Minimum Wage, Good or Bad?

   The minimum wage supporters are pushing harder than ever.
   The people in favor of it like to refer to a "living wage," whatever this is. It has yet to be definitively defined, although it is touted as the least amount of money a person or family needs to survive. They generally view the government as being responsible to force the employers to pay a set minimum hourly wage.
   Many of the leaders in the argument against the minimum wage are business owners, and they are frequently demonized for this, even though they rightly maintain that they need to preserve their profit margin in order to stay in business.
   In this they are correct. However, there is a problem with their argument which prevents them from prevailing in the debate.
   Many economists also warn against the minimum wage, as they have determined that it would only raise prices in the long run, and the relationship between prices and wages would return to equilibrium, just at a higher numerical value.
   They are also correct, but their argument has the same failing as that of the business owners.
   Those who support the minimum wage will almost always prevail through emotion and deception.
   We have all heard the many emotional arguments about these poor people not having enough to live comfortably on. There is no need to replay them here.
   Deceptively, we are told repeatedly that business owners are wealthy, greedy, individuals who aim only to pocket as much money as possible at the expense of others. This is fostered by a minority of business owners who have demonstrated themselves to be exactly that, but is certainly not true of the majority.
   In my opinion, an unfortunate side effect of this kind of thinking is that business owners are led to counter with the argument that their profit margin will not support a higher minimum wage. Although this is frequently correct, this counter does not suffice to refute the accusation of greed, mostly because people are more willing to accept the argument that someone else is greedy long before they will admit to their own shortcomings.
   What will be the effects of a higher minimum wage? The devaluation of the dollar, mediocrity in the workplace, increased unemployment, and the possible end of the minimum wage.
   To understand how the dollar will be devalued, an understanding of what the dollar really is must be accepted. The dollar itself has absolutely no value, unless its value as kindling in starting a fire is considered. The dollar is simply a means to compare value between multiple different products or services, and a convenient means to exchange them. Whether we give it a value of 1 or 10 is meaningless to the relationship between supply and demand, except where it temporarily skews this relationship in the short period of time between the revaluing of the dollar and the return to equilibrium in the supply and demand relation. The minimum wage does not change the amount of supply and demand, it just changes the amount of dollars used to measure it. The number of dollars used to measure a resource has no bearing on the amount or quantity of that resource available, nor on the need for it.
   How does the minimum wage cause mediocrity in the workplace? No matter what the business is, it has a certain amount of value to use to pay wages. The assigned value of the dollar does not change this fact. What the minimum wage does is force the business to pay an increased value to entry level and substandard workers while reducing the amount of value left to reward the better workers and those with the most experience. For example, if a business has enough available value to pay 10 workers an average of $10/hour, and there is no minimum wage, that business could start people at $5/hour, and give them generous raises as they earned them, as long as the total in wages did not exceed what the company could afford. This would be a powerful incentive for workers to stay longer and do a better job, as they could potentially triple their wage by doing so. If, however, the minimum wage was $10/hour, in this scenario the business would be required to start all employees at the $10 level, and would have no room for incentive raises. In this situation, no one would have a tangible financial reward for doing better or more efficient work, and human nature being what it is, most workers would simply work to the level of the least common denominator, eliminating competition for the higher wage which is no longer available and creating the aforementioned mediocrity.
   The resulting increase in unemployment should be obvious. Once equilibrium returns after the initial change in the assigned value of the dollar, the consumer's quest for lower prices will again take over. As long as there is an area which does not enforce the same minimum wage, there will be cheaper prices to be obtained from that area, which will increase the demand for products from that area and decrease the demand for products originating from the area in which the minimum wage applies.
   Eventually, as hourly wages are increased by government edict to higher and higher levels, the hourly wage will be necessarily replaced by other means of pay, such as commissions, piece count, and pay through independent contracts. When this happens, the minimum hourly wage will be meaningless, as it will be increasingly less available.
   The minimum wage will certainly go up, thanks to politicians who pursue votes by preying on the people who are uninformed about the economic consequences of it. Most of those who really understand it claim that it is a terribly destructive idea in terms of the economic health of the country, but I am beginning to disagree. Rather than fighting about it, maybe we should allow the politicians to raise the minimum wage as fast and as high as they dare. This would actually hasten the demise of the hourly wage, causing it to become obsolete much faster, and allowing people more opportunity to exchange value of labor, products, and services at a much more equitable level once the hourly wage is gone.
   Let's raise the minimum wage so high that the hourly wage disappears, and we can get yet one more step closer to the free market principal of exchanging value for like value.
   The central planners and socialists desperately want a minimum wage, but history shows that all of their plans succumb to the free market as they fail, and the sooner their plans fail, the sooner we will be free of them.
   
