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Long weekend reflections

April 9th, 2009

I’m going to celebrate Easter by taking a break from the computer. Feel free to chat among themselves, or to post your own thoughts at any (reasonable length). Please remember to be particularly polite and friendly in my absence.

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  1. Chris Warren
    April 19th, 2009 at 20:43 | #1

    Tony G

    The $10 was an illustration, and bears no relationship to your $7.

    The subjects were not linked.

    The purposes were not the same.

    Andy the understandings for rational folk do not include the same dollars.

    If you really want to use #93 logic to consider whether $7.50 is oppressed you have to find out what MacDonalds pay other national workers producing THE SAME UNIT OF PRODUCTION.

    #93 was not about MacDonalds.

    In any case MacDonalds is a famous oppressor. When MacDonald wages for the same production were compared across countries the results indicated that real wages for identical jobs in the US, Japan, and Western Europe were some four to five times those in Eastern Europe, Korea, or Brazil, and an order of magnitude higher than in China, India or Colombia.

    See: “Cross-Country Comparisons of Wages Rates: The Big Mac Index” Orley Ashenfelter and Stepan Jurajda, October 2001.

    Whether a particular wage rate is fair or not depends on other wages – FOR THE SAME UNIT OF PRODUCTION.

    If other global workers get $0.75, the Australian rates at $7.50 represent oppression of overseas workers.

    If other global workers get $75.00,the Australian rates at $7.50 represent oppression of Australian workers.

    You can get all the data on MacDonald’s rates from the cited paper.

    Enjoy the reading.

  2. April 19th, 2009 at 22:20 | #2

    Chris, you seem to be ignoring all other factors that determine wage rates. The obvious one is cost of living.

  3. April 19th, 2009 at 23:21 | #3

    If someone is producing the same item – the same commodity – a TV – then low wages relative to alternative producers – can only be due to oppression.

    Chris – Looking at it the other way around if somebody charges you more to produce the same thing they are ripping you off. By this logic the labourers in the rich countries are exploiting employers and consumers. Now I don’t believe this to be the case but it follows just as readily from the exploitation logic that you are promoting.

    The reality is that people in different places doing the same work get paid differently for a whole swag of reasons. Including taxes, variations in profitability due to firm structure, cost of living differences, labour supply issues, different costs of capital due to regime risk, variations in infrastructure, productivity, cultural expectations, trade offs for non monetary reward (eg job security) etc, etc.

  4. Chris Warren
    April 20th, 2009 at 09:37 | #4

    Jarrah

    There are other factors that determine wage rates.

    But I am only talking about the extent to which differences in wage rates are not due to these “other” normal comparative advantages.

    I am only looking at the additional, artificial comparative advantages introduced by deliberately oppressed working conditions and cheapened, therefore lower cost, ecological standards.

    See #52, #59 above.

    Tariffs against unfair competition, ie oppressed working conditions, can be considered.

    Tariffs based on all other normal differences between productivities and wages rates, are not needed.

    Comparing RULC’s is a useful way of getting a handle on this issue.

  5. Chris Warren
    April 20th, 2009 at 09:56 | #5

    TerjeP

    The reality is that people in different places doing the same work get paid differently for a whole swag of reasons. Including taxes, variations in profitability due to firm structure, cost of living differences, labour supply issues, different costs of capital due to regime risk, variations in infrastructure, productivity, cultural expectations, trade offs for non monetary reward (eg job security) etc, etc.

    All these things do apply. But markets will send signals to adjust firm structure, capital costs, and to move production to where there is best infrastructure.

    Other things such as taxes, culture, wages, can be artificially create new comparative advantages.

    I am only concerned about artificial comparative advantage, generated by politics.

    Indian call Centre workers should have the same working hours and OHS conditions as in Australia.

    If we try to resolve Climate Change in our economy (which increases our costs), we must protect ourselves from economies who do not.

  6. Alice
    April 20th, 2009 at 12:15 | #6

    Id really like to be paid more for doing housework actually.

    How did that effort manage to escape the market almost entirely?

    As Betty Friedan once noted

    “They were so busy – busy shopping, chauffering, using their dishwashers and dryers and electric mixers, busy gardening, waxing, polishing, helping with children’s homework, collecting for mental health and doing thousands of little chores.”

    Id like to know why the market failed to acknowledge the historical efforts of women within the household? Is not the household a unit of production and an immense source of consumption? (Yet the more we consume, the more work there is to do).

