Blog Archives

The Government’s Latest Assault on Workers

The government never grows tired of making people’s lives harder than they otherwise need to be, and if the every day struggles of paying the bills and putting food on the table weren’t hard enough, the government, through the wisdom of our enlightened bureaucrats decides that life must be harder on all of us. You would think people would get tired of this, eventually. You would think that workers would eventually rise up in revolution against these malicious attacks, but they cheer it on.

What is this latest assault on workers that I speak of? I’m speaking of course with regards to the government’s recent crackdown on companies hiring illegal immigrants. According to the Wall Street Journal (9/13/13) under the heading, “New Hunt for Illegal Workers”:

The U.S. government has launched a fresh crackdown on employers suspected of hiring illegal immigrants by notifying about 1,000 business across the country in recent weeks they must submit documents for audits. The so-called “silent raids” are the largest since July 2009, according to immigration attorneys, and weren’t publically disclosed by Immigration and Customs Enforcement, the agency that conducts such inspections.”

In other words, the government is going to force no less than 1,000 different businesses across the country, businesses that are working peaceably and are producing goods/services of value, to go through the pain (and expense) of preparing special documents for audits, in order to target a given group of workers who are doing absolutely nothing wrong.

Those who are more emotional are quick to scream in response, “THEY’RE ILLEGAL!!”, illegal by what standard? “They didn’t go through the immigration process!!” Good for them. The immigration process is, in fact, nothing more than useless paperwork. It proves nothing, it contributes to nothing. It is nothing more than an added cost that the public must pay for, and the cost comes in more than just the cost of paying bureaucrats to process all the paperwork. As Ludwig von Mises keenly pointed out, “There cannot be the slightest doubt that migration barriers diminish the productivity of human labor.”

The reason this is so is obvious; migration barriers hamper the division of labor by diminishing the capacity for labor to go from one area to another.

Thanks to our campaign of Nationalism, so-called “illegal” immigrants are denounced as lazy asshats with a bloated sense of self-entitlement, who pollute our communities with drugs, and rob/kill the otherwise natural citizens. This characterization of undocumented workers is entirely unjustified, and has no factual basis for it in the least, but that won’t stop the die-hard Nationalists from believing in it. Many people denounce this as racist, but this isn’t racist in the least; denouncing all Mexicans as the above would be racist, but you can plainly see that isn’t what’s happening here.

To make matters worse, the die-hard Nationalists consistently try to use economics to justify this nonsense. They try to saw for instance that “illegal” immigrants are taking our jobs. A quick glance at the immigration and job situation thoroughly discredits this idea.

They try to say that “illegal” immigrants are expensive to the tax payer because the tax payer has to bear the costs of healthcare, education, and other benefits that I… just don’t feel like listing. This statement on its own is fair enough, but in reality they are no more expensive that the other people being covered. If the government wasn’t offering these free services in the first place, would the undocumented still be expensive to the tax payer? Of course not, because then the individual would then be paying for his own healthcare, education, etc.. If anything, the undocumented are really doing you a favor; they are highlighting the absurdity of offering these free programs in the first place.

They try to say that “illegals” are bringing in diseases that we had previously wiped out or just weren’t here to begin with. They say that this is so because “illegal” immigrants don’t go through the health screening that “legal” immigrants go through. To thoroughly discredit this idea, you need only ask yourself, “How do you collect evidence for this claim when “illegals” rarely go to hospitals and are rarely caught by the government?” For more information on this, click here to be taken to a page hopelessly destroying the Nationalist (or Nativist if you prefer) myths on immigration.

I just can’t help but wonder when the people at large are going to get sick and tired of the constant lying, the slandering, the pandering to emotions, etc., etc.. For what immigration is supposed to look like, I refer you to some of the finer work that Milton Friedman has done.


Political Inconsistency/Cultish Behavior

You know, for some people economics is this mathematical science that allows people to predict the state of the future economy. For others, economics is the “dismal science”, i.e., a pseudo-scientific philosophy which rarely (if ever) tells us anything about the real world or makes accurate predictions. For myself, I can fully understand the latter group’s frustration with economics. How many economists told us, for instance, back in 2005-2007 that the economy was doing great, it was going to go even higher, etc.. And bear in mind that all of these economists had very sophisticated equations and models to back their arguments.

To me, economics isn’t a series of math equations or econometric models that predict the future. To me, the science of Economics is observation; it is acknowledging that humans act, i.e., utilize means to achieve pre-determined ends, and deducing from this the most logical conclusions that the actions themselves imply. Once you take and apply this method, you will understand precisely why the empirical/mathematical methodology utterly fails its purpose within the science of economics, but we will save the finer points of that conclusion for later. For right now, however, it is necessary that we take a few cases of complete hypocrisy regarding certain political issues that, at first glance, have nothing to do with each other. We will deal with two issues at the end in which the connection will be painfully obvious.

