We often discuss the issues that arise in doing interdisciplinary work in climate science, and Liz Moyer and I have a commentary on that just out in Nature Reports Climate Change. Normally I don’t mention these kinds of pieces on the blog, but in this case the editors commissioned a nice cartoon (from Mark Roberts) illustrating our point. I liked the cartoon a lot, and so it deserves as wide an audience as possible.
A bit of context is probably useful. The three main protagonists are representative of the somewhat different foci of paleo-climatologists, climate modellers and economists. Very broadly speaking, paleo-climate science is built around the analysis of single location time series (often from holes that are drilled). Climate modellers spend a lot of time trying to see what is coming up in all its complexity, while economists tend to eschew complexity and look for insight in highly idealised situations. But in order to increase the credibility of models, they have to do well at simulating past climates and what might happen in the future is certainly informed by what has happened in the past. And in order to better understand the impacts of climate change and various proposed policies, economists will need to embrace the complexity of human-climate interactions while modellers need to better understand what aspects of climate really do make a difference. None of these things will happen if we continue to all look in different directions, and more problematically, fail to support and reward those scientists who want to bridge the divides. Sea monsters notwithstanding.
Re: #193
Dear Mr. Chase,
If one looks into the issue of executive compensation a little more deeply, one finds that the committees which decide CEO compensation are generally packed with other such executives, making the decisions somewhat inc estuous. A 2007 article reads:
“The chief executives of America’s 500 biggest companies got a collective 38% pay raise last year, to $7.5 billion. That’s an average $15.2 million apiece.”
http://www.forbes.com/2007/05/03/highest-paid-ceos-lead-07ceo-cz_sd_0503ceo_land.html
Take Walmart’s CEO — there has been no return on Walmart stock since the year 2000, and the guy makes about $10,000,000.
The excuse can always be made that taking pay away from the executives would not add much to hourly workers’ paychecks.
However, the main point is that there should be some type of realism brought back into the picture. Whoever believes that the executives who make these salaries don’t think well of themselves, perhaps a great deal more than they should (think “Chainsaw Al”), might want to have a look at the behavioral psychology of these CEOs.
The further away from the shop floor they get, the more isolated they get, and the less likely anyone is to disagree with them. Not a good situation for a company’s CEO, but one that occurs all too often. It is an example of the emperor has no clothes and a disconnect from the real world. These conditions lead to bad decision making.
Graef Crystal has been an acknowledged expert on executive pay for more than 20 years — some articles here:
http://www.crystalreport.com/articles.html
Mark wrote in 199:
Actually that is the collective salary, bonuses and all other remuneration taken together (including stock options) for the top 500 US CEOs — being equal to roughly $10 per US citizen per year. And if it meant that others had smaller pay cuts and still others kept their jobs, then it may very easily been worth the price. But it is difficult to say — and I took the figures from 2004, when a fair amount of outsourcing was going on. So at least in part it may very well have had the opposite effect… at least in the United States.
*
Captcha fortune cookie: Primero who
A few years agao I had a conversation with a faculty member of a near-by economics department. Macroeconomics came up. He said “Macroeconomics? I don’t believe in it.”
[Captcha comments “skidding Corps”]
The word “coercion” cannot properly be used in voluntary human transactions. Coercion occurs when a person or agency-of-persons initiates or threatens to initiate force of physical harm or property theft from a citizen.
If I am thirsty and famished, and I ask for a glass of milk and another citizen gives me one, that is persuasion. If I trade a tulip bulb for a gallon of milk, that is enterprise. Neither are coercion.
If I steal milk, if I threaten someone with a gun to get milk, that is coercion. If I get my agents, such as the mayor of my town, to take milk from another citizen with his power of threatening forced compliance and give it to me, that is coercion.
The needs — even the survival needs — of PersonA must never be a legal claim on “B” enforced by the physical force power of the state. A claim that one person’s needs legally and forcibly binds another to provide those needs through coercion, as has been done many times in this thread, is to conclude that we are all slaves to one another.
I suggest anyone greedy to get their needs met through coercion try persuasion and enterprise instead.
Mark writes:
That’s what the buyers of a product are supposed to do — shop around for the lowest price. It’s still a market.