  

The Virtue of Counterfeiting.

   I have probably already lost most readers with the title. Please bear with me if you're still here, though, there is a point to this post.
   To begin our train of thought, we must look at capitalism and what it really is. We must also look at the relationship between capitalism and freedom.
   Capitalism is simply the use of a small and convenient item, such as a seashell, a metal coin, a piece of paper, or an encoded bit on a computer to represent the value of an object, product, or service for the sake of convenience.
   One of the first, and largest, benefits of capitalism was the newly found ability to convert a bulky and cumbersome product to an easy to transport quantity of money, which could be carried to or from markets or on travels, and which could be stored for future use much more easily than the bulky product which it represented.
   Prior to capitalism, travel was restricted by the difficulty of carrying enough wealth on which to subsist. After capitalism, travel became much easier because one could now simply convert goods into currency for the trip, then convert some of it back when needed.
   This aspect also opened up a whole new world of trading opportunities, as now a huge and expensive caravan was not needed to transport the wealth, all that was required was to move the more convenient currency.
   Another benefit to capitalism was the birth of the service sector, the possibility of paid industrialization, and the beginning of the end of slavery. Now, by the use of capital, the wealthy could pay people to provide services and work in their industrial endeavors, and no longer had need to directly support large groups of servants and slaves. Employment, in a real sense, had been born, and with it the ability of anyone to exchange their labor for capital, and then exchange that capital for their needs and wants, without having to produce everything for themselves or give themselves over as a servant to another.
   This ability to convert back and forth between goods and services and currency allowed further specialization, which in turn introduced better and more innovative products and further fueled trade.
   As the years went by, and the benefits of capitalism increased, a terrible thing happened. Governments learned that they could get away with requiring everyone inside their control to use their currency. The governments began to monopolize currency creation. Why was this so terrible? Now the governments could influence prices by controlling the amount of currency, and hence limiting the ability of the individual to negotiate their own prices. The governments could also control trade and wage economic war by setting exchange rates with foreign currency, or by refusing to accept it at all.
   Government involvement in currencies eventually gave the governments of the world more influence over the economies than individuals could ever hope to gain, with the exception of a few brilliant entrepreneurs who arrived on the scene from time to time, but the governments dealt with them generally by creating anti-trust, or anti-monopoly , laws, all the while trying to conceal the fact that the governments had attained the greatest monopoly of all, money.
   With the significant level of control over economies came a similar control over personal freedom by way of the ability to either easily seize the wealth of individuals or to actually change the practical value of that wealth by manipulating the currency.
   Capitalism was so abused and distorted in this manner that people began to fail to understand what it actually was, and the public attacks on capitalism stemmed from the simple fact that people, no longer recognizing capitalism for what it was, began to attack this distorted capitalism which governments had spawned and the unscrupulous gladly used for their own purposes.
   And so we come to my point. Anyone who truly values freedom must oppose and seek to eliminate the government's monopoly on currency creation and control. Up until recently, the only realistic way to attempt that was by counterfeiting the government's own currency. Of course, those in power sold this activity as a major crime against the people, but creating fake currency, in and of itself, does not affect at all the amount of goods and services on which the economy is really based, nor does it change the demand. It simply takes power away from those who seek to have complete control over the currency. By this reasoning, a significant amount of counterfeiting could actually be beneficial to freedom by diminishing government control over free trade.
   The penalties for counterfeiting could be quite severe, but now there is an even better way to advance freedom. Crypto-currencies have entered the fray. Now virtually anyone can transfer their wealth into a digital currency over which the governments have little or no control, and by so doing, increase their own personal freedom by escaping government price controls, diminishing the chance that their wealth will be confiscated, and by living and working outside of the established order.
   So give up the risks of counterfeiting, and strike a blow for Liberty by converting your wealth into whatever non-governmental currency you prefer. When enough people do this, the governments will lose most of their power over us, and we will all regain a large measure of our lost freedom.