    It is quite wrong to suggest that the market will act as some force for equality in wages or that it reflects a value of costs, taxes,or working hours and all the other neat little inputs we like to attach to the value of a wage.

    Markets often deliver inequality in wages given that inequality and thus inequality in bargaining power is more the norm within markets than equality is, or ever was.

  7. April 20th, 2009 at 20:55 | #7

    Id really like to be paid more for doing housework actually.

    How did that effort manage to escape the market almost entirely?

    Housework can be sold as a service just like any other. If you want to get paid for housework then give me a call and I’ll let you know the parts of my house that need cleaning.

    However if you want me to pay you for cleaning your house then dream on. If I did that then the next thing you would want to be paid for scratching your own arse.

    When you clean your own house you get a clean house. The labour is fully rewarded. If you don’t like the wages then live with a dirty house.

    What annoys me is that if you decided to trade your floor vaccuming service for my plumbing skills then the government wants to take close to half the benefit!! Where is the community spirit in that?

  8. Bingo Bango Boingo
    April 20th, 2009 at 22:40 | #8

    I too would like to know how the market missed out on properly measuring and pricing the benefits that I receive from scratching my own arse from time to time. It’s a clear case of market failure.

    BBB

  9. Bingo Bango Boingo
    April 20th, 2009 at 23:31 | #9

    “Id like to know why the market failed to acknowledge the historical efforts of women within the household?”

    I think you’re onto something. Women’s rights can and should be reduced to a market vs. state issue. For example, in Communist Russia, the historical efforts of women within the household were acknowledged at all times. Massively so. Similarly in North Korea to this very day.

    Do you think before you type or is it mostly free-association?

    BBB

  10. April 21st, 2009 at 00:31 | #10

    My comment never appeared. Am I caught in the spam filter for some reason? It had no links.

  11. April 21st, 2009 at 00:35 | #11

    Don’t worry about digging up the previous comment. I’ll try again, but won’t be as good.

    Chris, how on earth is culture an unfair advantage??

    How is a willingness to accept a low wage evidence of unfair advantage?

    Furthermore, how is making it more difficult for a low-wage worker’s product to be sold (the tariffs you suggest) helpful to the worker? Are you actively trying to keep them from raising their standard of living?

  12. Salient Green
    April 21st, 2009 at 09:13 | #12

    Alice #106, income splitting would go a long way towards valuing the work of a house wife/husband.

    You would have to exclude the wealthy of course and to do that, some sort of dollar value would need to be applied to the job so that it can be capped. As a house husband, recognition plus a major tax saving would make me content.

  13. Chris Warren
    April 21st, 2009 at 10:16 | #13

    Jarrah

    In India they have castes, the specific oppression of whom, creates lower wages.

    In some cultures, religous requirements can increase costs.

    Nations with less holidays gain a comparative advantage.

    Sometimes in other cultures women get less pay for the same work.

    All this happens on earth.

    Ta

  14. Chris Warren
    April 21st, 2009 at 10:23 | #14

    Jarrah

    I would hope that policy can be developed to ensure that tariffs against unfair advantage do not prevent improvements in the Third World.

    Revenue from tariffs of this kind could go to the ILO or UNDP.

    Tariffs would not apply if the Third World producer sets a appropriate selling price to ensure competitive neutrality. In this case the revenue would immediately flow back to the Third World.

    It would require several layers of political commitment – which is some way off.

  15. Chris Warren
    April 21st, 2009 at 10:33 | #15

    Jarrah

    How is a willingness to accept a low wage evidence of unfair advantage?

    Obviously if the alternatives of not accepting the wage, are worse.

    This usually applies in oppressed Third world states.

    You can make Australian workers slave for peanuts if the system threatens to take their house away from them. This was covered on 4Corners on Monday, so if you did not see it, try to catch the repeat.

  16. April 21st, 2009 at 10:58 | #16

    It’s obvious that Australian wages have to be protected from competition from slave wage economies.

    What has happened in Australia since the 1970′s, namely the export of our manufacturing base to China, Vietnam, Malaysia, etc. is an object lesson in what happens when an abstract principle (i.e. ‘free trade’) is applied without regard to the circumstances of the world we live in.

    If Australia had applied those same stupid principles between the first and Second World Wars, there is no way that we could developed the industrial base that made our country sufficiently me sufficienlty self-reliant as to be able to cause the Japanese to abandon plans to invade this country even before their defeat at the Battle of the Coral Sea deter. This has been written of in Andrew Ross’s excellent and so far unchallenged “Armed and Ready – The Industrial Development and Defence of Australia 1900-1945″ of 1995 which I referred to in “The myth of the Howard Government’s defence competence” of 27 Nov 07.