Jess writes:
I have problems with that as well. I know a case where a man was convicted and fined by the SEC because, knowing his company’s stock was about to crash, and knowing his daughter had invested heavily in the company, he called her to let her know. Some regulation of Wall Street may be needed — nothing wrong with the FDIC and FSLIC in my view — but a lot of applications of the insider trading laws are insane.
BPL, #205
But that isn’t allowed.
Well, not for the plebians.
you need a work visa, passport and the agreement to move. you aren’t naturalised so you still have fewer rights and your contract can be ended more easily, reducing your ability to contend for “market rates”.
Then when it comes to *buying* stuff, you’re still not allowed to buy Levi Jeans from Taiwan, ship them over and STILL make a profit selling them because you’re bypassing the UK Levi supplier. Why? Because if YOU shop around, that’s grey market goods and illegal.
So your retort is only for one class of people: the rich and the employers.
THEY get to shop around for the cheapest labour. Because the company doesn’t NEED a visa or anything. Heck, they can get government handouts to move into an area that is sorely in need of happy voters, uh, I mean, people. The people they employ must jump through hoops and have NOTHING to help them.
This is not a free market. You can’t sell your efforts to the best bidder because you must move to them under your own steam (if, indeed, it is even possible at all: what chance would a USian have of taking a job in Cuba? Or freely moving back again if a better job comes up?).
That is NOT a free market.
> he called her to let her know
I know people who’ve been left holding their worthless stock because someone did just that — called up a daughter or friend to say “sell it all fast, it’s going to tank tomorrow.”
Family loyalty vs. fiduciary responsibility — is it insane to hold a corporate insider to the standard?
The father and daughter did exactly what the law is intended to prevent, benefiting from information not available to the public. It’s a textbook case of insider trading, and there’s nothing “insane” about its application at all. If you don’t want to deal with the laws regulating publicly traded stock – don’t take your company public.
I’ve tried to keep this post short and to the point, given that the captcha is …
“billion words”
Re #159 where Hank Roberts Says:
Hank,
You must be joking! You don’t really believe that the only cost of global warming is that the Aussies will have to pay more for their drinking water? Surely you know that they only drink beer!
But seriously you are making the same mistake as the deniers. They think that because the costs of global warming are not high now, they will remain that way. However, the current costs are only a taster of what will happen five years down the line, when global warming kicks in as a result of the Arctic sea ice disappearing.
Already, there are droughts in the US, and that will only get worse. We are being told that it is only the poor, like the Bangladeshi and Pacific islanders, who will suffer. But the developed countries will be hit too. The UK is unable to feed itself, and the USA is going to run short of water now that the deserts are spreading north, the glaciers are all melting and the ground water has been pumped dry.
[edit]
Cheers, Alastair.
David B. Benson wrote in 203:
I am Austrian school myself. Basically Ludwig von Mises — Human Action, Theory of Money and Credit, etc.. In his approach there is no distinction between microeconomics and macroeconomics. And in truth, I already presented a small part of his theory of the business cycle which differs considerably from the Keynesian approach.
However, Ludwig von Mises isn’t that popular nowadays largely because his approach was decidedly non-mathematical. He believed it was a mistake for economics to attempt to imitate the physical sciences. However, Thomas Sowell (who unfortunately has become more of an ideologue in recent years, but who is also strongly influenced by both Frederick A. Heyek and consequently Ludwig von Mises) has pointed out that at least some economic insights can’t actually be gained except by appeal to mathematics.
In truth, however, if there weren’t anything at stake in the world, I would prefer to be studying the role of retroelements in leading from the RNA world to the world we know today. Economics? I certainly see problems. Tariffs and other trade barriers, price controls and other forms of regulation — but I personally think the high stakes lie with climatology — and whether we heed its warnings. As BPL points out, there are probably hundreds of millions of lives at stake. But I personally suspect that is a conservative estimate.
Mark writes:
A pure free market (an infinite number of infinitely small consumers and producers) doesn’t exist anywhere. I’ll readily stipulate that the labor market is not perfectly free. But the supply curve is still up with price and the demand curve is still down with price. For your minimum wage scheme to work, the supply and demand curves would have to be the same curve. That can only happen in a command economy, and the US is no closer to that than it is to a pure free market.
dhogaza,
Sorry, I don’t think it should be illegal to defend your family.
