Author Topic: Pseudo-demand, Pseudo-supply  (Read 17014 times)

Pseudo-demand, Pseudo-supply
« on: August 01, 2013, 12:21:06 PM »
Minimum wages are false values.  They do not accurately reflect society's true preferences.  In economics "preferences" are the same as "demand".  So false values/preferences are the same thing as a false demand.  Pseudo-demand will always result in pseudo-supply.  Minimum wages (psuedo-demand) prevent us from maximizing the value we derive from our limited resources.
 
Anybody a fan of Monty Python?  Here's a fun clip to illustrate the concept of false values...

[youtube:2e3qwcj0]http://www.youtube.com/watch?v=IMxWLuOFyZM[/youtube:2e3qwcj0]

If somebody asks you what your favorite color is...why lie?  Why risk being cast into the gorge of eternal peril?  In other words, why risk having to wear an orange sweater when orange is your least favorite color?  If your favorite color is green, then clearly there's going to be a value disparity between wearing a green sweater and wearing an orange sweater.  
 
When we input false values into the impossibly complex equation which determines how society's limited resources are allocated...it's a given that the output will not be accurate.  It will be less valuable than the output would have been if true values had been inputted.  The size of the value disparity will depend on how false the inputted values were.  

In computing, this is known as You are not allowed to view links. Register or Login.  It's equally relevant to economics...pseudo-demand, pseudo-supply.    

Just like it would be detrimental to lie about how much you value something...it would also be detrimental to have your true values ignored.  Here's a funny story from the bible that perfectly illustrates the problem with command economies (our public sector)...

Genesis 29

1 Then Jacob went on his journey, and came into the land of the people of the east.
2 And he looked, and behold a well in the field, and, lo, there were three flocks of sheep lying by it; for out of that well they watered the flocks: and a great stone was upon the well's mouth.
3 And thither were all the flocks gathered: and they rolled the stone from the well's mouth, and watered the sheep, and put the stone again upon the well's mouth in his place.
4 And Jacob said unto them, My brethren, whence be ye? And they said, Of Haran are we.
5 And he said unto them, Know ye Laban the son of Nahor? And they said, We know him.
6 And he said unto them, Is he well? And they said, He is well: and, behold, Rachel his daughter cometh with the sheep.
7 And he said, Lo, it is yet high day, neither is it time that the cattle should be gathered together: water ye the sheep, and go and feed them.
8 And they said, We cannot, until all the flocks be gathered together, and till they roll the stone from the well's mouth; then we water the sheep.
9 And while he yet spake with them, Rachel came with her father's sheep; for she kept them.
10 And it came to pass, when Jacob saw Rachel the daughter of Laban his mother's brother, and the sheep of Laban his mother's brother, that Jacob went near, and rolled the stone from the well's mouth, and watered the flock of Laban his mother's brother.
11 And Jacob kissed Rachel, and lifted up his voice, and wept.
12 And Jacob told Rachel that he was her father's brother, and that he was Rebekah's son: and she ran and told her father.
13 And it came to pass, when Laban heard the tidings of Jacob his sister's son, that he ran to meet him, and embraced him, and kissed him, and brought him to his house. And he told Laban all these things.
14 And Laban said to him, Surely thou art my bone and my flesh. And he abode with him the space of a month.
15 And Laban said unto Jacob, Because thou art my brother, shouldest thou therefore serve me for nought? tell me, what shall thy wages be?
16 And Laban had two daughters: the name of the elder was Leah, and the name of the younger was Rachel.
17 Leah was tender eyed; but Rachel was beautiful and well favoured.
18 And Jacob loved Rachel; and said, I will serve thee seven years for Rachel thy younger daughter.
19 And Laban said, It is better that I give her to thee, than that I should give her to another man: abide with me.
20 And Jacob served seven years for Rachel; and they seemed unto him but a few days, for the love he had to her.
21 And Jacob said unto Laban, Give me my wife, for my days are fulfilled, that I may go in unto her.
22 And Laban gathered together all the men of the place, and made a feast.
23 And it came to pass in the evening, that he took Leah his daughter, and brought her to him; and he went in unto her.
24 And Laban gave unto his daughter Leah Zilpah his maid for an handmaid.
25 And it came to pass, that in the morning, behold, it was Leah: and he said to Laban, What is this thou hast done unto me? did not I serve with thee for Rachel? wherefore then hast thou beguiled me?

LOL...that's a really funny, but messed up story.  It's interesting that Jacob only realized the trickery the morning after.  Do you think that you would have realized that you were sleeping with the wrong sister? Maybe it was really dark...and/or Jacob must have been really drunk...and Leah didn't say anything before, during or after sex.

