Economics in a job interview

thedo — Wed, 10 Sep 2008 20:58:00 GMT

My month-plus-long search for job stability turned onto the final 100m today. For over the past month I have been seeking a full-time position. Finding nothing, I turned to temporary work at a local staffing agency and easily found temp. work. The work wasn't hard and I made enough to pay for the necessary bills. I learned just how capable the market is in employing people and putting food on peoples' tables—so long as they are willing to "swallow their pride" and do work that isn't ideal. Humorously enough, I've been part of the poorest demographic, students, and accumulated thousands of dollars of debt chasing after that noble ideal of higher education, yet I never considered myself poor until I graduated and had to "manage by." As a result, and at the same time I read a financially awakening book by Dave Ramsey called "The Total Money Makeover," I learned the value of a budget and not spending beyond my means. It is just like if you want to get fit: You don't eat more calories (spend more money) than you expend (make).

But as I said, I'm running down the final 100m now after interviewing with Almon, Inc., the technical documentation contractor of John Deere, and receiving a full-time job offer. My interview today was the most interesting and pleasing interviews I've ever had. The reason was due to simply talking with the people I'd be working under and with and listening to their job anecdotes and how they showed economic truths.

Anecdote 1: John Deere is having to shut down an operation in Canada and relocate to Mexico. The reason? The oft-maligned "cheaper wages." But the full story I was told, that Canadian labor laws forced Deere to pay its employees the same as the automotive industry, upheld the basic fact that labor unions exclude possible employment, raise wages, and that minimum wage laws, in general, increase unemployment. Deere would've like to have kept its plant and employed many Canadians, and many Canadians would've surely enjoyed employment at Deere. However, because Deere could not afford to pay its employees such a high price at that location they had to relocate, increasing the number of unemployed Canadians who must now begin the arduous task of job searching again as I did.

Anecdote 2: Almon, Inc. has not grown considerably in size over the past decade but is achieving much higher productivity than simply 10 years ago. This story illustrates the true economic path to progress: capital reinvestment. Almon, Inc. did not become more productive because it highered more people and raised wages. It did so by reinvesting its capital, which later allowed the company to higher more people and raise wages because it could afford to do so. This is an economic point few understand, especially those who would say that companies becoming so rich should first raise wages, higher more people, or be taxed more. This is fundamentally unsound. A business cannot redirect its capital investment to wage raises or increased employment without first reinvesting capital to cover its costs. The same goes for taxes: the more a business is taxed, the less it has to reinvest for capital, which means, in turn, it'll have even less for raising wages and hiring new employees.

After reading authors of the "Austrian" school of economics such as Henry Hazlitt and Ludwig von Mises, it has been refreshing to see their economic theories proven by real-life examples. It was refreshing to know, no, the government doesn't need to "create jobs" for people to be employed, nor does the government need minimum wage laws to provide people with a "just wage," nor does it need to tax and implore businesses to "share the wealth."

So I know, even more, that I cannot believe a word Barack Obama or John McCain say about leading the American economy back on course because they both believe in job creation, which only removes more business from the private sector and increases taxes (because more people on the government payroll means more people will have to pay their wages). They both believe in minimum wage laws and labor unions. And they both believe in taxes, for sure, but also taxing businesses and the rich. These men, and their parties, are not different.

The real world demonstrates that the three aforementioned areas do not need government intervention. The real world demonstrates the two aforementioned presidential candidates are not needed.

Notes from my classes

thedo — Wed, 13 Feb 2008 06:40:00 GMT

Within my study of technical communication I rarely encounter economic and philosophic ideas. But every once in a while some come along, especially because the current topic in my lone rhetoric class is laissez faire capitalism. So here are a few I encountered today.

Copyright laws, or intellectual property laws in general, are necessary for people to profit from their labor.
In my print production processes class a discussion on copyright laws and legal protection with regard to the use of typefaces and fonts was raised. There were druthers raised not so much about the validity of such laws but actual enforcement (as I raised the question asking how prevalent court cases involving type fonts were). The conversation dwindled off with a shrug-of-the-shoulders comment from one woman after sort of questioning the need for type front copyrights, saying, "I guess I'd want to be compensated if I created a type face."