Barton Paul Levenson, 191, wrote :
“Has it escaped your attention that the worst pollution on record happened in the USSR and eastern Europe, neither of which could be remotely called capitalist? The Black Sea is a sewer, vast swaths of forest are gone, and half a century after the Chelyabinsk waste dump exploded, it’s still radioactive.
Central planners can be just as bad for the environment as capitalists.”
No, indeed, it had not escaped my attention. My earlier comments were in reply to someone’s enthusiasm for pure free market capitalism, which, to my mind would be disastrous. But the USSR, was, as you rightly say, equally disastrous for the environment. Which was why I suggested the Swedish model of soc-ial-ism, as described in the link I provided; what the author calls ‘economic humanism’.
http://naturyl.humanists.net/synthesis/freedom.html
“In a post-Marxist world looking for deliverance, is there a better way? As nations such as Sweden prove, there is. I call their approach “economic humanism.” It is not a precise term or a well-defined system, but instead a broad vision of an economy that serves the population instead of a population which serves the economy. It is essentially a pragmatic approach – where markets work, markets are used, and where social approaches work, soc-ial-ism is used. The overall motto is “opportunity for all, poverty for none.” It is a system in which those well-suited to employment can pursue and benefit from it, while those not suited to economic work are not enslaved by it. It is the reconciliation of the wealth-producing power of capitalism with the humanity of soc-ial-ism.”
However, I don’t suggest that if all nations suddenly followed the Swedish example, all environmental, humanitarian and AGW concerns would be resolved, just that, IMHO, it’d be a step in the right direction.
Someone on another thread suggested that climate science be taught to school children at an early age. I don’t know what is taught these days, but I think that the essential basics of climate change and ecology could be taught by study of a humble aquarium.
If you want clear water and healthy fish, you have to get the balance just right. If there’s too many fish, not enough O2, the fish will die. Too much uneaten food and detritus, the fish will die. Wrong temperature or pH, the fish will die. The fish may die anyway, from some disease. When setting up a new aquarium, the condition of the water and gravel fluctuates, as the bacterial population balances. The water may become milky, then green, then maybe clear. You add plants and molluscs, more fluctuations. Finally, after, say, a month, fish can be introduced. I’d suggest that this is, conceptually, as a didactic analogy, a rough and over-simple approximation to the paleontological fluctuations of this planet, up to present.
Given how complicated a basic aquarium can be, it’s quite surprising that it is even possible to design and adjust such simple system, so that when set up right, it maintains equilibrium and fish can survive and breed for many years.
In the real world, it’s more difficult by orders of magnitude – see reference I made to Leakey and Lewin “The Sixth Extinction”, an extract is here :
http://www.dhushara.com/book/diversit/restor/echaos.htm
If a human, with adequate technical and biological knowledge, can design an aquarium system so that it maintains health and balance, then why not design one’s own life, life-style, living-system, culture, likewise ? Seems to me, that is the essential insight of Mollison’s Permaculture.
http://www.permaculture.org.uk/mm.asp?mmfile=whatispermaculture
Gavin and E. Moyer’s call for a new type of scientist to bridge disciplines can easily to extended, ideally, to embrace many other professions, designers, town planners, politicians, manufacturers, MBAs, etc, etc.
The main obstacle, IMHO, is that there is no fundamental agreement about what the ‘world’ is, and what we want it to become. That is really a philosophical, even metaphysical, problem, and as we argue and fight over how to arrange the deck chairs, our ship is rather rapidly sinking…
IMO, we face a most formidable problem : How to re-design civilization for the long term ?
It’s probably impossible to achieve perfect answers, because of so many variables and unknowns, but IMO, a very good start would be to stop wrecking the ecology we already have.
There’s some interesting suggestions re environmental sustainability here :
http://www.jeffvail.net/2008/07/re-post-hamlet-economy.html
Anyone feel the need for a little comic relief ?
http://uk.youtube.com/watch?v=8ZyW2-vSqV8
re: 204
“The needs — even the survival needs — of PersonA must never be a legal claim on “B” enforced by the physical force power of the state. A claim that one person’s needs legally and forcibly binds another to provide those needs through coercion, as has been done many times in this thread, is to conclude that we are all slaves to one another.”