Imagine Jacob went to a drive through restaurant.  Except, the menu consisted of women (Rachel, Leah, Zilpah, etc.) rather than food.  Jacob ordered Rachel, drove up to the cashier and paid 7 years of his life.  Unfortunately, it was only after he consumed his "meal" that he realized that he had been given the wrong woman.  

Command economies are non-sequitur economies.  The conclusion (Leah) did not follow from the premise (Jacob's preferences).  As a result, value was destroyed.  Pseudo-demand, pseudo-supply.

How much does our society truly value unskilled labor?  We really don't know.  And that's a problem.  If students don't know how much society truly values unskilled labor...then how can they possibly make an informed decision regarding how much effort/time/money (life) to invest in acquiring skills?  Why would you want to incentivize your son or daughter to drop out of school?  If we say that we value unskilled labor more than we really do...then we're increasing the incentive for unskilled people to immigrate to America.  Why lie to poor people in foreign countries?  If wages don't truly reflect the demand, then the supply won't truly reflect our preferences.  

The immediate consequences of living/minimum wages might be beneficial...but the subsequent consequences will always be far more detrimental.  This is because false values prevent resources from being efficiently allocated.  If you really don't believe me...then the next time you're at a bar/club...lie about your sexual preferences.  Let me know how it goes.
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Offline Fidel_Castronaut

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Re: Pseudo-demand, Pseudo-supply
« Reply #1 on: August 01, 2013, 12:37:30 PM »
Request to merge this with all the other carbon copy threads.
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Re: Pseudo-demand, Pseudo-supply
« Reply #2 on: August 01, 2013, 12:45:05 PM »
Unskilled labour?

Does that exist? Are there many jobs in your country for which you do not need to understand any language at all?

What are your thoughts about the costs of teaching someone a language?
Quote from: \"the_antithesis\"
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The moral high ground was dug up and made into a walmart apparently today.

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Offline the_antithesis

Re: Pseudo-demand, Pseudo-supply
« Reply #3 on: August 01, 2013, 01:09:26 PM »
What the fucking fuck are you talking about?

Re: Pseudo-demand, Pseudo-supply
« Reply #4 on: August 01, 2013, 01:13:18 PM »
Quote from: "the_antithesis"
What the fucking fuck are you talking about?

He appears to think wages that are unsufficient to make a living, let alone raise your kids to have any chance in society... are too high.
Quote from: \"the_antithesis\"
Faith says, "I believe this and I don\'t care what you say, I cannot possibly be wrong." Faith is an act of pride.

Quote from: \"AllPurposeAtheist\"
The moral high ground was dug up and made into a walmart apparently today.

Tornadoes caused: 2, maybe 3.

Offline Colanth

Re: Pseudo-demand, Pseudo-supply
« Reply #5 on: August 01, 2013, 01:41:54 PM »
Xero, the minimum wage has nothing to do with value, it has to do with the least-skilled people either being paid enough to live on directly by their employers or indirectly by their employers.  They're going to be paid the minimum wage, whether there's a minimum wage or not.

The negative value to society of people who can't afford basic food and shelter is far greater than the positive value of paying them that enough to be able to afford them.

Anyone who doesn't understand that shouldn't be discussing economics.
Afflicting the comfortable for 70 years.
Science builds skyscrapers, faith flies planes into them.

Re: Pseudo-demand, Pseudo-supply
« Reply #6 on: August 01, 2013, 01:44:31 PM »
I feel the minimum wage is there to stop the masses from rioting, while the banksters rip off the country.   So, I agree with the idea:
Quote
The immediate consequences of living/minimum wages might be beneficial...but the subsequent consequences will always be far more detrimental
Not that the masses can have any real affect on the value of money, because the masses only control about 15% of it.  The real masters of inflation are the top 1% who control most of the money.  And congress.

Re: Pseudo-demand, Pseudo-supply
« Reply #7 on: August 01, 2013, 02:46:54 PM »
Quote from: "Colanth"
Xero, the minimum wage has nothing to do with value, it has to do with the least-skilled people either being paid enough to live on directly by their employers or indirectly by their employers.  They're going to be paid the minimum wage, whether there's a minimum wage or not.
A wage is simply a price.  It either reflects what consumers (employers) are willing to pay...or it doesn't.  That you think prices have nothing to do with value...means that you shouldn't be discussing economics.  

