Jerry in his post relating to the minimum wage would seem to be advocating for fascism.

So for example, to go from the current $7.25 to the $9.25 (or $8.25 or $10.50), the law should lay out a specific time, in which there will be small, but steady raises in the minimum wage. So to go from $7.25 to $9.25, the law will require the minimum wage to rise – let’s say 25 cents (I don’t know what figure would be ideal….but 25 cents seems rational) – every 6 months. Employers will still be forced to pay more for minimum wage workers, but they will be ready for the changes as the effect won’t be as sudden and it will give them time to adjust to the higher costs.

The use of the law here is misguided. The law is to protect natural law rights, fundamental rights. What right is there to be paid a legally mandated minimum wage? None. It is in addition a violation of economic law. It creates unemployment.

Further, when the law is employed by the state in such a fashion, it has a name. That name is fascism.

The reality of bureaucratic administration has been with us at least since the New Deal, which was modeled on the planning bureaucracy that lived in World War I. The planned economy — whether in Mussolini’s time or ours — requires bureaucracy. Bureaucracy is the heart, lungs, and veins of the planning state. And yet to regulate an economy as thoroughly as this one is today is to kill prosperity with a billion tiny cuts.

Jerry has a plan, should plan ‘a’ fail.

And to minimize adverse long-term policy if they do fail, a law should be written for the reversal of the minimum wage hike/decrease if X, Y, & Z are not successfully accomplished within a specific time. Now I’m making it very simple but of course great detailed work would (should?) go into figuring out the parameters, requisites and goals. We don’t want to be stuck with a law that might be hurting us. Basically, we want a “reset” button if it fails.

How exactly should this “detailed work” be undertaken? The two approaches will provide very different conclusions. Empiricism will provide some sort of model. Rationalism, the a priori, will demonstrate the error of the undertaking.

One other thing that gets lost in the minimum wage debate is that different parts of the United States might have different effects. The US is huge. Even some states are huge and can differ a lot in different regions. That’s why I don’t think cross-country comparisons are that wise when it comes to minimum wage laws because labor markets, cultures, fiscal/monetary policies, and just plain luck can produce different results in different places.

Of course the conditions are different. Of course conditions will change continuously, thus any static law is guaranteed to fail.

So maybe we might want to adopt different types of laws in different places in different fashions. Maybe in California, raising the minimum wage would have net positive results, while raising it in Texas would have net negative results. Or getting rid of the minimum wage would have net positive results in Texas while net negative in California. I don’t know. I’m just saying this is something we must consider.

Why not abandon positivist law entirely and allow ‘economic laws’, viz the free unfettered market to allow adaptation to the variable conditions of exchange?

You want to raise wages? Then you need to raise employment through production. How do you manage that? Employment is a function of Discounted Marginal Value Product [DMVP]. DMVP is raised through the addition of new capital that raises production, making each individual worker more productive, thus raising his individual DMVP. A higher DMVP results in higher wages.

Of course this is the question that the Federal Reserve would love the answer to…hence their perseverance with QE and other credit expansion policies, even though after five years and counting, they have failed.

New capital is invested by entrepreneurs from savings and/or increased debt, which are the savings of others, although in a fiat money economy this is less the case where fractional reserve lending can create new money ex nihilo.

Those savings or incurred debt are invested in new capital to produce goods and services. The savings, excluding ex nihilo money creation, originate in earnings, gained from exchanging goods and services on the market economy.

Why then does ex nihilo credit expansion fail? Because an artificial interest rate set by ‘law’ cannot overcome market forces and the natural rate of interest which governs the investment of capital. In exactly the same way would a minimum wage set by law [which of course it already is] fails. Simply look at the current unemployment.