As stated, I think this is nuts. It would eliminate basically any legal restraint on behavior, no matter how egregiously dangerous it might be. (I want, for example, to have coercive power applied to my corporate neighbor who is dumping the uranium tailings, or to the speeder who insists on drag-racing past the school playground.)
To be interdependent, as we inherently are, is *not* to be “slaves to each other.”
re #179:
“As acknowledged in #151 above, won’t Canada, Russia and other northern nations, who have vast lands of fertile soil (but it is too cold there to grow important crops) suddenly become enormously important?”
No, because the premises here are wrong. In Canada (and I believe the situation in other Norther lands is similar) the limitation is not cold, but the lack of arable soil. Where there is good soil, the land has been in production since the early twentieth century. But a great deal of the good stuff was removed be glaciation and has not had near enough time to be regenerated yet. They call the resulting terrain the “Canadian shield,” a name suggestive of the predominant quality of the surface!
All that agriculture in Northern Ontario, or Saskatchewan, or BC will gain from warming is a longer growing season, which will let them grow more diverse types of crops on the few small pockets of usable soil they have. But this small economic benefit will be much outweighed by the economic hit taken in forestry. To take one leading example, the provincial government of BC is planning to spend in excess of $300 million (Canadian–currently a touch above parity with the American $) in response to pine bark beetle infestations which have already been caused by warming. See:
http://www.for.gov.bc.ca/hfp/mountain_pine_beetle/
(Captcha oracle: Siberian groups)
Barton Paul Levenson wrote: “Central planners can be just as bad for the environment as capitalists.”
The categories of “central planners” and “capitalists” are not mutually exclusive. Much of the US economy is, in fact, “centrally planned.” The “central planners” are the CEOs of corporations rather than government officials.
Kevin McKinney wrote: “To be interdependent, as we inherently are, is *not* to be ‘slaves to each other.'”
Indeed, failure to appreciate our interdependence is the root of the climate crisis, and the broader ecological crisis that threatens the survival of our species.
CL, I’m one of the the remaining Bush fans. But that was funny! And well done.
Kevin, but your examples are off John’s marks. Your examples prohibit Person A from laying claim to (taking) some of Person B’s stuff or rights, the near opposite of what John said.
Rod B wrote :
“CL, I’m one of the the remaining Bush fans.”
Really ? Is that so ? Maybe you’ll enjoy this one then.
http://polidics.com/current-administration/its-not-the-first-time-a-bush-has-tried-to-overthrow-the-government.html
This sort of perspective is why I used the qualifier “as stated”–I suspected that he may not have intended to cover such cases as I brought up.
However, logically there *is* congruency between his description and my examples: I (person A) am, by his stricture, prevented from taking legal (by definition, coercive) action against person B (the polluter or drag-racer), even though they may be threatening my survival. Conversely, it seems a bit of a stretch to me to use the concept of “coercion” to prevent the actions of B–they aren’t trying to coerce me; in fact the whole problem is that they don’t care about me (or my continued existence!) one way or the other.
BTW, I’m not trying to do “gotchas” with this; I’m trying to clarify why the statement made didn’t make sense to me (and therefore didn’t convince me.) At this point, I do in fact believe that there are cases where properly “one person’s needs legally and forcibly bind[s] another to provide those needs”–or at the very least, not to impair the means of provision of those needs.
CL, Nope. That one didn’t pass…
Alastair, I meant “might cost you the earth” — we agree on the risk.
———-
Barton, if you allow “defending your family” to include tipping off investors before a stock market announcement — “insider trading” — family fiefdoms will continue to grow using insider information.
I’m sure you know the principle involved:
http://web.uvic.ca/philosophy/department_files/sophia/issues/sophia2002/crawford.htm
Yes, it’s very hard at times to do the right thing.
Same thing applies for example to a “well regulated militia” — one that defends the community.
Compare that to nations where militias are organized by family members/tribe members, to defend them at the expense of others in the same town or community.
Lack of such regulation sets a size limit on the community that can be sustained cooperatively.
