Modern Economics

[there buster]

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I would not agree with the idea that doctors take more than they deserve.

The question is, "Who gets to decide what doctors (or anyone else) deserves? And on what basis? And after their pay is adusted to 'what they deserve,' will there still be an adequate supply of good doctors?"

The problem for all such planning is that supply and demand will win out in the end.

A free market is just an information system. If we reduce the pay of doctors, that sends a signal of reduced demand.But if that is a false signal a secondary market of some sort will arise to meet the actual demand. If we prohibit the secondary market, it simply goes underground and becomes a black market, with higher risks and higher prices.

[bevin]

I agree. This is why I think the current barriers to a free market for doctors need to be eliminated.

The obvious barriers are in the legal system, specifically in the malpractise situation and in the coverage situation.

Malpractise: You would like to be able to have simple ailments dealt with by someone who is qualified to either recognize and treat them, or to recognize that they need to go to the next level of care. Right now the liability risk on such a person is too high, so the patient gets to see a doctor when they really did not need to.

Coverage: Far too many patients treat the ER as their first port of call. Especially patients without any coverage. An ER is to expensive to be used as a drunk tank, as a place to have a bandage changed, a tick removed, or a healthy baby checked.

Same for 911 ambulances! This weekend I was sent to a fully conscious, alert, happy individual whose sole complaint was that they had been drinking from a glass of water and a mouthful went down the wrong way!

This behaviour is all a direct result of the US legal system - which is not creating a free market in medicine.

/Bevin

[D. Allan]

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The question is, "Who gets to decide what doctors (or anyone else) deserves? And on what basis? And after their pay is adusted to 'what they deserve,' will there still be an adequate supply of good doctors?"

Everyone deserves equal remuneration no matter what line of work they are involved in. If all are provided a free education, cost of education is no justification for deserving more money when they begin to work. And time spent being educated is no justification for it either if all students are paid for their time going to school. After school if all are paid equally there is no motivation to enter a line of work merely because it pays more than other jobs. They all pay the same. So people would study for and then work in a field that they really loved.

Is it just a utopian dream?

I've no idea what it would do to supply and demand. Some altruistic souls would no doubt study for careers where more people were needed.

Maybe it is an ideal to be worked toward gradually. First the miminum wage could be more reasonable. Say $12.00 to $15.00 per hr. Public education could be extended another 4 yrs. After begining work scholarships and grants could put qualified people in a master or doctorate program. And so on.

[D. Allan]

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This behaviour is all a direct result of the US legal system - which is not creating a free market in medicine.

The insurance industry doesn't help either for a free market in medical care. Either everybody should have medical coverage or nobody should have it. Those who have it drive up the costs for those who do not have it.

[Dr. Shane]

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Everyone deserves equal remuneration no matter what line of work they are involved in.

Will all in heaven have the same number of stars on their crowns? Or will they be rewarded according to their works? (Rev. 22:12)

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First the minimum wage could be more reasonable. Say $12.00 to $15.00 per hr.

Why not make minimum wage $20,000/hour?

Minimum wage drives the cost of basic services. When minimum wage is raised all the companies that pay minimum wage must raise the cost of their goods and services. These include restaurants and retail stores. So that means the price of prepared food and groceries increases and not just for those wicked, evil, take-more-than-they-deserve rich people. The poor people earning minimum wage have to pay more too. Thus the amount of goods and services they use to be able to buy with their salary of $5.15/hour they can now buy with their salary of $20,000/hour. They are still on the bottom end of the income scale. No matter how much we raise minimum wage, it will always remain on the bottom end of the scale.

[Bravus]

True but only part of the story, since wages are only part of what causes prices to go up. So what has been happening over the past couple of decades is that prices, particularly for housing, have been going up, but minimum wages have been kept stagnant by arguments like the ones you made above. That means that in real, purchasing-power terms, wages have been falling (and this is true for the working and middle classes as well). So rises to the minimum wage that just track inflation are likely to have a minimal effect on prices across the whole economy (since a relatively small proportion of people are on the minimum wage) but a large effect on the standard of living of those people.

And 20 million dollar salary and bonus packages for executives also effect prices, but I tend not to see my friends on the right arguing for restraint there very often.

