Austrian Economics and the lazy welfare queen

Consider a marginal government subsidy given either through welfare or negative income tax. Either is valid as both are equally destructive. In the example, the citizen on subsidy receives the market equivalent of eleven dollars per hour. The citizen's market value is irrelevant, but a comparison of various hypothetical value to society can illustrate why the moral agent is lazy.

If the subsidy is worth eleven dollars per hour but the moral agent is worth 10 dollars per hour (the moral agent is uneducated, or unskilled, or young) then there is absolutely no incentive to work as the return on effort results in a loss in revenue.

If the subsidy is worth eleven dollars per hour but the moral agent is worth 13 dollars per hour, then there is still less incentive to work. The agent considers the benefit of employment versus unemployment, and the net benefit is 2 dollars per hour. In most cases this means the moral agent loses money by engaging in employment.

Welfare decreases the utility gained by working, causing people to shift towards more leisure time while still satisfying higher demand priorities. In short, welfare makes any person who receives it, ceteris paribus, "lazy".

Oh.

You're back.

Peegee I thought you left the internet for good after Ron Paul wasn't elected Supreme Leader of the Known Universe this last November.

I'm keeping this thread in General Chat so we can troll it. (and you)

Oh, pg. You silly man.

also hi :love:

Yeah but on the other hand, the evidence shows a guaranteed minimum income is a great idea which doesn't negatively impact the incentive to work, except in college students and single moms, both of whom have better things to be doing than slaving away for minimum wage anyway. In fact, rather than making everyone 'lazy' people ended up working harder because they were able to actually train for jobs they wanted rather than grinding away all their energy just to put food on the table. Turns out what motivates people isn't money, it's satisfaction.

The moral of the story is that welfare should be given to everyone.

The other moral of the story is that even if you adjudge welfare to be evil, letting people become homeless and starve to death is considerably moreso.

The third moral of the story is that paying for all the security, police, prisons, unwanted children, addiction clinics, and so forth which become required after the fact is a lot more expensive than preventing this stuff in the first place. If libertardians want to keep as much of their money as possible they should be avowed social democrats, because it's a lot cheaper in the long run and there will be more people who actually have money to pay for things.

The fourth moral of the story is that PG still has absolutely no idea how the world works and shouldn't be trusted to give advice on painting your nails, let alone economic policies.

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Originally Posted by Peegee

welfare makes any person who receives it, ceteris paribus, "lazy".

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no u

What did anything of anything I said have anything to do with public policy? I merely explained what will happen when minimum wage and welfare is enforced. Nowhere did I say 'do not use minimum wage' and 'welfare and negative income tax' should be avoided. I only said it was destructive and then proceeded to explain why.

Have you perhaps used a really valid point and i'm impressed by your thinking. (that I'm a libertarian) and argued against it instead of the substance of the post itself?

The cited document where minimum wage did not increase unemployment happened for only two reasons: because the minimum wage imposed by the government was below the market equilibrium of supply and demand, or because people simply decided that working was preferable to collecting welfare subsidy, nothing more.

If you're ever willing to discuss this maturely we can continue from that point.

The rest of the post was completely uncalled for, and as a member of 'Staff' (you too, Pike, wtf. Publicly saying you are going to troll me is against the rules) I must publicly point out your incessant need to insult me and tie in 'libertarian' strawmen and the like. If you simply are unable to respond in a constructive manner the marketplace of ideas will and have made their decisions. They really have.

And no, I'm not butthurt - not even surprised.

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Originally Posted by I'm my own MILF

Yeah but on the other hand, the evidence shows a guaranteed minimum income is a great idea which doesn't negatively impact the incentive to work, except in college students and single moms, both of whom have better things to be doing than slaving away for minimum wage anyway. In fact, rather than making everyone 'lazy' people ended up working harder because they were able to actually train for jobs they wanted rather than grinding away all their energy just to put food on the table. Turns out what motivates people isn't money, it's satisfaction.