This is what regulation means, and why it exists.
“Some rob you with a six-gun,
some with a fountain pen.”
THE DELPHI METHOD (for interdisciplinary studies)
Wow, here’s something I just read about in the ENVIRONMENTAL CRIME AND JUSTICE text I’m using for a summer course, in the context of a call for a more interdiscipinary approach to environmental crime/harm (where criminologists are largely unaware of environmental indicators and their meanings, and environmental researchers are unfamiliar with criminal behavior and legal studies).
It is the DELPHI TECHNIQUE or METHOD. See: http://en.wikipedia.org/wiki/Delphi_method
I haven’t had time to read and digest this, but it sounds promising.
Rod B :
“CL, Nope. That one didn’t pass…”
Huh ? Pass what ? Your denial threshold ?
http://www.democracyrising.us/content/view/57/81/
CL’s first video link was a kid lip-synching.
Will Ferrell’s voice (and TV laugh track).
BPL #212
Nope. The employer has much more mobility. Therefore there is no equality of power and therefore no free market.
Unless you’re the employer.
Having an infinite number of players IS NOT (repeat NOT!!) the definition of a free market.
Informed
Free
Choice
is the background of a free market.
So even if there is only one manufacturer of a pant-de-farter as long as people are informed about the item, it’s efficacy at removing powerful odours and have no force placed on them to either buy (legislation requiring, for the common good, de-farting apparatus) or not buy (social pressure saying “poo! farty pants!” when you buy one) the item, it exists in a free market.
NOT that there are an infinite number of people making pant-de-farters.
[edit]
Should’ve edited my last one.
PS the supply/demand curve is irrelevant to a free market. It is a consequence of one with informed players.
Rather like species destruction is a consequence of radical climate change but not part of climate change.
I.e. if nobody wants to make the insoles for your undies, the supplier can sell at any point that is profitable. If the supply/demand curve says he would be MORE profitable at another price point, there’s no need to sell AT that point. They could even sell at the marginal cost curve, even though there is no competition. Maybe it’s someone with integrity who KNOWS that as long as you’re fed and your family is too, making more money isn’t needed and is even damaging to society.
They would still be profitable and still in business.
If others came into the market, they could sell at that level, but again, there’s no need. They could drive each other TO the marginal cost curve, but then again, they could drive each other UNDER the marginal cost curve. Or one could sell upmarket at a much higher cost and others at the cheap end.
Rather like the evolution of bimorphic species: they move into different markets because the generalist is competing with BOTH ends of the spectrum inefficiently and loses out while the two ends of the bimorphism are more efficient within their sphere and don’t compete with each other.
Giraffes/gazelles. Gorillas/Chimps.
They didn’t jump to the marginal point and become indistinguishable from each other.
CL, that, too.
Mark #229:
“Having an infinite number of players IS NOT (repeat NOT!!)
the definition of a free market.”
Actually the assumption of a large number of agents (firms or individuals), each too small to affect the market price, is a fundamental assumption of “perfect competition”.
It is one of many assumptions in this idealised form of microeconomic analysis that butt heads rather painfully with reality.
Your example:
“So even if there is only one manufacturer
of a pant-de-farter as long as people are
informed about the item… ..it exists in
a free market.”
It would not be a “perfect competition” free market if, for example, there were barriers to entry preventing competition – patents, scale economies, government-granted monopoly, advertising convincing buyers that the product is better than others, etc.
Ironically, much business activity is devoted to subverting perfect competition.
There is a story I heard about a marketing student saying that in economics we learn about barriers to entry and in marketing we learn how to erect them. Only too true.
The lack of correspondence between idealised microeconomic models and the real world seems to me to be significant for the field of climate science.
In the above example, it would not be perfect competition if the manufacturer generated environmental pollution, thereby externalising its costs.
The Stern report put it best: “Climate change is the greatest market failure the world has ever seen, and it interacts with other market imperfections.”
My guess is that at least part of the urge to deny the science comes from a deep attachment to a belief that the world really does function along the lines of textbook perfect competition.
