Bill Gates and vested interests

The world’s richest man thinks robots that displace human labour should be taxed and the money used to fund philanthropic employment in health care and education.  This proposal would suit the interests of the one per cent but there are probably better ways to deal with problems created by the agricultural surplus.

Bill Gates deserves some credit for his philanthropy and for recognizing educational and health care needs although one has to be concerned about the economics of how he became the current chairman of the board of the world’s elite.

To evaluate proposals like this we need to look at the vested interests of the person making them.

Mr. Gates’ foremost interest has to be in maintaining copyright and patent legislation as that is the foundation of his fortune.  If our society did not have that legislation he would be just another clever computer nerd, we would all be using cheaper and better software and there would be a great deal more equality in our society.

His second greatest interest has to be promotion of the social monitoring and tracking industry. The future of his fortune probably depends upon the success of Microsoft in tracking and monitoring all people so the information can be sold to advertisers.  I fear this not so much because of the advertising but because once the information is collected it will also be available to governments and the one per cent for social control.  I switched my computer to linux minx because I figured Microsoft was getting too blatant and too untrustworthy in its collection of information.

Another major interest of this guy is full employment and the work ethic.  He needs for everyone to be working so we can all purchase his software and be subject to targeted advertising.  If that does not happen his position as the richest man on earth becomes precarious.

Another of Mr. Gates interests is the maintenance of poor people in this world.  Without them he would not get brownie points for philanthropy.

Will his proposal help to save jobs?  Probably not because the root problem is that we have used up the most easily available energy and mineral resources.  Those that are left will take so much energy to extract their value is limited.

The development of robots should be seen as part of a long-term technological development which has given us a high agricultural and material goods surplus and which allows all the benefits of modern civilization.  The challenge is to use the technology for the greatest enjoyment of human lives.  It may be the greatest benefit would come from a new emphasis on doing arts, crafts, music  and theatre rather than marketing more elaborate gadgets.

So there are two things which might interfere with Mr. Gates’ desire for full employment and his future.  First is the depletion of energy and mineral resources which will reduce our economic activity and the second is if more and more people get fed up with the marketing conspiracy and reduce their interest in contributing to economic growth.
 

Minimum wages and poverty

A $15 minimum wage would be great for those employed by the fast food chains but would probably do little to alleviate poverty for those who remain unemployed or otherwise close to the line.

This observation follows from a Business Insider video interview with Paul Krugman.  I was concerned because it is not clear the headline is supported by what he said.   Here’s the headline: “Watch Paul Krugman, in 2 minutes, Destroy The Argument That We Can’t Pay Fast-Food Workers Higher Wages” and here is what he said:  “But what all the evidence says is we can raise these wages without losing a lot of jobs.  The best research on minimum wages all says that when the minimum wage is as low as it is in the United States there is hardly any cost to raising it.”  I know the guy won a Nobel Prize in economics but that is all the more reason to carefully evaluate a statement such as this.  Sometimes people who are recognized as experts make unsupported statements outside their specialty.

In this case he may be partially right.  Some firms in industries that usually employ  low-paid workers have found they can do well by paying their staff better than usual and providing decent benefits.  Employees who are being treated well stay on the job longer and provide better service to customers. This may not apply to all firms in all industries. 

But the reality is that generally wages are determined by supply and demand and governments that try to fight market forces often make things worse.   That people are willing to work for current wages paid by the fast-food industry indicates the supply exceeds the demand.  There may also be small firms paying low wages that genuinely cannot pay $15 per hour.  There could also be lots of owners or self-employed people not making that much.

Perhaps this should be considered a problem of poverty and we should be looking to alleviate all poverty rather than just for those who make the most noise.

I believe we should have a collective responsibility to ensure everyone has the opportunity to live at the same standard as most other people.  One way to do this would be a universal income scheme.  As well as dealing with poverty such a scheme would in effect set a minimum wage determined by supply and demand in that people would not have to work for low wages for life support.

Poverty is a big issue in North America and around the world, one which is probably going to get worse as the economy continues to slide.  Let’s try to arrange our economy so that no one has to live in poverty.

 

If you liked this post your are invited to comment, press the like button and/or click  one of the share buttons. If you disagree you are invited to say why in a comment.  While I like the idea of sharing this platform, my personality is such that I don’t reply to many comments.

Is minimum wage legislation the appropriate way to deal with poverty?