  17. April 21st, 2009 at 11:07 | #17

    Chris, I never said advantages don’t exist. I’m questioning your use of the adjective ‘unfair’.

    Are you suggesting people abandon their culture to suit your conception of fairness? That’s also called cultural imperialism.

    Is the Protestant work ethic an unfair advantage?

    “Obviously if the alternatives of not accepting the wage, are worse.”

    That’s a meaningless statement. Everyone makes choices to maximise their benefit – ie all other choices are worse.

    “Tariffs would not apply if the Third World producer sets a appropriate selling price to ensure competitive neutrality.”

    Who decides? How is that measured? What about disputes?

    You still haven’t told us what ‘fair’ advantages are. I’m curious to see what criteria you use.

  18. Alice
    April 21st, 2009 at 11:28 | #18

    TerjeP

    You are a disgrace!

    Saying

    “When you clean your own house you get a clean house. The labour is fully rewarded. If you don’t like the wages then live with a dirty house.”

    The worst case of non recognition of the undervalued component of still mostly female labour (domestic labour) I have ever heard. “A clean house is the reward for cleaning it”. Outrageous Terje you old dinosaur!

    The historical contribution of women raising children (which feed into the labour force later – ie unprocessed inputs if you like…) freed time for men to go and earn money.

    If you dont see that and I would warrant a lot of men still dont then think about it. You arent delivering kids to childcare before you go to the office. You dont have to get up two hours earlier to make lunches before you go to work. You dont have to collect kids from childcare and your are not forking out for the cost of childcare if a women is on hand with domestic work.

    But work it is Terje and historically men probably benefitted and accrued most of that wage in his own, with the woman only getting the wealth portion of it when he keeled over (and if he keeled over before her).

    Worse, if he left her before he keeled over, in most cases she is much worse off and he is much better off.

    Fair market vaulation of effort be damned!

  19. Chris Warren
    April 21st, 2009 at 14:32 | #19

    Jarrah

    Fair advantages – natural endowment, training and skill, climate, cheap land, strategic geography, better production technique, innovation, democratic welfare state, size of enterprise, first-mover advantage etc etc.

  20. April 21st, 2009 at 19:21 | #20

    You arent delivering kids to childcare before you go to the office. You dont have to get up two hours earlier to make lunches before you go to work.

    More evidence that you don’t know what you are talking about.

  21. Alice
    April 21st, 2009 at 20:38 | #21

    120# Then Ok Terje. A generalisation…not specifically intended to address you. But from a historical view on average correct in this country at least until the 1970s. In the early 1950s only 23% of females earned sufficient from the labour force to pay any taxable income.

  22. Bingo Bango Boingo
    April 21st, 2009 at 21:56 | #22

    “But from a historical view on average correct in this country at least until the 1970s.”

    Funnily enough, the 70s was the period during which neoliberal ‘free-market ideology’ began its ascendancy. So the increase in recognition of women’s contribution to their own households and society more generally seems correlated with the death of social democracy as a genuine force in the development of public policy. I would think this fatal to your ham-fisted attempts to lay the blame for patriarchy at free markets. See what happens when a few random, visceral but highly socialised politically-correct thoughts are thrown together in public?

    Wait, conservatism is the same as liberalism, right?

    BBB

  23. Alice
    April 21st, 2009 at 22:07 | #23

    Bingo Bango etc says
    “I would think this fatal to your ham-fisted attempts to lay the blame for patriarchy at free markets.”

    Misinterpretation Bingo. I wasnt laying any blame for patriarchy on free markets. Patriarchy predates free market ideology, continues through free market ideology and is alive and well and living close by. Gender pay rates can easily be looked up. Barely any difference since equal pay legislation.

  24. Bingo Bango Boingo
    April 21st, 2009 at 23:15 | #24

    Can I ask then what is the actual point of the following:

    “I’d like to know why the market failed to acknowledge the historical efforts of women within the household? Is not the household a unit of production and an immense source of consumption? (Yet the more we consume, the more work there is to do).”