If perfect competition is optimal (debatable, but…), and what we have is not perfect competion, then it can be argued that measures to make the world conform to the ideal are justified: consumer protection laws, antitrust laws, environmental laws, labour laws, regulation of financial markets, and so on.
So, I guess, agreeing that AGW is a reality must be very challenging for anyone either (a) psychologically wedded to the idea that perfect competition is an adequate description of the world or (b) expected to suffer financially from measures to remedy market failure.
There are lots of problems with “democracy” and “free markets.” For one thing, there should be widespread, open, and accurate information on which people can base their economic and political decisions.
But, aside from people being zonked into the tube and not paying attention to what good info there is out there (or being closed minded to the truth), a lot of info and knowledge is slanted or downright false. It is the powerful and wealthy who produce and control a lot of the info and knowledge — through advertising, political contributions, downright fradulant science (with all sort of minor to major fradulant techniques), political muzzling of honest scientists or editing their science, and all sorts of info suppression & falsification throughout nearly all our institutions — govt, businesses, the media, church, educational institutions. I myself have been suppressed (at least they tried) by people above me being fearful of what various wealthy and powerful entities might think if the truth be outted. We end up censoring ourselves even, cognizant that powerful and wealthy eyes might be upon us — the “chilling effect.”
Michel Foucault said “power is knowledge” (a shocking reversal of that adage we all know — that “knowledge is power”), but I don’t think he knew the extent to which that has been found in recent times to be so very true.
Gary #232
You’re right on the barrier to enter stoppimg it being a free market. However, I’d covered that there was no barrier, just no people interested in competing. Rather like Scott Adam’s House Warmer: a knitted cover for your house. How many people would enter THAT market? If one did, nobody else.
You’re wrong on the number of entities IN the market being required. It is considered one way in which the free and accurate information should make an efficient market: if someone made the pant-de-farter and people could work out that they were making a HUGE profit, other people would think “I’ll have some of that” unless they are busy making something else (after all, they’d make less profit than the first mover otherwise they’d each sell half and he wants to sell more than that).
Ta.
(PS the oracle says something NEARLY appropriate: Tawney But. Missed the ‘t’ at the end!)
Mark writes:
Will you please crack a book? There doesn’t have to be equality of power for supply and demand curves to exist. It’s not a yes/no question as to whether a free market exists. The degree of freedom in a market varies. It’s still a market until the supply and demand curves coincide.
Mark writes:
I’m sitting here stunned.
Your statement is like saying, in physics, “velocity is irrelevant to momentum.” Or in biology, “natural selection is irrelevant to evolution.”
Will you please, PLEASE, read a book on microeconomics? You don’t have to buy one. Your local library should have at least one.
There is no need to buy or borrow a book. Wikipedia describes a Free Market thus:
A free market is a market in which prices of goods and services are arranged completely by the mutual consent of sellers and buyers. By definition, in a free market environment buyers and sellers do not coerce or mislead each other nor are they coerced by a third party.[1] In the aggregate, the effect of these decisions en masse is described by the law of supply and demand. http://en.wikipedia.org/wiki/Free_market
But the problem is that without government control the suppliers will form themselves into or become a monoploly and force the selling price up. Thus a free market is an idealisation and not a practical system.
BPL #236
Supply/demand curve has as much to do with a free market as spaghetti bolognese has to do with pesto sauce.
A controlled economy has a supply/demand curve. It isn’t a free market, though. Because the supplier can halt movement along the supply/demand curve by fixing prices.
Please, if you’re so smart and I’m so dumb, show me how a supply/demand curve creates a free market. I’ll wait.
Movement ALONG the supply/demand curve requires those elements that define and make a free market:
Informed
Free
Choice
Without them, the consumer cannot move the supply/demand to attain greatest utility (cheapest price).
Now when you go shopping for your plebescite worker you have a free market. You can go to India, Pakistan, Outer Mongolia. You can change YOUR price.
However, absent 100% availability of social care for unemployment, demand for jobs is 100%. Everyone needs to eat and we’re not allowed to steal bread. So no choice.
So the worker has no ability for a free choice.
Worse, you have to give lots of info to your employer before they employ you. They not only have a free choice but an informed one.
When was the last time someone looking for a job got to see the last five years statements and forward planning statements for their employer? Not even an informed choice.