The problem with minimum wage legislation is that it is an inappropriate tool to solve a very difficult problem.  A universal basic income would be a more effective way of dealing with poverty.

People working for low wages are only a part of the problem of people struggling to survive on minimum incomes.  Legislated minimum wages may help some people at the bottom of the wage scale, but it will do nothing for the others and may even add to the number of unemployed.

The agricultural surplus is the excess food a farm worker produces beyond his/her own needs.  This is what allows the rest of us to do the things we do. With the huge agricultural surplus we currently have and with modern technology we do not need for everyone to “work” for the most part of their lives.

In our society we have traditionally distributed this surplus via jobs and wages.  It may be this system is breaking down and we should be looking for alternatives such as a basic income scheme.  Unfortunately many people have a religious quality belief that employment is essential and that anyone who does not work his/her entire life is a deadbeat.  The work ethic is great for those who want to build empires based the work of others.  Maybe the minimum wage is appealing because it is seen as a way of transferring profits to workers.

Another problem with minimum wage legislation is that it distorts the operation of the market and some low paying jobs may be lost as the minimum wage raises costs.    A universal income scheme would allow individuals to decide the minimum wage at which they would work.  Those people who want to eat fast foods would have to pay enough for the restaurant to attract workers as people would not be obligated to work in order to survive.

We probably should not take for granted the agricultural surplus will continue indefinitely as there are many things which could wreck our food factories.  There could also be problems with the non-agricultural part of our economy.  In either case minimum wage legislation will not be of much use whereas a universal income scheme might make adjustments easier.

 

If you liked this post your are invited to comment, press the like button and/or click  one of the share buttons. If you disagree you are invited to say why in a comment.  While I like the idea of sharing this platform, my personality is such that I don’t reply to many comments.

Poverty, economic growth and unconventional thinking

With the economic crisis there has been increasing inequality and increasing poverty.  Poverty is something we should be addressing.   I believe we should have a collective responsibility to ensure everyone has the opportunity to have a reasonably comfortable life – the same level as most other people.

Conventional thinking says we need economic growth to provide jobs and relieve poverty. This article is an example.

It may be poverty is now being caused by a situation we have not experienced in our collective memory and that unconventional thinking is required.

johnny_automatic_startled_bearsThe probable cause of the economic crisis is that we have used up most of the easily accessible energy, mineral and topsoil resources.  As it takes more work and energy to harvest the remaining resources further economic growth is difficult if not impossible.  We may even have to cope with negative growth.   Trying to force economic growth will only consume more resources and make things even worse.

Even if the resources for growth are available we have so much technology there really is not the need for everyone to be producing more.  Back in the Middle Ages there were three classes of people – those who prayed, those who fought and those who worked to support the first two.  These days it only takes a few people to produce the food to support those who fight and those who consume.

Therefore demanding that governments provide more jobs is not reasonable.  We have to find some other way of ensuring that everyone  has a comfortable life.  One proposal for doing this is in the essay “LETS go to market:: Dealing with the economic crisis” on this weblog.

Poverty

In exploring the world beyond the view from my study window (a large, lush green yard surrounded by tall trees and the mountain beyond the river valley) I came across a discussion of reasons for giving money to the poor.

I believe we have a collective responsibility to ensure that everyone has the opportunity to experience the same standard of living as everybody else.   This should apply to all the people of the  world.

This does not mean that everyone should have to take that opportunity. If a person chooses to do something else that is okay whether it be a life of poverty and medication in a cave or a life ruined by  drinking.

I also believe that full employment is not a realistic goal.  Nor is full employment desirable if it means working for the sake of working when there are other things people could do if they wanted. Nor is full employment desirable if it means using up scare resources or destroying the environment.

I also believe subsides should be given to consumers rather than producers.

And I believe that we as individuals should be able to make our own decisions according to our own values.

Therefore we should deal with poverty and/or ensuring everyone has the opportunity with some sort of universal income scheme.  Milton Friedman proposed a negative income tax.  I take the concept further and suggest an income scheme combined with a new way of creating money in the form of universal subsistence payments.

In either case the income scheme would replace all subsidies to producers and all other income support to individuals.

This approach would require some heavy-duty changes in our ways of thinking and behaving.  Many people would find it difficult to get their minds around these changes.  However, considering the current economic crisis and all the threats it may be that we need drastic changes.

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