The moral of the story is that welfare should be given to everyone.

The other moral of the story is that even if you adjudge welfare to be evil, letting people become homeless and starve to death is considerably moreso.

The third moral of the story is that paying for all the security, police, prisons, unwanted children, addiction clinics, and so forth which become required after the fact is a lot more expensive than preventing this stuff in the first place. If libertardians want to keep as much of their money as possible they should be avowed social democrats, because it's a lot cheaper in the long run and there will be more people who actually have money to pay for things.

The fourth moral of the story is that PG still has absolutely no idea how the world works and shouldn't be trusted to give advice on painting your nails, let alone economic policies.

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I merely explained what will happen when minimum wage and welfare is not enforced. I only said it was not destructive and then proceeded to explain why.

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Originally Posted by Peegee

The rest of the post was completely uncalled for, and as a member of 'Staff' (you too, Pike, wtf. Publicly saying you are going to troll me is against the rules)

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You made the thread in General Chat, bro. You should have known what you were in for.

http://images2.wikia.nocookie.net/__...ie_Monster.jpg

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Originally Posted by I'm my own MILF

I merely explained what will happen when minimum wage and welfare is not enforced. I only said it was not destructive and then proceeded to explain why.

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I C Wut u did dare

Can we therefore conclude that minimum wage is mandatory across al production levels, or only in particular countries? For example should minimum wage be applied to poor countries where children also need to work as the parent to child ratio is too high? Should it have been applied shortly after the industrial revolution in order to prevent child employment?

My first post was clearly in jest and I hardly expected anybody to attack it so readily. Do you perhaps collect largesse from the state? You do, don't you?

Economics is based upon a simple premise: scarcity. Scarcity's very existence has consequences - namely that any scarce good can only be used by one person at a time, and while that does not necessitate [inserted personal experience's definition of] property rights, it does necessitate haves and haves not.

An example to illustrate scarcity without humans follows: we have organisms in an environment. A subset of the organisms mutate an ability to increase their fitness relative to the remainder of the ecosystem. As a consequence to further action, some of the species goes extinct.

The claim of the welfare and minimum wage supporters is that despite any changes in fitness, that scarce resources be allocated toward those who need it. The assumption inherent in this claim is simply that scarcity is not as limited as claimed, or that scarcity does not exist (that the rich people are keeping all this wealth in the form of paper. God if we only had MORE PAPER TO SPEND we would be MORE WEALTHY)

And no that is not a really valid point and i'm impressed by your thinking. that is a thinly veiled explanation of how the economy does not work.

I'm not even done ripping your nonsense into pieces. The secondary reason why minimum wage and welfare was successful in any scenario was that THE CITY OR STATE WAS ABLE TO AFFORD IT. And I don't mean the central banks printing money and giving it to the banks to loan out to rich people so poor people who can only spend federal reserve notes lose the value of their savings (gasp I'm against the bank?), but whether there's enough to go around.

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If we have no money, it doesn't matter if we print more money to give to you. Using inflated money to buy things only results in a mad dash by everybody to buy things until there's no more to be bought or the price goes up again. Blame inflation, and central banks. Don't blame greedy people hiding jew gold like Cartman. Seriously the idea that savers hurt the economy...dear God has economics been so grossly misunderstood?

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A final explanation on scarcity follows instead of what this thread should have been: a series of troll posts saying how it's awesome to receive largesse from the state because then people can afford to buy toys and junk food and video games and cell phones. Oh I didn't even make the thread about how capitalism has given us the best gadgets :( :( :'(

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In practice a socialised service increases the demand for the product to everybody who potentially could want it. Economics defines 'demand' as the ability to pay for a product or service. Whether demand is paid for by the act of theft or the act of voluntary exchange using money or barter, Say's law compels you to acknowledge that the repayment of the product must be made by productive acts.

