Our current economic downturn is the direct result of an imbalance in the global economy precipitated through labor arbitrage. Prior to our current condition labor markets were relatively confined within nation state boundaries. Within these boundaries nation states enacted laws in varying degrees to ensure (at least in most developed countries) that labor was provided basic protections against an often times capricious employer. In addition, to laws governing basic worker rights, labor was afforded the right to organize into unions, guaranteed a wage above the level of subsistence, and afforded job security enforced through business custom.

Most important was the assurance that today’s job would not become the lost job of tomorrow. But once the global economy surged past the nation state breakers the obliteration of labor security commenced unabated. With the outflow of corporate capital in search of cheap labor abroad and unregulated inflow of foreign labor via “Temporary Worker Visa” programs (L-1, H1-B, and others) no job was any longer secure regardless of profession. There was talk of retraining workers displaced by these free (or was it lopsided) trade effects but as more and more workers became displaced across a multitude of professions the talk subsided and the realization set in that all meaningful employment had vanished from the United States. The result was a liquidation of competence, purchasing power (consumption), and a once throbbing heart of global economic dominance.

At this point businesses around the globe finally realized that a vibrant global middle class capable of purchasing had died a slow and agonizing death. Slow in that little by little year by year their numbers declined has jobs were lost to lower cost labor markets. But this new army of low cost labor wasn’t able to sustain the insatiable consumption of the global economic engine – its meager wages could barely sustain the basic necessities of existence. The race to the bottom was complete – the economic engine back fired one loud and last gasp for consumption – then expired.

The above will be our shared future both capital and labor if we don’t fully realize that one without the other does not make for an economy. Greed can only be a short term benefit for the long term result is an extreme maldistribution between capital and labor that eliminates any possibility that labor will easily regain a lost middle class propensity to consume. Granted capital will enjoy their excess wealth but this is a hollow transitory victory.

We must come to the realization that our current economic condition is a structural defect that can be remedied only if we work together.

To continue reading go to:
http://structuraleconissues.blogspot.com/

A market is “free” only in name, when there is only one seller. Free market, implies choice and compettion. If there is only one sellers how is there choice and competition.

Also, a market is free in name only, if the cost of entering that market is so high that only 1 person or 1 cooperation can enter. They then have a monopoly on that product.

David, seem to believe that a free market is a system in which there is no government regulation, period!! Anyone is free to choice to enter that market or not!!

Welll, I like to enter the car market. But I can’t! Not b/c of government but b/c I don’t have the capital, cost too much. Here, the hindrence to me entering that market is not government, or not b/c I don’t want to, b/c I don’t have the capital; the effect is the same.

Thus, I say that it is inherit in the very nature of the Free Market, that it will eventaully create a system in which it is no longer free. This is true of all systems of competition. The weaker will drop out until in the end there is only one.

Contrary to what David believes, 1 capitalist in a market is not a free market. It is a monopoly.

We need to remember that there is a difference between ignorace and stupidity. As honest economists, we need to look at the unseen and help others in doing this as well.

It’s horrendous the amount of economic ignorance that abounds. I remember on the Daily Show where Jon Stewart claimed that opposition to the minium wage hikes was sticking it to the poor. Normally I like Jon Stewart, but sadly his economics are dismal. Whenever someone tells you that minimum wage laws are good for the poor, ask them what America’s homeless think whenever the government raises the minimum wage.

Another problem is disputing historical myths, such as the myth that the Industrial Revolution was a time of decreased standards of living and that government regulations made things better, while big businesses fought tooth and nail. In reality, most regulations where of course lobbied for by big businesses to restrict competion and thus, gain monopoly status.

If you reduce the number of sellers down to one, is it still a free market? Whether the number of sellers is 1 because of government regulation or competition has killed off the other competitors, the result is the same, your choice has been reduce to one.

Response: a mere count of the number of suppliers ( or consumers) does not give any indication of how free a market is. In principle, it is even possible for a single-supplier market to be free.

the test for market freedom lies in the extent to which the state ( or any other agency with coercive powers) is able to constrain the choices of both buyers and sellers, and indeed, potential buyers and sellers.

A single-supplier market is still free if there is no impediment to anyone entering that market as a competitor. If no-one chooses to, that choice would clearly be freely made, in response to the perception that the existing supplier is so efficient or makes such small margins that it is not worth doing so and their investment is better deployed in other areas where the demand and potential for profit is larger. And that is as it should be, because where demand and profit potential is greatest is precisely where productive effort is most needed as far as the entire community is concerned.

