > > That scenario sounds totally plausible and reasonable, and exactly like the > sort of competitive job marketplace that drives a competitive America > without artificially propping up wages. In a truly open job marketplace, > people are always free to switch jobs to one that pays more. > > > > It's the same fundamental strategy that Walmart has used successfully to > > expand. They go into a rural area, take a loss on a number of basic items > > for a year or two and force their smaller competition out of business > > because the smaller guys can't absorb a loss like that. Then, lacking > > competition, they are able to gradually bring prices up and make back > what > > they lost and more and the barrier to entry for potential competitors is > > high, helping Walmart lock in that market. > > > > The real problem you seem to be describing here is that of monopoly, which > I agree is a problem in America today. Walmart is one example. It's also > seen in telecommunications and media companies in some pretty heinous ways. > > > > It's a great corporate strategy, no doubt. But it sucks for workers and > > consumers. > > > It's really just an free and open marketplace. But I know that my point of > view and yours certainly differ around that. > > -Cameron > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Order the Adobe Coldfusion Anthology now! http://www.amazon.com/Adobe-Coldfusion-Anthology/dp/1430272155/?tag=houseoffusion Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:359061 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/groups/cf-community/unsubscribe.cfm
