One of the biggest complaints about Libertarian ideology is that it chooses to leave the poor behind. Who will provide jobs to low skilled workers if new disruption? How will there be ways to feed poor people? These questions are valid. However, these greatly misinterpret libertarian ideology and make-work bias. In fact, the efficiency by which libertarian and free-market policies help the poor is remarkable. It is no secret that the American poor are the envy of the world. In fact, compared to most parts of the world and even compared historically to wealthy Americans at other times in American history, the American poor are rich. Some point to the welfare state as the source of this incredible wealth on the part of the poor, but this wealth existed before the major welfare programs and comes largely from an efficient market economy created before the advent of the welfare state. McDonald’s, Microsoft and Wal-Mart might seem like evil monstrosities to big-government supporters, but all organizations have done more than most other companies, possibly as much as the government to bring the American poor forward. The companies do this by providing good food and products at affordable prices that allow poor individuals to spend less of their incomes on necessities while also affording luxuries. Even though wages have been somewhat stagnant over the past quarter century, with the exception of the cost of housing, standard of living has drastically increased. Now, people can afford things like cameras and watch countless hours of videos. For all the people reading this wondering who libertarians believe should feed the poor in the case of natural disasters or long-term unemployment, know this; libertarians do not want to do nothing. They simply believe that help should come from fellow neighbors, from church parishioners and from friends. Statistically, conservative and libertarian minded individuals volunteer and donate more than members of any other political ideology. In the meantime, during those disasters, libertarians and conservatives are also working on businesses that might seem like profiteering but actually save lives. Many of these new businesses would not exist without the need for new income created by a phase of unemployment. If you would like to help out with volunteering, here is a good site: https://www.volunteermatch.org/
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Two of the most popular teen series over the past several years have been the Hunger Games and Divergent. These books focus on a dystopian society wherein everything is controlled by the government and by the systems the governments have created. These books are not only fascinating reads that teach important lessons about the problems of central planning, they are great case studies in make-work bias. Panam, the country where Katniss Everdeen lives, is filled with incredible poverty and stunted economic growth. However, nearly everyone has a job, and most jobs are provided by the government. President Snow even brings up that Panam's government provides jobs to its people during the revolution. These government jobs are merely a way of sustaining the government and its economy and keeping the people away from revolt. The jobs do little to advance the standard of living of the people, provide economic growth or help make lives easier. Many of these jobs are incredibly inefficient and created to keep the residents busy. In fact, these jobs ensure that residents have poor standards of living as they cannot work to improve their standards by using privatization to specialize their labor force. This might seem too ridiculous and wasteful to actually occur, but in the Soviet Union, these wasteful jobs were given out in incredible numbers as a means to appease a population which considered jobs a guaranteed right. Even jobs that technology had made obsolete were kept in order to occupy citizens, just like in Panam. In Divergent, we see a civilization that similarly uses government to ensure the mass employment of its population. A system is created wherein everyone can choose a particular faction and upon passage of a series of tests, become a part of that faction and be guaranteed a job. Even this merit based system is extremely flawed as the lack of a healthy private sector stops full employment from emerging to protect the factionless, leaving many citizens in poverty as central planning has stopped them from being able to seek work within the general public after failing tests. Unable to seek real work, the factionless are forced to live off of government handouts. Similarly, a substantial amount of energy and many of the innovations the Erudite produce are used to sustain the system, not to actually better the welfare of the civilization. In the end, even a merit based government guaranteed employment system fails to forward the rights and welfare of citizens. While guaranteed work makes interesting teen fiction, it has little place in our real society. This graph shows economic growth plotted alongside the rate of innovation as shown by economist Joseph Schumpeter. The graph shows that innovation drives economic growth and without innovation, major growth fails to occur. The graph also shows the accelerated pace of innovation as time goes on as new innovations occur at a much faster rate currently. Even if new technology harms employment, economic growth will allow employment to cycle again and stabilize. By: John Golden Some say that trade agreements are bad for societies because they allow people from other countries to take jobs created by Americans. We’ve all heard the cries that “The Mexicans are taking our jobs!” With the TPP vote approaching and America on a path to enter a new free trade agreement, it is important to ask the question; are maquiladoras taking American’s jobs, and would this loss be such a bad thing? First off, the answer to the question of whether NAFTA took American’s jobs is both yes and no. NAFTA definitely shut down some American factories, and a lot of low skills workers in America were forced to find work elsewhere, often without a place to turn and requiring substantial amounts of education to get back into the workforce. Gone with the tariffs were many blue collar low-skilled manufacturing jobs and potentially even the label “Made in America.” However, NAFTA did not kill American manufacturing. In fact, American manufacturing was strengthened as NAFTA helped to create jobs in the skill-intensive manufacturing and the programming industry. These jobs and the synergies created from comparative advantage in trade more than made up for the jobs loss with job growth in better paying sectors. A lot of the workers displaced after NAFTA had trouble getting back to work, often requiring complex programs to retrain them for work in other sectors. Many elderly found no work at all. However, the truth about the jobs NAFTA lost America is that they were not going to be here forever. They were in low-tech low-skilled fields that Americans simply were not willing to do for cheap enough. Losing those jobs had two major positive effects. First, those workers were able to be retrained before it became too late, and the costs of products went down in America stimulating the overall economy. We could have locked the doors to save jobs, but that would not have in the end saved jobs or boosted standard of living. In the end, jobs that cannot be saved must be cut. This is something to consider when thinking about the TPP, which will create far more intellectual property and high tech jobs than it will destroy. Read more about NAFTA and the economy here: http://www.cato.org/publications/free-trade-bulletin/nafta-10-economic-foreign-policy-success Read more about trade and the economy here: http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age Learn more about the debate over the TPP here: https://agenda.weforum.org/2015/05/why-we-need-to-make-the-case-for-freer-trade/ Sign the petition for the TPP and freer trade here: https://agenda.weforum.org/2015/05/why-we-need-to-make-the-case-for-freer-trade/ Sign the petition for freer trade with Cuba and more free trade globally here: https://www.facebook.com/pages/End-the-Cuba-Embargo-Now/109994522362677 By: John Golden Fifteen years ago, the Economist called Africa, “The Hopeless Continent” seeing it as nearly impossible for it to ever develop. Africa In 2014, with the end date of the millennium development approaching and Africa passing all of them, the Economist published “Africa Rising” showing the incredible growth of the African continent. Today, six of the ten fastest growing economists worldwide are in Africa, and Africa as a whole is growing at an astounding rate. Africa is this century’s economic miracle story. What caused this miracle? Technology.