In their zeal for the selective application of their partial understanding of the benefits of a free market, some Western countries ennthusiastically pursue absurd anti-trust or competition legislation, commit the amazing irony of forcing competition by law, even in markets where it may not be necessary or desirable for consumers, and thus making a multi-supplier market decidedly unfree and less efficient than it would be with fewer suppliers. The logic behind this is so weird that I still don’t understand it.

alternatively, koobphong is carpet-bombing.

anyone who insinuates the us car market is not competitive is missing the big picture. sure, subsidies to the big three abound, but there are plenty of imports to mix it up, look at the shares prices of ford and gm and tell me who’s getting whipped. the us is the most competitive car market in the world, notwithstanding all government distortions.

were there votes in the hot-dog market, politicians would be all over it with “free” money. try and open a street stand without a licence and you’ll realize pronto that even the hot-dog market is far from an unhampered market. you’ll be dealing with health and local government ordinances long before you get to wield the ketchup or mustard.

The irony is strong.

For example, compare market A and market B. Now market A have 5 sellers, market B have 6 sellers, which of these market is freer?

If you reduce the number of sellers down to one, is it still a free market? Whether the number of sellers is 1 because of government regulation or competition has killed off the other competitors, the result is the same, your choice has been reduce to one.

The free markets follows the law of survival of fittest. In any fair competition, the less competent will eventually die out leaving the most fit. They will consoldate and/or die out until eventually there is only one; the cooperation.

So, how free is the automotive market in the United States? 3 or 3 degrees of freedom. The free market exist if we are sell hot dogs down the corner of the street but not if we are making cars… it is just simply too expensive to enter that market.

So, there is no free market in the classical sense, not bc of government but because of the laws inherit in the very nature of the system itself.

I was introduce to the Austrian school of economic in business school and it made me a republican. I’ve been trying to follow it but but most of the people are simply reharshing old ideas.

here in australia, the term “economic rationalist” is used as a pejorative. it’s said with a curl of the lip, and never to defend “economic irrationality”, as logic would dictate. rather it’s shorthand for cold, robot-like fixation on theory, riding roughshed over human emotions.

the left is always going to win the game if we want to play on their turf – “tragedy”. they are feeble when playing on our home ground – “comedy/irony”. south park’s success should be a wake-up call that even the great unwashed can sense b.s. from a mile off, and it’s the left’s very earnestness and humourlessness is where their flank is wide open.
pj o’rouke nailed this point years ago.

As a woman, I am embarassed to say this (not to mention the fact that it may tick off Karen De Coster), but the majority of women I know have no interest in basic economics.

They’ll complain about the price of gas and home heating oil and say that the government should do something about the oil companies. Tell them that oil was $28/barrel before we started up the war in the Middle East, and they give you a blank look. If you’re on the phone with them, they’ll suddenly say they have to take another call and that they’ll get right back to you…they never do.

The other day a Libertarian got up on her high horse with me saying that people need to be more proactive about fixing government and not wasting time reading all this “stuff” about libertarian philosophy and economics. During the course of the conversation, it came out that she didn’t even know that the dollar was in trouble. : \

I wonder what they would think of this:

“The Fed slashed U.S. interest rates by three-quarters of a point, the biggest rate cut in more than 23 years, in an emergency bid to support the U.S. economy.” CNBC.com

I could be wrong, but I don’t think the term ‘capitalism’ necessarily entails the nexus of state patronage and private enterprise.

response: you have a good point, and indeed, it IS mercantilism. But the hard part is to explain all that to the other side, and the ‘undecideds’, who are mostly unfamiliar with economic basics.

it remains remains unfortunate and obscures more than it illuminates: the very etymology of the word ‘capitalism’ implies the wrong message: why should the term for only one of the several factors of production be used to label a market system that disavows special treatment for any one of them? what makes the label ‘capitalism’ different from ‘labourism’ ? Like it or not, if we are to try to disseminate the ideals of liberty and economic freedom, branding and sensitivity to unintended implication are things not to be dismissed lightly.

PS: Noticed theres another ‘David’ posting on some of these threads. I have added the initial C to diferentiate…..

That’s a good point. Socialists have ruined our best terms, liberalism, capitalism, free markets. The invisible hand and free markets translate to chaos for most people. Somehow we need to get across to people that the choice is between consumer directed markets and bureaucratic dictated markets.

“CAPITALISM–that ugly nexus between the exercise of State Power and those (nominally) private corporations which are the beneficiaries of the exercise of such power.”

However, I think the term ‘corporatism’ (aka, mercantilism) would be a much better fit for the definition you have given.

I could be wrong, but I don’t think the term ‘capitalism’ necessarily entails the nexus of state patronage and private enterprise.