Rent Control/Minimum Wage:

These two issues, to the untrained eye, have next to nothing in common. Rent control is an act by which the amount of rent that can be charged by a landlord is capped, while Minimum Wage is an act by which employers are forced to pay their employees no lower than a given amount. Proponents of the Minimum Wage will argue fiercely that we need Minimum Wage regulations in order to enforce a “Livable Wage”, to keep the big guys from exploiting the little guys as “Slave Labor.”

Rent Control, however, has little to no supporters. Hardly anyone supports the idea of Rent Control. In fact, in 2011 when Jimmy McMillan, the RENT IS TOO DAMN HIGH guy, got evicted from his rent-controlled apartment, The Young Turks ran a segment on it. Cenk Uygur, who everyone knows is my FAVORITE news personality *sarcasm*, had this to say regarding Rent Control.

Quote from Cenk Uygur: “Now, it’s interesting because I actually think that Rent Control is not the right policy, and I think it’s created a lot of weird consequences because of it in New York; people holding onto apartments forever and doing all these shenanigans to pass it to people they know, yada yada yada.

 Of course, Cenk’s analysis doesn’t even cover a fraction of the problems regarding Rent Control, but this has nothing to do with what Rent Control and Minimum Wage regulations have in common at their core (besides being regulations, of course). The truth is, they are both price controls. Rent Control is a downwards control on Rent, Minimum Wage is an upwards control on wages. Price controls, ultimately, have the same effect no matter where in the economy they’re applied, i.e., Demand exceeds Supply and you have shortages as a result. In the case of Rent Control, it destroys existing housing, in the case of Minimum Wage, you doom a portion of the labor force to be unemployed indefinitely. But notice, Cenk Uygur is a fervent supporter of the Minimum Wage, but he opposes Rent Control as not being the right policy even though they are both, at their core, the exact same principle applied in two different directions.


Immigration/New Technology:

Ok, now this one is a head-scratcher. How can immigration possibly have anything to do with New Technology? How can someone be a hypocrite by supporting one but not the other?

The answer is simpler than it first appears. One needs only to consider what the ultimate effects of Immigration and New Technology are to see what they have in common. Immigration is that process by which people from foreign lands migrate from their home country in order to set up residence in another country. The effect this has on National Labor is immediately seen; the native laborers must compete with the laborers from the foreign lands for employment, thus driving down wages. The Protectionist exclaims that this is horrible; immigration should be restricted in order to protect National Labor against foreign competition. Why? Because Foreign Labor is willing to work for less than Native Labor. This competition creates unemployment for the Native Laborers, which puts us, ultimately, in a state of dependency on Foreign Labor and Foreign Investment.

New Technology, or Labor-Saving Devices if you prefer, is almost universally embraced (with a few notable exceptions). This wasn’t always the case, however. It used to be that new technology was frowned on. It was seen as the rich finding a way to squeeze the poor by laying them off and keeping the excess profits all to himself. it used to be argued, for instance, that if a machine were invented that would do the work of two workers as opposed to one, the employer would fire one of the two employees (the other would run the machine), and as a result, his income would be absent from circulation and the economy as a whole would suffer for it. Like I said, however, hardly anyone holds this position anymore.

What Immigration and New Technology both have in common is the means by which they operate in the market, and their ultimate effects. New Technology must, initially, compete with existing labor for the right to be used in place of the existing labor. If the New Technology is proven to be effective at the purpose for which it was designed, it begins putting pre-existing labor out of work, and while New Technology does create unemployment in the short-term, in the long-term however we are all better off for it.

Immigration has the same immediate competitive effects. The cheaper Foreign Labor, if it is effective, will put Native Workers out of work. The short-term result in both Immigration and New Technology regarding competition is the same. Ah, but the protectionist would be quick to intervene, “Your proposition is incredibly misleading! Sure, I cannot deny everything you’ve said thus far regarding the effects of Immigration and New Technology as you’ve said it, but you’re forgetting that New Technology doesn’t increase the population by one per new worker! New Technology doesn’t create new burdens on the tax-payer for school/emergency room fees!” I’m sorry to break this to Mr. Protectionist, but New Technology does in fact increase the population, just not in the immediate.

Immigration gives you in the short-run, regarding population increases, that you would’ve had with the New Technology. As the means of production become more efficient, we get greater returns for our labor, most notably in agriculture. More food = more energy for people to make babies. More energy for people to make babies = increase in the population. New Technology and Immigration, therefore, have the exact same long-term effects. It is therefore utter hypocrisy to oppose one on the basis that it creates unemployment, but defend from the other just such a criticism when they both have, in the long-run, the exact same effects.