[D. Allan]

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Will all in heaven have the same number of stars on their crowns? Or will they be rewarded according to their works? (Rev. 22:12)

Jesus was even more radical than I! Remember the parable about the workers - some came in the morning early. Some came later. Some came an hour before quitting time. They were all paid the same wages - for the entire day. Such is the kingdom of heaven he said! I'm merely saying that each worker should be paid the same rate for the hours worked. In that case it makes no difference wheather everyone is paid 50 cents/hr. or $20,000/hr. The effect is absoultly the same.

So why not move in that direction slowly, by first making the minimum wage fairer. Later we can talk about a maximum wage. Gradually we can squeeze the two towards each other.

Earlier in our countries history many no doubt felt that to do away with slavery would ruin the economics of their day too! A minmum wage at today's rate is nothing less than a type of slavery. It is only fair to pay people for the work they do.

[Dr. Shane]

I agree that minimum wage should increase every 5 years or so to keep up with the rate of inflation. However if it goes up too fast - like from $5.15 to $10 - it will most diffinately cause inflation.

In the US, minimum wage is like a political football. The Democrats want to own it and are resentful anytime it looks like the ball might get passed to the Republicans. Numerous times over the past years Democrats have prevented Republicans from raising the minimum wage. The Democrats claimed it was because the Republicans were not going to raise it enough but really... good politics is all about compromise. The Democrats just didn't want the Republicans to get any credit for raising minimum wage.

The Republicans have however raised the Earned Income Tax Credit substantially on a number of occasions. That actually gives the working poor a few thousand dollars extra at the end of the year when they do their income tax returns.

[Dr. Shane]

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Jesus was even more radical than I!

This parable is about class envy. The ones that worked all day for the one talent can be compared to the janitors that work hard for their little bit of money. The ones that worked only an hour for their one talent can be compared to the doctor that gets paid a day's wages for only an hour's work. Jesus was teaching the janitor not to be envious of the doctor.

[bevin]

Jesus also said that the labourer is worthy of his hire.

There are some jobs that only a small section of the populace can do, which require years of commitment to learn, which require a lot of the practioners time and energy when not actually "front and center" in the workplace, and which someone really wants done. We have to pay these practioners more so they will continue to exist.

/Bevin

[there buster]

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Remember the parable about the workers - some came in the morning early. Some came later. Some came an hour before quitting time. They were all paid the same wages - for the entire day. Such is the kingdom of heaven he said! I'm merely saying that each worker should be paid the same rate for the hours worked.

But the parable you cited is exactly the opposite. The workers are paid radically different wages, when divided by the hours worked. And the point of the parable is that "If you got what you agreed to, it makes no difference what others get."

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A minmum wage at today's rate is nothing less than a type of slavery.

Very stirring rhetoric, but mistaken. Slaves must work or be beaten or even killed. Slaves can be sold. Slaves in the Roman Empire could be sexually exploited or even killed at the owner's whim. This kind of exaggeration does not strengthen your case.

[D. Allan]

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This parable is about class envy.

first time i heard that interpretation. Ingenious. Well, then it is also for those who complain about people on welfare not working.

[D. Allan]

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We have to pay these practioners more so they will continue to exist.

In the prevailing ecomonic situation, that is so.

[Dr. Shane]

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first time i heard that interpretation.

Glad to see someone other than me is learning something here at C/A

[D. Allan]

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But the parable you cited is exactly the opposite. The workers are paid radically different wages, when divided by the hours worked. And the point of the parable is that "If you got what you agreed to, it makes no difference what others get."

Well, actually Jesus is speaking of spiritual matters here. I quoted the parable in answer to Shane who quoted a verse from Rev. where Jesus is saying he returns bringing rewards with him - rewards according to our works. This has nothing to do with our economics and it was a mistake for me to answer Shane on the same level.

I'm not looking to religion to justify my position.

I don't care what others get. Anymore. I'm retired. But still my grandchildren concern me - and yours too. What kind of economic injustices will they have to put up with? Plus this: pursuit of the dollar will steal much of real living and life from them. In its place they get stuff and dollars. A poor return!

