J.R.’s Zaphne Blog News for 01-31-2018

Where “Compassionate Conservatism” Falls Apart

Tisdale joined the global protests for a higher minimum wage for fast-food workers in May 2014. So while his compassion may be laudable, Brooks’ conservatism leads him to oppose any policy that would put more money in the pockets of Americans at the lower end of the economic ladder, either through public spending or measures that would compel American companies – now seeing record profits – to share the wealth with their workers who don’t have high-end skills. That’s apparent in Brooks’ dismissal of the plight of millions of low-wage American workers. “Weak labor demand, as in high unemployment, is a key factor in suppressing wage gains at the low end of the job market. It takes full employment for employers to bid up the compensation of low-wage workers.” Economist Dean Baker, co-director of the progressive Center for Economic and Policy Research, recently wrote a book with Bernstein titled, Getting Back to Full Employment: A Better Bargain for Working People, which detailed their research into the relationship between wages and unemployment. “The business press was full of pieces about companies offering child care or flex-work arrangements to keep and attract workers. They were chartering buses to take people from inner city neighborhoods to jobs at restaurants and hotels in the suburbs. In a tight labor market even workers with little education will be in demand.” It’s still relatively easy to find people who will work service jobs for poverty wages. We need to expand it such that people who are working, working honestly. While Brooks blames both liberals and conservatives for the suffering of the working poor, he doesn’t acknowledge that the earned income tax credit that once enjoyed support across the ideological spectrum has become a partisan issue. A 2013 study by David Cooper and Dan Essrow found that today, the average age of workers who would benefit from raising the minimum wage to $10.10 per hour “Looks nothing like the part-time, teen stereotype: She is in her early 30s, works full-time, and may have a family to support.” Eighty-eight percent of these workers are 20 or over; a third are over age 40. Brooks says raising the minimum wage “Would of course throw people out of work who are the most marginalized members of the workforce,” and would then “Be entirely on the public dole at that point.” But according to the Congressional Budget Office, raising the minimum to $10.10 per hour would eliminate a maximum of 500,000 jobs while raising the incomes of 17 million Americans. Arthur Brooks deserves credit for starting a conversation about the plight of the working poor in America.

Keywords: [“work”,”Brooks”,”wage”]
Source: http://billmoyers.com/2014/07/28/where-compassionate-conservatism-falls-apart

Free market capitalism and morality – Institute of Economic Affairs

It has become increasingly difficult to make a case for the morality of markets even though free market capitalism has been unequalled in reducing poverty and discrimination, and in creating opportunities for social and economic advancement. The left has hijacked the moral high ground because the proponents of free markets have been incapable of mounting a credible defence for the benefits that free markets provide at both individual and societal levels. The idea that free market capitalism is a mechanism to advance social order and decent humane relationships is considered outlandish. In reality, any attempts to modify the functioning of free markets through policy interventions and mould them into some ideal normative model invariably result in suboptimal outcomes compared to a market left to its own devices. The root cause of the problem that free market capitalism faces is that modern society tries to assess the functioning of markets by attributes that are used to evaluate the morality of individual behaviour. In order to think about the morality of markets, or lack thereof, we need to consider morality as a two-dimensional construct. Clark and Lee define these two sides of morality as magnanimous morality and mundane morality respectively. The market may be indifferent to morality, but since it aligns self-interested behavior with satisfying the needs of others, it delivers positive outcomes to the wider society as long as markets are governed by Smithian negative virtue of lawful conduct. Free market capitalism is a mundane moral construct but any attempt to equate market conduct with a commonly held perception of morality can become tangled in normative discourse. A more productive approach to address the critics of free markets is to focus on the positive outcomes of free markets that have moral merit in them on both national and global scale. In terms of policy debate, free market advocates should seek to influence decision-makers to create an environment where markets can operate free from political and special interest group interference. The Economist highlighted attempts in European countries to maintain and promote social cohesion with greater government control over the economy and concluded “That many of the policies espoused in the name of social cohesion do not promote compassion over cruelty. Rather, they encourage decline, entrench divisions, and thus threaten the harmony they pretend to nurture.” The mundane morality of the invisible hand creates an environment where each one of us is able to pursue our own self-interest through non-discriminatory impersonal exchanges governed by prices and free from normative interference.

Keywords: [“market”,”morality”,”free”]
Source: https://iea.org.uk/blog/free-market-capitalism-and-morality

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