In other words, if you cannot afford a Lamborghini and will not act to try to steal it / get it another way, you effectively have no demand for the car. You may say 'it would be sweet if I could drive one' but will never act on that imaginary end.

By socialising a good, the demand for the product increases. However the supply for a socialised good is still subject to scarcity. For health care, that scarcity comes largely in the form of manpower - there are simply not enough doctors in most countries with socialised healthcare to deal with everybody at once. This is why the wait time for healthcare in countries (like mine, Canada) are so high for certain services.

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http://lifesure.ca/wp-content/upload...a-1024x712.jpg

pg: returns and in 14 hours, this is what happens

It's not my fault. I expected Pike to go I SPENT ALL MY MONEY ON VIDEO GAMES AND MOUNTAIN DEW U MAD BRO???

and then i would play along and go 'FFUUUUUU PIKE HOW DARE YOU LIKE DIFFERENT THINGS WHY ISN'T YOUR HIERARCHY OF WANTS AND NEEDS THE SAME AS MINEE????'

Then I would use Pike as a scapegoat for why socialism doesn't work and everybody would be going 'oh that pg.mp3'

Instead look what happened. Now I have to talk about boring economics.

You began talking about them in the first post of this thread, silly!

It's teasing, you crazy bean. You know I love you <3

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Originally Posted by Peegee

It's not my fault. I expected Pike to go I SPENT ALL MY MONEY ON VIDEO GAMES AND MOUNTAIN DEW U MAD BRO???

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I don't have any money right now brah

work keeps cutting my hours and my W-2s aren't here yet so I can't even get my refund. (which I will in fact spend on video games and Mountain Dew)

no I didn't.

ilu2

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Originally Posted by Pike

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Originally Posted by Peegee

It's not my fault. I expected Pike to go I SPENT ALL MY MONEY ON VIDEO GAMES AND MOUNTAIN DEW U MAD BRO???

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I don't have any money right now brah

work keeps cutting my hours and my W-2s aren't here yet so I can't even get my refund. (which I will in fact spend on video games and Mountain Dew)

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'FFUUUUUU PIKE HOW DARE YOU LIKE DIFFERENT THINGS WHY ISN'T YOUR HIERARCHY OF WANTS AND NEEDS THE SAME AS MINEE????

SEE THIS IS WHY SOCIALISM WON'T WORK PIKE AND I LIKE DIFFERENT THINGS HUX COME UP WITH A SYSTEM OF DISTRIBUTION OF GOODS THAT HAS ECONOMIC CALCULATION BUILT INTO IT AND IS FAIR AND JUST AND ADDRESSES THE VIDEO GAMES THAT PIKE AND I DON'T LIKE BUT HAVE TO SHARE

WHY DON'T YOU LOVE ME PG :( why do you just love Sarah

P.S. Canada sucks, just come to Bozeman. If you can prove you're broke you can get healthcare for $5 and the wait is like one day

tl;dr like most peegee thrads but

>implying decentralised libertarian socialism doesn't have economic calculation built into it

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Originally Posted by The Man

tl;dr like most peegee thrads but

>implying decentralised libertarian socialism doesn't have economic calculation built into it

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ACTUALLY THAT'S EXACTLY WHAT I'M SUGGESTING AARON

If we're going to continue the semi-serious portion of PG's quarterly 'troll' thread, perhaps you can enlighten me. Because I'm not convinced.

I'll even help you out:

#1 calculation-in-kind:

an apple tree costs more in water and takes up more space but
an orange tree costs more in fertilizer and man hours to harvest

which costs less?

#2 do everything the same every day:

Are you serious?

#3 when do we upgrade?

solar power is renewable energy but the cost of production is unknown
should we switch from coal and oil power or nuclear power? why or why not

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etc.

Without free market price mechanisms you don't have a unit of measurement to discern / approximate profits and losses. Take weight loss: how do you figure out how to gain weight or lose weight? do you just eat more food? and then just determine from experience what a unit of food does to you? You know eating less food usually / might help lose weight but just ask anybody who knows about this (Julian, Jojo, Vivi) and they will tell you the body adapts. now what? just eat even less food??