The War on Drugs/Gun Control:

This is the one I mentioned earlier who’s connection is glaringly obvious. The War on Drugs is considered by many (including myself) to be a colossal failure; a government boondoggle in which billions of dollars has been wasted by housing otherwise harmless people in government-funding prisons, and is responsible for the rise of violent cartels (most notably in Mexico). The case for criminalization runs from “it’s harmful for you and society” to “you can’t be trusted with it”.

Remind me, along what lines does Gun Control go again? Oh yeah… “It’s harmful for you and society” to “you can’t be trusted with it.” The War on Drugs fails for the precise reason that if enough people want an illegal product, there will be a Black Market for said product. Just as in drugs, so too in guns. The same economic principles are at play in both cases, but notice one is being picked in favor of the other, even though the long-term effect of both policies is exactly the same. Once again, it is sheer hypocrisy to favor one over the other.


The reason these people are contradicting themselves to such an extent is precisely because of their methodology; namely, the mathematical/empirical/statistical/positivistic methodology. The core problem with this doctrine, in my opinion, is the fact that in its line of reasoning, there isn’t any room for any sort of absolute truths. You have a hypothesis, you test the hypothesis, if your hypothesis comes through, you provisionally accept it. But even if your hypothesis comes through, this line of reasoning forces you to remember; it’s just a hypothesis and it could be overturned by the next experiment. As a result of this emphasizing what is seen, what is unseen is completely neglected, and if you point this out, they simply blast you for being “un-scientific”.

This sort of behavior, and line of reasoning, cannot be classified as anything but Cultish.

Debunking More Republican Protectionist Nonsense

Proponents of protectionist fallacies are never short of sophisticated arguments (sophistry) to support their agendas; they will invoke everything from patriotism to economics, and will even appeal to your emotions by throwing pity-parties for the domestic shopkeepers and laborers that are put out of business due to the "unfair” competition from foreigners.

To their appeals to patriotism I say, “When did America become a nation of whiny little bitches!?”

To their throwing pity-parties for domestic shopkeepers and laborers, I call it what it is; a fallacious appeal to emotion meant to shut down any argument against the protectionist agenda.

But to their appeals to the economic aspects of the problem, I’m afraid a more in-depth analysis is called for, especially in the case of “dumping”. Dumping describes a process by which an exporter of a product will “dump” his product onto a foreign market by selling it (or just giving it away freely) below cost of production. The theory is that by doing this, the foreign market will put the domestic suppliers for that product out of business. Then, when there are no more domestic suppliers of that product, the foreign suppliers raise their prices in order to recoup what they lost by dumping, and as a result, domestic consumers suffer while foreign producers profit by our expense.

For example, suppose it costs a Chinese manufacturer of computer chips $1,000 to create that chip. Dumping theory would have it that the Chinese supplier will then sell those chips to an American importer in bulk for what amounts to $100 per chip. Then, when the domestic supplier of those chips are put out of business, the Chinese supplier will boost the price of those chips from $100 to $2,500.

There is one problem here that should immediately jump out at you, even if you’ve never had any sort of training in economics; if you were the owner of a company that made computer chips and it costs $1,000 to make one chip, can you seriously see yourself selling that chip in bulk to anyone at $100 per chip?  There is an obvious incentive right here to not try to engage in this sort of thing. Ah, but the protectionist will be quick to answer, “No, normally this would bankrupt you, but the Chinese government subsidies it’s exports, so these companies can maintain the loss for long periods of time.”

But even so, this doesn’t guarantee that domestic suppliers will be put out of business. True, there is a huge economic incentive to buy Chinese instead of American in the above example, but there are many people who’ll buy American no matter what. Even today in the real world, there are people who refuse to buy foreign-made cars and will go out of their way to buy American over Japanese for instance.

But, let’s entertain this thought for a moment that this foreign subsidizing of exports will put American suppliers out of business, and that they the foreign supplier will indeed raise his price well above. What this means is that foreign competitors will sharply undercut him. In our example of the Chinese Manufacturer of computer chips, if he indeed raises his price to $2,500, he will be undercut by a Japanese Manufacturer who’ll be competing for the American consumer. He will offer the same chip for $1,500 – $2,000, which puts downwards pressure on the price of Chinese computer chips, and this says nothing about the other countries that are in the computer chip business.

There are two other variables here that must be considered. First, there is the possibility that America might return to the computer chip business. If that is the case, the Chinese Manufacturer now has even more downwards pressure put on the price of his product.

The second variable here (and the one that is most likely to happen in my opinion) is that when the Chinese Manufacturer is dumping the chips in bulk at $100 per chip, American importers are most likely to buy as many of them as possible because they know the price of those chips are eventually going to go through the roof. This way, when the price does go through the roof, American importers of those chips have enough of them to not have to import any more of them. This throws a monkey wrench into the plans of the Chinese manufacturer who planned on profiting at the expense of Americans, and it completely destroys the dumping argument put forth by Protectionists.