    If patriarchy is independent of the existence or extent of markets (I would take some issue with that; neoliberalism tends to break down the conservative social relationships that nourish patriarchy), then why should markets acknowledge unpaid housework, anymore than they acknowledge the other things human beings do for themselves rather than make the subject of inter-household trade (a very long list I think you’ll agree, many items of which would be work historically performed exclusively by men: “Why oh why doesn’t the market acknowledge my contributions to lawn-mowing.”, etc.). What is your actual argument? I rather suspect there is no argument, just a complaint about gender relations (not unjustified) and (I’ll say this again) a ham-fisted attempt to implicate markets as a contributing factor to the circumstances the subject of the complaint.

    It’s a little like a roll-call of leftist though bubbles: Gender relations complaint? Tick! Anti-market? Tick! Logic? You what?

    BBB

  25. Bingo Bango Boingo
    April 21st, 2009 at 23:24 | #25

    Actually Alice, my comments/queries have been unnecessarily snarky, so please accept my apologies. But I really do want know what precisely your point is. Your comments on this point seem opportunistic, to say the least.

    BBB

  26. Joseph Clark
    April 22nd, 2009 at 00:38 | #26

    Alice,
    Pay rates are not sufficient evidence for gender discrimination. There are a lot of alternative (and much more plausible) explanations. My favorite: employers are a little less likely to employ women given the possibility of litigation under anti-discrimination legislation. Most sensible: many women like having babies so stay out of the workforce for a long time and don’t seek promotion to highly stressful and time-consuming roles.

    Wait a minute! Why aren’t they being paid for all that baby rearing? Damn market!

  27. April 22nd, 2009 at 04:10 | #27

    Actually Alice, my comments/queries have been unnecessarily snarky, so please accept my apologies.

    He says to the grand queen of perpetual snark.

  28. Alice
    April 23rd, 2009 at 12:16 | #28

    127# Terje
    From the Sun King of snark to the Grand Queen – Ill take that as a compliment Terje and try to reign myself longer (oops I mean in). LOL.

  29. Alice
    April 23rd, 2009 at 12:40 | #29

    Bingo

    If you choose to believe that markets didnt fail women (not at all in history, not in pay rates, not in discrimination, not in career advancement, not in glass ceilings, not in university ivory towers, not on executive board composition, not in political party composition, not in wealth or income or savings) then it is you who lives in a bubble. It wasnt only markets who failed women Bingo. It was also social and public institutions and it was also deliberate exclusion by men. Just like your overuse of the expression “ham-fisted” which is rather inelegant to say the least I too find your right wing cocoon of denialism more than ham-fisted.

    As for your comment

    “neoliberalism tends to break down the conservative social relationships that nourish patriarchy…”

    Sorry Bingo – but that comment really takes the cake. Where is the evidence for that? Logic? None – just a pronouncement without a trial and without any evidence whatsoever. “I think therefore I know”.

  30. April 23rd, 2009 at 13:40 | #30

    “Where is the evidence for that? Logic?”

    The logic is that liberalism promotes cultural difference and dynamism, which are anathema to conservative social relationships. The evidence is all around you.

  31. April 23rd, 2009 at 13:40 | #31

    “just a pronouncement without a trial and without any evidence whatsoever.”

    *cough*kettleblacketc*cough*

  32. Chris Warren
    April 23rd, 2009 at 14:52 | #32

    Jarrah

    Liberalism by itself does not exist but only in a society.

    In Australia, Liberals such as Menzies exploited cultural differences and Australia was stuck in old fashioned views without any dynamism.

    The Liberal Fraser also damaged cultural dynamism compared to the achievements of Whitlam in this area.

    The Liberal Howard was not a supporter of liberalism, as others may understand this term.

    But I tend to agree with you, provided the liberalism you seek is not Liberal Party stuff and provided that liberalism for some is not funded by or based on oppression and exploitation of others.

  33. Alice
    April 23rd, 2009 at 17:07 | #33

    Chris#132 on Jarrah’s comment 130

    “But I tend to agree with you, provided the liberalism you seek is not Liberal Party stuff and provided that liberalism for some is not funded by or based on oppression and exploitation of others.”

    Chris, In suspect we both know the answer to that one. Wasnt it Howard that went for sedition laws and attempted to censor research in universities and silence the ABC and locked up refugees in inhumane conditions? Is that included the “liberalist tradition” or is it just liberal when it suits some?

  34. April 24th, 2009 at 15:53 | #34

    Chris, of course liberal and Liberal are very different things.

    As I see it, liberalism brings both economic and cultural dynamism. The Left don’t like the former, and the Right don’t like the latter. Libertarians like both.

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