You sit there flabbergasted because your entire edifice is based on what you’ve been taught by your economics classes.
And to close: if nobody knows how much money I’m making (I’m not a PLC) in my pnt-de-farter business, how does anyone know if it would be profitable to enter the market?
Informed populace.
What if I’d had a patent on it?
Free Choice.
What if I had a law passed saying you had to buy one?
Choice.
But there’s STILL a supply/demand curve. The existence of one does not MAKE A FREE MARKET.
I didn’t say the existence of supply and demand curves MADE A FREE MARKET. There is a spectrum of types of market from completely totalitarian control to perfect free market. You’re defining 99% of that spectrum as “not a free market” and insisting that, therefore, supply and demand curves don’t matter. You’re just wrong. Deal with it.
Let me get a little more specific, Mark — you are maintaining that unless a market is a perfect free market, a fiat minimum price above the equilibrium point will not cause a shortage of the good or service supplied. That is economically illiterate.
You keep maintaining there’s nothing free about the market for unskilled labor. PROVE IT. Find the data and draw the supply and demand curves. If they’re not the same curve, you’re wrong, and a minimum wage above the equilibrium point will cause unemployment. Stop babbling about how economics doesn’t matter because it’s not a free market and PROVE YOUR POINT WITH DATA.
BPL: “I didn’t say the existence of supply and demand curves MADE A FREE MARKET.”
cf: “Mark — you are maintaining that unless a market is a perfect free market”
Back atcha!
It is easy to prove there is no free market for killed labour.
EDS outsourced 60% of their programming team (skilled labour) to a centre in India (Hydrabad, IIRC). Can I move there and compete for these jobs?
No.
No. Free. Market.
Now, if we go back to your effigy in hay,
“For your minimum wage scheme to work, the supply and demand curves would have to be the same curve. That can only happen in a command economy, and the US is no closer to that than it is to a pure free market.”
Why would the curves have to be the same curve? The demand is 100%. Flat. If there are more jobs available, we don’t pinch out fully grown workers to fill the places and when jobs disappear we don’t euthanase anyone. But there ARE job creation schemes. There ARE reductions in force. These change the supply.
So you have stated that the curves must be the same (with no reason why) and then knocked it down.
Don’t set fire to the chaff!
If you want more proof: look at the job requirements for front-line workers. Now look at the job requirements for management.
One is a couple of pages long, the other a paragraph or so.
So the one with the more demanding job gets paid more, yes?
Oddly enough, no.
This is not a free market result.
And finally, you can get a supply/demand curve in ANY ECONOMY. That you have a supply and demand curve doesn’t mean you have a free market. A command economy can decide to change the demand by increasing the price (cf petrol taxes) or by giving tax breaks (investment perks or removal of stamp duty).
Still a supply and a demand.
A supply and demand curve in a free market means that you should have the goods move to the marginal cost. That’s all.
Now how do you get that movement? Guess.
Informed free choice.
While I’m here:
BPL: “I’ll readily stipulate that the labor market is not perfectly free. But the supply curve is still up with price and the demand curve is still down with price.”
If you aren’t saying that having a supply and demand curve makes a market a free market, why did you say that?
You’ve already said that the labour market is not perfectly free, but you haven’t said why it is a free market apart from that point (in #212). Now given that in #239 you aren’t saying that the supply/demand changing on price (the supply/demand curve), in what way is the labour market free?
You’ve agreed it’s not perfectly free (though we’ll have to ignore that anyway because you and Gary have used the requirement of infinite players because if that’s needed you must agree that a free market never exists which makes your whole point moot), but you haven’t said in what way it is a free market.
Let us hear.
> markets and labor
Here’s a pointer to an excellent discussion already in progress:
http://www.theartofthepossible.net/2008/07/24/labor-struggle-in-a-free-market/
(hat tip to makinglight for mentioning it)
Maybe this (low quality) discussion of aspects of economics would fit better elsewhere than RealClimate?
[Captcha reminds you to “retreat younger”]
Hank, fair enough. Doesn’t say that the labour/employer system is a free market.
David, I suspect that there are two problems here:
1) this wasn’t a very “tight” thread anyway. For “why”, take a look at the title
2) BPL and I speak different languages. Both using english words but not able to understand what the other one means
3) Which one of BPL and I is the youngest?