Mobile technology in particular has changed the way Africa does business by eliminating need for people to send messages far and away by hand, taking days or call for hours on busy signal lines. Mobile technology has eliminated countless jobs in the telecom industry in Africa and of people taking the efficient messages upstream, but it has led to amazing growth and development and helped to propel a continent forward by reducing upstart costs for businesses. The only way to develop sustainably in Africa was to cut jobs in favor of technological infrastructure and use an efficient private sector to ensure an efficient Africa. A great exemplar of the power of cutting jobs to boosting growth is Mo Ibrahim. Mo Ibrahim rose up from Sudan and became one of Africa’s first self-made billionaires when he used his technological prowess and engineering capabilities to change the course of a continent when he founded Cetel, a telecom which strived to put phone lines all over Africa and to unleash African development. Ibrahim believes that if he had stayed in Sudan, government would have stifled his innovation. He told Foreign Affairs, “It was a stifling society with government controlling all aspects of life. You could not get funding for any sort of project. There was no infrastructure to support you. And there were a lot of social pressures to just take a government job and have some babies, and that’s it.” See, when government guarantees jobs without attempting to spark real growth, there cannot be any substantial progress and countries are forced to deal with a continuing backwards state. Without a chance of unemployment, there is no major motivation to move beyond mediocrity to the level of success Mo obtained. A guaranteed government safety net of jobs nearly failed Mo in Sudan. Mo dealt with this bias for jobs without progress again when he went into new countries and markets, saying, “In other countries, where telecom was a monopoly of the government when we came in, problems originated from a lack of appreciation for the role of the private sector. You end up with a regulator who comes from the incumbent, and they perceive us as a competitor.” Incumbent institutions guarantee stability to a point but also stop any progress. By attempting to protect jobs for the telecom workers in those countries from loss at the hands of a new efficient disruptor, the telecoms in those countries almost stopped tremendous growth from Mo’s lines. When asked the role entrepreneurship should play in creating jobs, Mo said that it should play the main role and that governments are generally bloated with too many jobs, needing to cut not add as these jobs create inefficiency. While more jobs are always desired, sometimes they get in the way of efficiency for the general economy, especially when considering emerging economies. Read more about Mo Ibrahim and the full Foreign Affairs interview here: https://www.foreignaffairs.com/interviews/2014-12-15/africa-calling Read more about the technological revolution’s aid to Africa’s economy here: http://www.theatlantic.com/international/archive/2012/02/africas-amazing-rise-and-what-it-can-teach-the-world/253587/ By: Anna O'Neill It is a common thought that advancing technology negatively effects the economy by displacing human labor and leaving people out of work. What is often overlooked is the fact the displaced workers are being over paid for work that could be more efficiently done by a machine, in other words they seek economic rent. Short turn unemployment is expected with technological advances, but long term effects are questionable. Critics of technological advance on the basis that they destroy jobs claim that unemployment will be prominent even in the longer run. Contrarily, history has proven that technological advances improve standards of living and employment norms by allowing shorter hours and workweeks, as well as lessening the need for multiple bread winners per family. Technological advances work to improve the standard of living in the area they are implemented in through increased efficiency. This can be done by increasing production output. It can also be achieved by decreasing the amount of resources needed to produce the same amount of output. Since labor is one of these necessary resources for production, increase leisure time is a sign of increased standard of living, made possible by advancing technology. This leisure time allows people the opportunity to create new artwork and new inventions. In this way, unemployment works constructively and unemployment statistics cannot truly act as a diagnosis of economic well being. Read more here: http://www.cato.org/pubs/pas/pa068.html By: Anna O'Neill Many Americans are eager to support government proposals when they claim to create jobs. Voters quickly become supportive of even unnecessary projects when politicians mention job creation. What they do not realize is that the labor required to implement these projects is a cost not a benefit, and should be viewed as such. Mindlessly creating jobs does not ultimately lead to creating wealth. The general public is so focused on correcting unemployment statistics that they often forget to consider real economic progress. Enacting government programs in order to create jobs goes against the natural tendencies of the market and curtails efficiency. Instead of allowing the wage market to encourage employers to seek to reduce the number of laborers and choose to hire only the most efficient individuals in order to reduce expenses, the focus on promoting employment, instead of progress, neglects to create real wealth. When the wage market is tampered with, individuals are underemployed in the government sector for the sake of raising employment rates. When left to flourish, the market seeks to place individuals into the private sector as more productive workers. It is commonly believed that the best way to repair a broken economy is to quickly place people into jobs. This philosophy clumsily forgets that creating jobs does not necessarily bring about economic progress. A full article about the dangers of seeking wealth through unnecessary job creation can be read here. By: John Golden
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