You need calories to figure this out. You need to know your BMI as a heuristic.

MONEY IS NOT THE PROBLEM.

But libertarian socialism doesn't necessarily imply getting rid of money or price mechanisms or even necessarily restructuring society all that heavily? The main thing that would be required to change is that corporations would be handed over to their workers - and really, they would probably run themselves in a pretty similar fashion, except not as centred on short-term profits, because what's good for a firm of workers collectively over the long term is naturally, on the whole, good for its workers individually over the long term as well. There's no reason workers couldn't run their own businesses with an eye to what's needed in the market, apart from not being educated in business, and really, that's something that can be overcome by just educating them.

>Peegee vs. The Man vs. MILF

http://www.sowal.com/bb/images/smili...ng-popcorn.gif

What perplexes me is your continual insistence that we have enough resources/money - a position I broadly agree with - but that your solution to the massively unequal distribution of it is to continue and even enhance the very systems which brought about the inequalities in the first place.

No that's not my position at all. If it were affordable I wouldn't post except to say if it weren't it can't be done.

If Aaron thinks the solution is anarcho syndicalism then he wouldn't be using the word socialism nor concerned it is impossible. I don't get it.

Syndicalism can be profitable.

Syndicalism is a form of socialism, as are participatory economics, mutualism, etc. (although mutualism is sort of what you get when you mix socialism with capitalism). I'm not actually particularly picky about which of these gets implemented as long as it's one of them, because any of them would be an improvement on the current system :monster:

Well if we don't have enough resources then shouldn't we institute a rigorous development plan which has the authority and means to collect everyone necessary to develop technologies and industries until we do, and carefully and fairly ration our limited resources until they succeed?

You mean capitalism?

Our current system of crony corporatism is just a big subsidy for malinvestment.

Top down central planned distribution of scarce resource is just another variation of corporatism. The removal of bailouts and other moral hazards should pave out the bad investments and free up scarce resources toward your end.

Or we can continue to waste resources.

As an aside I think anarcho capitalists are religious fanatics. Philosophical quietism is the only sane perspective of economics.

By the way this thread was accidentally titled like a Harry Potter book. I wish we had magic. It would solve all scarcity problems except space and death and the societal consequences of a post scarcity world that forgot to deal with space issues.

Curse you scarcity!

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Originally Posted by I'm my own MILF

The fourth moral of the story is that PG still has absolutely no idea how the world works and shouldn't be trusted to give advice on painting your nails, let alone economic policies.

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But RON PAUL

I love this thread, keep going.

The economics of EoFF, by PG, the musical. Starring PG, MILF. Produced by Pike. With commentary by The Man and Raistlin.

YAAAAAY. PGies is back. <3


No sarcasm.

So anyway, the thing I don't get about ancaps is the magical power they all seem to credit to the government. Apparently the whole reason actually existing capitalism has problems is because of government intervention of the marketplace - corporations bribing politicians and the like. Ok, well, anyone with two eyes can see that this happens on a daily basis. The problem is, the solution is asinine. Just get rid of government and the corruption will stop? Just because you've gotten rid of what you call government doesn't mean you've eliminated the use of force. Companies will just bribe each other to enforce each other's property, form trusts, and basically rule the same way governments did, except they won't be called governments.

And people say vote with your wallet. Well, fine. As far as the aspect of being a consumer goes, that's a reasonable solution to a certain extent. But you can only accomplish so much doing that, and as an employee you have basically no sway over the way the company you work for is run. You can make suggestions, but there's nothing ensuring that anyone will even listen to these suggestions, much less actually enact them. Granted, in a democratic workers' cooperative you'd have no chance of your ideas being enacted either, but you could at least express them and if they were popular enough there would be a chance of them being enacted. In capitalism the idea getting enacted basically depends on whether one arbitrary person in power likes it, and as this person may be a representative of the Peter Principle or the Dilbert Principle there is no guarantee this person has any idea what they are doing.