4) Never Retreat. Never Surrender.
:-)
Re John Donohue @181: “When the last cooling cycle resumed 800 years ago, the Greenland wheat farmers simply walked away from their farms.”
Try reading a bit of history: there never were any Greenland wheat farmers. Not 800 years ago, not now, not ever. The Greenland Norse were dairymen, and they didn’t simply walk away from their farms, they starved to death when they could no longer grow enough hay to see their herds through the increasingly longer winters.
“won’t Canada, Russia and other northern nations, who have vast lands of fertile soil (but it is too cold there to grow important crops) ”
And a bit of geography: acidic taiga and tundra soils will need much remediation before they will ever be able to grow cereal crops, and there is precious little soil to grow crops of any kind in the Canadian shield.
Suppose one’s house catches fire, but the firefighters arrive before everything’s toast. Whacking great amounts of water may save the structure, but considerable water damage to the contents (economic loss) will occur. Few people will say “Let it burn; I can’t afford the water damage.”(Insurance pays either way).
I see the disappearance of glaciers –
Oerlemans, J. Extracting a Climate Signal from 169 Glacier Records
Science 29 April 2005: Vol. 308. no. 5722, pp. 675 – 677
“For the period from 1900 to 1980, 142 of the 144 glaciers retreated.”
or http://www.geo.unizh.ch/wgms/mbb/mbb9/sum06.html
– the collapse of “stable”(and stabilizing) ice shelves (Larsen, Wilkins) –
De Angelis , H and Skvarca, P Glacier Surge After Ice Shelf Collapse Science 7 March 2003: Vol. 299. no. 5612, pp. 1560 – 1562
“The evidence presented here unambiguously shows that five of the six major tributaries that formerly nourished the disintegrated portions of LIS have recently experienced important dynamic perturbations. This includes not only the detected acceleration and retreat (16) but also an active surging.”
– the rapid increase in Greenland ice mass loss –
Rignot, E and Kanagaratnam, P Changes in the Velocity Structure of the Greenland Ice Sheet Science 17 February 2006:Vol. 311. no. 5763, pp. 986 – 990 “Accelerated ice discharge in the west and particularly in the east doubled the ice sheet mass deficit in the last decade from 90 to 220 cubic kilometers per year.”
– and, the rapid decline in Arctic summer ice –
http://www.ees.hokudai.ac.jp/coe21/dc2008/DC/report/Maslowski.pdf “Between 1997-2004:- annual mean sea ice concentration has decreased by ~17% – mean ice thickness has decreased by ~0.9 m or ~36% – ice volume decreased by 40%, which is >2x the rate of ice area decrease. If this trend persists the Arctic Ocean will become ice ice-free by ~2013!” (thank you, Hank Roberts).
I wonder, do we really want or need to engage in a dialog with the bean counters in Economistan about whether we can afford some water damage (economic loss from eliminating carbon emissions) while the only uninsured house we have burns up? We’ve been smelling smoke since Dr. James Hansen pointed it out in 1988, some of us even longer.
(ReCaptcha: Adams bullets)
Someone was smelling smoke in 1935
“america was once a paradise of timberland and stream but it is dying because of the greed and money lust of a thousand little kings who slashed the timber all to hell and would not be controlled and changed the climate and stole the rainfall from posterity and it wont be long now, it wont be long… ”
http://www.donmarquis.com/readingroom/archybooks/ants.html
How would you feel if the world was falling apart around you
Pieces of the sky were falling in your neighbor’s yard
But not on you.
Wouldn’t you feel just a little bit funny
Think maybe there’s something you oughta do
— Danny Flowers, “Before Believing”
CL (248), one can find forest/timberland statistics going both ways, but the seemingly most credible show forests declining slightly from the 40s to the 80s-90s and increasing slightly from the 70s-80s to the present (with projections to continue increasing slightly). Timberland bulk mass has increased a lot the past 50 years or so. Is this what you understand? I don’t know what it was 1800s to 1930s (do you?), which might be more apropos to your post, though an intuitive guess would be some decrease from all of the conversion to agriculture.