Current Events — HabitableZone

Current Events » in reply to The Reader's Digest school of economics.

"Some businesses shouldn't be in business."
Robert — (archived)

That's it in a nutshell: A business that can't afford to pay its employees a living wage is a failed business. Let "creative destruction" work to replace it with a healthier business.

What keeps those marginal businesses alive is a thoroughly pro-business environment in which the government is a partner in ensuring a pool of people desparate enough to work for sub-subsistence wages. As I noted elsewhere (and was ignored, of course), the Fed has long had a policy of tightening the money supply when unemployment gets "too low" (by the standards of employers who benefit from slave wages), to induce more unemployment.

The justification for that heavy-handed intervention in the labor market is that full employment is inflationary. Inflation is what happens when a market is allowed to freely adjust itself to supply and demand, so I have to point out the hypocrisy of free-marketeers who shriek over any tiny encroachment on the rights and privileges of business, while supporting intervention in the labor market when it profits them. To a free-marketeer shilling for big business, what's sauce for the goose is definitely not sauce for the gander.

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