I don't know where I'm going with this. I'm tired.

Even as a consumer the idea is rather flawed, as it assumes exceedingly good knowledge on the part of the consumer; it assumes sellers are honest rather than deliberately dishonest regarding their/their competitors products; it assumes numerous sellers; it assumes competing rather than covertly co-operating 'competitors'; it assumes a low bar for entry into a market when that bar is often very high; and it assumes changing service providers is easy and free when it's very often a hassle with charges attached. Most of these problems can be reduced tremendously by government regulation enforcing transparency, product standards, honest business practices, and so on. Removing government wouldn't help these problems*, it would just allow greater entrenchment on the part of the already-powerful.

*This point is the really bizarre one. Action A is widely agreed to be a negative and something to be discouraged/prevented. Corporations have a profit motive in carrying out action A. Government regulation stops action A. Corporations bribe government to permit it. What part of this is changed by abolishing government regulation/the government itself? I suppose it's technically true that it will reduce corruption and crime, but only inasmuch as there is nothing left to corrupt and no laws to break; the fundamental issue is that action A is still being carried out and the one safeguard on it, however weak or open to corruption, is now absent.

Survivor starts in two weeks, y'all.

Look, I would like you to think very hard about the idea of interpersonal relationships, and perhaps try to invent some interpersonal interactions that mirror your examples, then realise how they might sometimes not have a solution, or that there is an obvious solution.

For example, contrast what it (was) is like to be on my facebook wall with how I behave here. Those are relatively valid forms of 'government' if that entity ever becomes relevant in your examples.

That said, there's a tiny problem with your example - and that is that we need to have perfect knowledge when making decisions. We don't - and can't. In fact, to reverse the scenario, assuming you were an adamant top-down central planner (company owner or forum mod or government agent) and wanted to know how to motivate citizens to do x. Really, what is there to do but to work with heuristics and look at signals to measure success? Do governments have perfect knowledge? Seriously answer this for me because every attempt I've tried to rationalise central planning fails due to various inherent problems.

Here is the part where I have to concede your point - if you wiped government, the result is not utopian. However nobody has ever asserted as such - if you ever talk to Anarcho Capitalists (because ancoms and ansocs will tell you everything will be flawless but won't tell you HOW in any serious manner) they will tell you that a bad government is always worse than the worse that no government can do. Can a corporation like walmart force you to buy their products? are there really no alternatives if walmart decided to somehow monopolise all of the apples? and if coca cola wanted to monopolise all of the soft drinks so you couldn't drink mountain dew, are there no alternatives? Can walmart lend trillions of your money to the UK and make you pay for their loans? Can megabank inflate your currency and prevent you from going 'eff this noise' and take all of your money out of the bank and deposit them in another bank? can megabank stop people from opting out of their stupid monopoly money and trade with bitcoin?

Whenever I hear you scream 'oh they'll do horrible things to us without the government and there's nothing we can do about it' I am left scratching my head. how exactly will they do this? Just spell it out from scratch.

Let's say we got rid of government and walmart opens its stores tomorrow and decreases all of its prices in an attempt to starve out all competitors. We'll even assume walmart has the money to do this - by selling below cost it doesn't make profits, so the cost of production and manpower is also a loss. But it has so much money that every company cannot compete bc everyone buys from walmart. they fail to pay their bills and go bankrupt.

Now walmart can raise prices and control the market! But some people who have been saving money (bc walmart sold things cheaply this was easily done) buys up all of the capital from bankrupt companies (bc unlike mortgage backed securities guaranteed by government, they don't have a safety net and had to sell their assets for a loss to prevent a greater loss), and start selling their products for less than walmart was hoping to clear. OH CRAP NOW WALMART HAS TO DO IT ALL OVER AGAIN.

