Tag: Business Rights

Decentralizing Business: How Less Government, Not More, Will Help the Workers

By Mason Mohon | @mohonofficial

Business is bad – or at least that’s the contemporary cultural outlook. To the disdain of the Randian acolytes, society really hates businessmen. They are seen as gross, mean, and evil cheaters that act for nothing but profit. They would see the world burn for the fattening of their checkbooks. This seems to primarily be the product of the modern film and television industry. The mantra “it’s just business” has infected our entertainment and shows no signs of going away.

But the outlook we have toward businesspeople is not completely accurate. Absent government involvement, those running businesses have to serve the needs of consumers. The good entrepreneur is always looking out for demand that they can provide supply for. If they do not, they will gain no customers and thus no profits. It is the nature of private industry.

So, at a basic level of analysis, the cultural view of traditional business is inaccurate. But they may be onto something. Maybe the nature of “being business” isn’t bad, but the traditional structure could be. To explore the workings of human interaction and development, we can look towards the economist and philosopher F.A. Hayek. In Hayek’s Individualism and Economic Order, he explains:

[W]e discover many of the achievments on which human institutions rest have arisen and are functioning without a designing and directing mind… the sponatneous collaboration of free men often creates things greater than their individual minds can ever comprehend. (Page 7)

Often, this analysis is purely extended to governments. After all, this is part of the Hayekian critique of command economics and collectivist governments. Yet, I believe that Hayek’s analysis could extend further than the government. Somewhat ironically, this analysis could be extended so far as to protect the communist goal of protecting the sovereignty of workers.

When applied to governance, Hayek’s critique makes clear that one man at the top cannot do any project justice. Especially when it comes to large economies, no one human can hold all of the information in their mind so as to properly organize. This is the fatal flaw of any command economy. Technocrats and central planners don’t know what they’re doing – but are they really to blame? They’re only human.

Because of the human inability to hold so much information at any point, command economies are ultimately doomed to failure. This is seen most recently in Venezuela, an economy that seems to merely echo the broader downfall of command economies in the 20th century. One in charge cannot make a proper decision about what to produce, in what quantities, and with what material.

This is where business as an edge of state-based industry. Because of the profit and loss mechanism of private firms, they can accurately determine what to produce. If consumers do not want what a firm produces, the firm will go under. If the business produces too much, the surplus of goods will result in damage to the business’s profits, thus causing them to reduce production. If they are using bad material that damages the quality of the product, consumers will move to a competitor. If they are using material that is too good, it will hike up prices past the equilibrium price level, once again resulting in consumers going to a competitor for a less luxurious yet more affordable product.

But this does not mean that all is perfect in the traditional business structure. Samuel Edward Konkin II explained that the contemporary business model, “especially the corporate hierarchy, [is] an imitation of the state and not the market.” Large corporations have presidents with subordinates, along with a board of directors, making up a congress of sorts. Business has begun to echo the state because the state has entrenched itself into the minds of society. Instead of being the spontaneously organized collection of minds that Hayek described, business has become a rigid corporate structure mirroring the process of traditional government.

And this has its tolls. Top-down business approaches will be slower, simply because of the problem of knowledge. Hayek’s argument about knowledge being the limitation of human leadership applies to business too. As firms get larger, it gets increasingly difficult to make decisions that will benefit the company as well as the consumers.

In addition, as a business grows, it gets clunkier. Bureaucracy begins to develop, resulting in sluggishness when it comes to consumer service. In addition, once a business is large enough, it can become detached from the wants and needs of consumers, sometimes even ignoring them altogether. This has become especially apparent in tech giants such as Facebook and YouTube. The platform users were originally consumers that the platforms aimed to serve. This took a turn, though, when users turned into products in the form of psychological profiles to sell to advertisers. These massive corporate structures have become detached from those they originally aimed to serve. They have become more intent on developing tools to get users psychologically addicted rather than develop products that the conscious mind of the user actually desires.

So what would an alternative look like? We need something that avoids the problem of having a commander with limited knowledge and potentially other advantages. The proper alternative is decentralizing authority. This could take various forms when it comes to larger corporations. In some instances, it may look like a pure workplace democracy. In others, it may look like a technologically integrated workspace, utilizing blockchain to maintain order but reduce the need for corporate hierarchy.

Workplace democracy is already somewhat commonplace and seems to have some benefits. Nigel Nicholson, a professor of organizational behavior at London Business School, wrote in the Harvard Business Review that a democratized workplace that includes the workers in business decisions is the only type of workplace model that takes human nature and behavior into consideration. Once again looking back to Hayek, we can see that this makes sense. The combined knowledge of those that are hands-on with the day to day business will usually be more effective than a detached administrator and his one-man knowledge.

Furthermore, workplace democracy seems to have psychological benefits. Depression researcher Johann Hari explained that individuals like to feel like they’re in control of their own lives, and if they work a job where someone makes all decisions for them, it can lead to a feeling of helplessness. As a result, some workers may develop depression. When the workers are put in control, the depression dissipates. In addition, morale is boosted and so is productivity in turn.