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Very stirring rhetoric, but mistaken. Slaves must work or be beaten or even killed. Slaves can be sold. Slaves in the Roman Empire could be sexually exploited or even killed at the owner's whim. This kind of exaggeration does not strengthen your case.

I admit it is a slight exaggeration. Yet on the assumption that you wish me to have the courage of my convictions and not merely conform to the conventional economic wisdom i maintain that many of our citizens here in the USA are economically abused.

[D. Allan]

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Glad to see someone other than me is learning something here at C/A

Yey! Isn't it great?!

[there buster]

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This has nothing to do with our economics and it was a mistake for me to answer Shane on the same level.

If there was ever a parable that had to do with employer/employee relations, this is it:

Matthew 20:12saying, 'These last men have worked only one hour, and you have made them equal to us who have borne the burden and the scorching heat of the day.'

13"But he answered and said to one of them, 'Friend, I am doing you no wrong; did you not agree with me for a denarius?

14'Take what is yours and go, but I wish to give to this last man the same as to you.

15'Is it not lawful for me to do what I wish with what is my own? Or is your (eye envious because I am generous?'

And reading 'class envy' into this passage is very 19th century, but there's nothing about class here. All the workers were equal class. The only difference was the rate/hour they were paid. But each one received what was agreed upon.

Since each one receiving what they "agreed upon" is the central point of the parable, it has to at least mean that, if you freely agree to work for a certain 'reward,' you have no kick coming when someone else gets a different deal, note, even for exactly the same work.

It does however directly mention 'envy' as the cause of the trouble-- not 'unfair distribution.'

[Bravus]

On stars in the crown - in the light of an eternal, pain and trouble free life, the presence of God and Jesus... some stars don't seem like such a big deal. We won't envy them or feel inferior if we have less, so as a reward it seems pretty irrelevant.

Salvation is the big deal, and it's free.

[Bravus]

In terms of biblical versus modern economics, the Bible attached strict penalties to usury (the charging of interest). That's a huge economic issue now that tends to keep the poorer poor and the richer rich, which may have been why it was considered a problem. What do Christians do about it, and how does it play out in our consideration of a sanctified modern economics?

[there buster]

I often wonder. If people are so determined to resolve 'unfair income distribution' down here, with the things the moth and rust can decay, I can't help thinking they'll have the same trouble with 'star distribution' in the kingdom.

[Bravus]

Perhaps, but the Bible is pretty keen on looking after the poor and the widows and the fatherless too. We can talk about various mechanisms for doing that, but I think it's pretty clear that a concern for those less fortunate is Biblical.

[Bravus]

...and Billy Graham's gonna need a big ol' crown.

[there buster]

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We can talk about various mechanisms for doing that,

Interesting how these "mechanisms" always end up in forcing someone else to do the "right thing."

[Bravus]

I don't think so. At least, not forcing governmentally. Perhaps strongly exhorting.

Mind you, God doesn't seem to have too much of a problem with forcing: many of the judgements that descended on Israel are described as being because of social injustice. But He's God, that's his prerogative.

Anyway, care to suggest a mechanism that gets the poor cared for and requires no coercion? I'm all for it if it exists.

[there buster]

Taxation to "relieve poverty" is coercive.

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Mind you, God doesn't seem to have too much of a problem with forcing: many of the judgements that descended on Israel are described as being because of social injustice. But He's God, that's his prerogative.

This debate's already been done on Spectrum.

God does in fact refrain from forcing people to 'do good' of any kind. He warns us about the consequences, but He makes no effort at force. That is the weapon of the enemy. God did not coerce anyone to give charity, even in the theocracy. Mind you, there was a penalty for Sabbath breaking, and for dishonoring parents, and a very concrete one: stoning. But there was no enforcement mechanism for failing to leave the corners, etc.

God promised blessings to those who were generous to the poor, and punishments for those who refused, but He did not coerce anyone to do it.

Beyond that, even elaborate welfare systems do not eliminate or even ameliorate real poverty, because poverty is not a matter of material possessions.

Free market incentives and some notable private charities have done more to alleviate poverty and overcome the barriers of the caste system in Inda in the last 15 years or so, than 40 years of socialist redistribution plans before.

Voluntary 'mechanisms' already exist, they need not be created or enforced.