This is an issue I've encountered often recently in my debates against intellectual property: People are afraid creators, inventors, et cetera. won't be given their just payment for their work if there aren't laws to enforce the protection of their created works. My first response to this concern would be related to something I read out of The Quotable Mises last night; and Mises states, "The buyers do not pay for the toil and trouble the worker took nor for the length of time he spent in working. They pay for the products." Precisely: When people exchange money for a good they are not paying the wages of the worker who produced their purchased good; they are exchanging money, quite a matter of fact, for the good. The wage of the worker — that is, the money exchanged for the worker's service — occurs similarly. When a worker is paid, his employer exchanges money for a good just as the consumer exchanges money for a product. It just so happens that in the employer's case he is exchanging money for the service of the worker. And the worker? He is exchanging his labor — manifested in the products he produces for the consumer — for payment, money: a wage.

No compulsion of law enforces this transaction. Nay, it is the perceived mutual benefit of all parties involved that brings about the worker, the creator, the inventor's payment. If someone creates a type font he will be compensated because a) he was paid to create a novel type front or b) he already created a novel type font and someone values the permission of the type front's creator over a certain sum of payment — i.e., licensing of the type font. Cooperation, not compulsion, brings about compensation; intellectual property laws are a form of compulsion.
The amount of wealth one accrues is proportional to the amount of work one undertakes.
This theme recurs everyday in my rhetoric class over our current subject of capitalism. We are reading selected works by men such as Horatio Alger, Andrew Carnegie, William H. Councill: all of whom profess their undying admiration for man's mortal toil to accumulate as much wealth as possible. Thus, by their mere inclusion, and exclusion of any other competing idea as the de facto view of what capitalism involves, the argument presented to my class equates capitalism with excessive wealth for excessive toil — that any shortcoming or poverty of life is owed to each man's fault and inability to work greatly. These are more lifestyle pontifications by these men and not economic treatises. The fundamental fact that capitalism is an economic system, whereby the means of production are privately owned and goods are massively produced, is conveniently ignored. Instead the focus is on the view that capitalism involves cutthroat competition where any man can act as he wishes and profits how he likes, even at the expense of others. The respect for private property rights is, as well, conveniently ignored.

That this economic fact of capitalism is overlooked might have been enough for me to shake my head at, if only the other economic idea — that a man's wealth is proportional to his toil — weren't so prevalent. This myopic view smacks me of a biased capitalist view, which is that the fundamentals of laissez faire economics are derived from Adam Smith; namely, the value theory of labor, which is to say that the value of a product is contained in how much labor produced it, and, as I stated above, to believe this is to err. The topic of any other school of laissez faire economics never enters the picture. My class is left to believe that it is equated with the labor theory of value, which is in error. This glaring truism should smack it down forthright; that is, many men have profitted greatly with little effort at all simply by understanding the wants of consumers and satisfying a market demand. A laborer will accumulate wealth insofar as he is able to satisfy the masses, which is to say a laborer's value is as great as the subjective valuation of the many for what he offers them.
The absence of government assumes the benevolence of man.
I've also encountered this recently in debates over the unnecessary evil that is government.This belief briefly revealed itself in my rhetoric class today as well. A short discussion ensued over an editor's footnote in our book as to the definition of socialism and anarchism as understood in the 19th century (as the period of capitalism studied is of the same time). My professor's definition of anarchism was simply socialism without government and people would simply get along, and the class was left to believe a) that this is, still, the only definition of anarchism (with no regard for anarcho-capitalism, which she probably has no knowledge of), and b) that humans are all good and, left to themselves, will treat each other fairly. As a scoff from the back of the room revealed, this notion is absurd: Men are not all benevolent and will do harm to others. And this leaves out any idea that a social system existing without government is capable of handling the problem of bad men infringing upon good men. Again, by the basis of exclusion, uninformed students are left to assume certain untenable "truths."
Employers "rob" their employees by paying them a low wage.
This belief briefly presented itself when I prompted my professor to elaborate on an editor's footnote that described Cornelius Vanderbilt as a railroad baron. I asked her what was meant by "railroad baron," as the footnote simply made a claim about this man without backing it up with any biography or history of the man. My professor proceeded to tell me how this was a negative term and was used to characterize people who "robbed" their employees; that is, the employers paid their employees an unjustified low wage. What a justified wage is she did not explain, nor did she explain why these employees would accept "being robbed," if they were. Again, exclusion is the rule by which "truth" is formed.

And so it is: Disinformation, misinformation, and absence of information are still alive and well in universities, and the lack of critical thinking, even in a rhetoric class that is supposedly designed to facilitate critical, argumentative thinking, persists and passes for "education." But so long as we are schooled, isn't that OK?

Apropos Austrian Aphorisms : ludwig von mises

Economics in a job interview

Notes from my classes