Eventually Walmart would run out of money by being an idiot.

But let's say hypothetically that megacorp produced goods at such a low price that nobody could compete with them. So what? Wouldn't you be happy to buy video games for a dollar each? natural monopolies are good for the economy because it uses less resources and the consumer benefits because the cost is low.

But yeah, that was all nonsensical ancap nonsense right? Right. Because I'm an anarcho capitalist right? Right. really valid point and i'm impressed by your thinking. more you two.

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Originally Posted by I'm my own MILF

Even as a consumer the idea is rather flawed, as it assumes exceedingly good knowledge on the part of the consumer; it assumes sellers are honest rather than deliberately dishonest regarding their/their competitors products; it assumes numerous sellers; it assumes competing rather than covertly co-operating 'competitors'; it assumes a low bar for entry into a market when that bar is often very high; and it assumes changing service providers is easy and free when it's very often a hassle with charges attached. Most of these problems can be reduced tremendously by government regulation enforcing transparency, product standards, honest business practices, and so on. Removing government wouldn't help these problems*, it would just allow greater entrenchment on the part of the already-powerful.

*This point is the really bizarre one. Action A is widely agreed to be a negative and something to be discouraged/prevented. Corporations have a profit motive in carrying out action A. Government regulation stops action A. Corporations bribe government to permit it. What part of this is changed by abolishing government regulation/the government itself? I suppose it's technically true that it will reduce corruption and crime, but only inasmuch as there is nothing left to corrupt and no laws to break; the fundamental issue is that action A is still being carried out and the one safeguard on it, however weak or open to corruption, is now absent.

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They will do it because they will use their vast monetary resources to hire mercenaries and, at the point of a gun, force you to do what they say.

I wasn't attributing any of those positions to you btw. You mentioned that ancaps are crazy and I was basically agreeing with that point :monster:

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Originally Posted by I'm my own MILF

They will do it because they will use their vast monetary resources to hire mercenaries and, at the point of a gun, force you to do what they say.

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Blowback. Actually I don't even have to elaborate much. Just look at USA's foreign policy's effect.

Incidentally I have found this entire thread to be an entire waste of my time. Milf here, possibly due to economic illiteracy has posted really valid point and i'm impressed by your thinking. after really valid point and i'm impressed by your thinking. which are full of economic fallacies i have taken the time to debunk. As a consequence, if this thread doesn't get deleted any person who can be bothered sifting through it can learn about:

scarcity, the effect of subsidies, conflict resolution absent coercion, and basic economic ideas.

the first post, if we can go back to it, illustrates that the more you subsidise, the less incentive the actor has, since the actor is rational, from expending unnecessary action.

for example if i could get an apartment, video games, computers, food, and a car by working at mcdonald's i have no reason whatsoever to work any harder. if i did, i would actually be wasting time and resources. going back to the other thread on gc "if you had the money what would you do?" - i would do all sorts of things if i had the time and money saved.

alternatively, in a society where technology was so great that the cost of living were virtually non-existent because the yield per labour hour was so great, the amount of leisure would increase dramatically.

in neither case should the actor be seen as negative - and so the attribution 'lazy' in the case of the welfare queen is actually false - the welfare queen sees no reason to exert excessive time and resource to do what was already subsidised, and to call the welfare queen "lazy" is perhaps sour grapes.

so the next time somebody calls you a lazy bum for being on welfare, just laugh at them for not understanding human action and economics.

but feel free to think that pg thinks welfare collectors are lazy. do you even read my posts before you reply? DYEL?

see you guys in a few months.

PG, for future reference to save you astonishment when this happens again and again and yet again: Most people don't tend to engage too seriously or heavily with people who have absolutely no idea what they're talking about and have consistently demonstrated no desire to learn.

Best Thread 2013

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Originally Posted by NorthernChaosGod

Best Worst Thread 2013

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/turns around

/leaves