Naw, I'm just kidding.  You can discuss economics if you want to.  Go ahead.  Here's a topic for you...do you think the preference revelation problem is a real problem?  Probably not right?  I'm sure that, just like the rest of the pseudo-atheists you have strong faith that congresspeople are omniscient.  They can reach into all our heads and pull out exactly how much we'd be willing to pay for defense, education and healthcare.
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Re: Pseudo-demand, Pseudo-supply
« Reply #8 on: August 01, 2013, 08:55:42 PM »
Quote from: "LikelyToBreak"
I feel the minimum wage is there to stop the masses from rioting, while the banksters rip off the country.   So, I agree with the idea:
Quote
The immediate consequences of living/minimum wages might be beneficial...but the subsequent consequences will always be far more detrimental
Not that the masses can have any real affect on the value of money, because the masses only control about 15% of it.  The real masters of inflation are the top 1% who control most of the money.  And congress.
Consider this quote from Michael Moore...

Quote
I'm a millionaire, I'm a multi-millionaire. I'm filthy rich. You know why I'm a multi-millionaire? 'Cause multi-millions like what I do. That's pretty good, isn't it?
So millions and millions of individuals reached into their pocket and "voted" for Michael Moore.  They gave him positive feedback.  Why?  Because they like what he does.  Therefore, his wealth is a reflection of how much he benefits people.  

This is how and why markets work.  It's not the 1% that decides one day that they are going to be the 1%...it's the 99% who chooses them.  It's the masses of self-interested consumers with their diverse and unique preferences and circumstances.  

When you go shopping...do you look at the "wealth tag"?  No...because there aren't any.  Consumers could care less how wealthy producers are.   They just want the most value for their money.  Therefore, people are wealthy because they provide the masses with the most value.  

Getting rid of minimum wages will provide the masses with even more value...yet you're concerned with the masses rioting?  Why would the masses riot when they could simply evenly distribute their money?  They could simply stop trying to get the most bang for their buck.  They could stop shopping around for the best deals.  They could stop trying to get more for less.  That would show the 1%.  It would also greatly decrease everybody's well being.
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Offline AllPurposeAtheist

Re: Pseudo-demand, Pseudo-supply
« Reply #9 on: August 01, 2013, 09:22:07 PM »
Read thread now attempting to unread thread..failing miserably. :|
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Offline Colanth

Re: Pseudo-demand, Pseudo-supply
« Reply #10 on: August 02, 2013, 12:20:20 AM »
Quote from: "Xerographica"
Quote from: "Colanth"
Xero, the minimum wage has nothing to do with value, it has to do with the least-skilled people either being paid enough to live on directly by their employers or indirectly by their employers.  They're going to be paid the minimum wage, whether there's a minimum wage or not.
A wage is simply a price.
As I said, people who don't understand economics shouldn't talk about it.  It makes no difference whether the employer pays by giving the employee a check or by giving the government additional taxes to make up for the increased welfare, Medicaid, etc. - the employer is paying the same (or more if the government gets involved in the money trail).

Walmart "saves" money by not providing medical insurance or enough wages for employees to buy insurance.  The government pays more for Medicaid and hospitals pay more for indigent care (a hospital can't turn you away, in most states, until it makes sure that you're stable - even if you have no insurance and no money). And many Walmart employees are on welfare and or collect food stamps.
Afflicting the comfortable for 70 years.
Science builds skyscrapers, faith flies planes into them.

Offline Colanth

Re: Pseudo-demand, Pseudo-supply
« Reply #11 on: August 02, 2013, 12:23:38 AM »
Quote from: "Xerographica"
Getting rid of minimum wages will provide the masses with even more value
And higher taxes (or more crime) - which will leave them with less money to spend.

The wealthy eliminate the spending class at their own peril.  How many poor people jumped out of windows in 1929?  How many wealthy people did?  (By October 1929, the wealthy had pretty much eliminated the spending class.)
Afflicting the comfortable for 70 years.
Science builds skyscrapers, faith flies planes into them.

Re: Pseudo-demand, Pseudo-supply
« Reply #12 on: August 02, 2013, 12:46:06 AM »
Quote from: "Colanth"
As I said, people who don't understand economics shouldn't talk about it.
Do you know what it means for resources to be efficiently allocated?
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Re: Pseudo-demand, Pseudo-supply
« Reply #13 on: August 02, 2013, 01:13:47 AM »
Pseudo-intellectual idea.
???  ??

Offline Fidel_Castronaut

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Re: Pseudo-demand, Pseudo-supply
« Reply #14 on: August 02, 2013, 03:28:31 AM »
Quote from: "Jmpty"
Pseudo-intellectual idea.

Pseudo-intellectual per se.
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