Moreover, blockchain technology could prove to be phenomenally beneficial when it comes to larger businesses. The nature of blockchain means that it is decentralized, removing the need for a central authority. Code is law, so if done right, the system cannot be cheated. Blockchain has various other benefits in the business sphere, including supply-chain management and in-company voting.

Decentralizing business through various means has many benefits. Destruction of the traditional hierarchy in business would prove beneficial for the workers and, in turn, the well being of the business. Hayek’s problem of knowledge has more to offer than a traditional critique of the workings of government.


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Fiscal Conservatism is Dead

By Owen Heimsoth | United States

As of March 23rd, 2018, there is no fiscally conservative party left in control.

25 Republicans in Senate and 145 in the House, supposedly those in the party to represent fiscal conservatism and small government have made their voice clear that those two statements are no longer true.

GOP Leadership just rammed a $1.3 trillion dollar, 5-month, 2,232-page spending bill that basically nobody has read through Congress in under 24 hours.

The current budget will add $1.7 trillion to the national debt over the next 10 years, and this does not help at all. Why would the GOP care nowadays?

Thanks to ridiculous spending by the two parties over the years over a trillion dollars of debt is being accumulated each year. Because of this, the debt share per taxpayer has risen to over $170,000 and the debt is far greater than the GDP of the United States.

The situation is not getting better either. President Trump has left the GOP’s plan to balance the budget in the next 10 years. The US has one of the worst debt situations in the world and the party with control of all branches of the national government refuses to do nothing about it.

In early 2017, the Senate failed Rand Paul’s measure to enact a balanced budget act as it only got 14 votes. If the GOP was truly comprised of fiscal hawks and true conservatives, the bill should’ve passed with flying colors. Instead, it was the beginning of the GOP showing their true colors.

Not only is this budget a huge bill that nobody has read, it is packed with useless spending.

Sen. Rand Paul was quick to point out a few key figures on Twitter. The following  figures come directly from @RandPaul

o $1m for the Cultural Antiquities Task Force

o $6.25m for the Ambassadors Fund for Cultural Preservation

o $20m for Countering Foreign State Propaganda

o $12m for Countering State Disinformation and Pressure

o $5m for Vietnam Education Foundation Grants

o $2.579m for Commission on Security and Co-operation in Europe

o $15m to USAID for promoting international higher education between universities

o $2.696bn for International Disaster Assistance

o $1.371bn for Contributions to International Organizations

o $51m to promote International Family Planning and Reproductive Health

o $7m promoting International Conservation

o $10m for UN Environmental Programs

o $1m for the World Meteorological Organization

o $218m for Promoting Democracy Development in Europe (yep..the birthplace of democracy needs promoting)

o $25m for International Religious Freedom

o $10m for disadvantaged Egyptian Students

o $12m for Scholarships for Lebanon

o $20m for Middle East Partnership Initiative Scholarship Program

o $12m in military funding for Vietnam

o $3.5m in nutrition assistance to Laos

o $15m in Developmental assistance to China

o $10m for Women LEOs in Afghanistan

Oh, yeah, and this just a couple pages of the 2,232-page bill. The government cannot properly fund its own programs yet we are sending billions to countries that hate us. No wonder we are $21 trillion in debt.


Featured image source.

The Fight Against $15?

By Levin Kaio|USA

The minimum wage has created controversy amongst various political and economic ideologues and is worth taking a closer look at. The appearance of a capsized remuneration is merely an attempt by the U.S government to help the poor achieve an equal opportunity and overcome impoverishment. This policy was created in the early to mid-twentieth century when President Franklin D. Roosevelt proposed the Fair Labor Standards Act of 1938 (Grossman). This progressive approach to poverty was radical, and rightfully so, due to the understanding that the government was mandating businesses to pay a fixed wage rather than pay based on individual skill sets. The deliberate attempt to control the free market limits financial gain for the common individual and prohibits opportunity to expand a business, which only points toward one solution: abolishing the minimum wage entirely. Having a living wage may have had a strong moral reasoning for its original intent, which could have resonated with low-income individuals, but it fails to recognize that a society built on economic freedom cannot function when constricted by the government.

The development of the minimum wage originates from the province of New Zealand during the year 1894 (Bose). This new legislation was introduced to the whole nation of New Zealand and even across all industry and businesses. Following the example of New Zealand, Australia became the second jurisdiction to approve of a minimum wage but because it was still under the British Commonwealth, it followed the direction that the Queen of England preferred (Commonwealth). This policy once implemented will increase the price of goods in exchange for a slight increase in labor participation. The minimum wage law only placed these restrictions that “only covered six industries that were notorious for paying low wages” and soon spread to over 150 industries by 1904 (Bose). After the approval of the minimum wage in the UK commonwealth in 1909 (Commonwealth), the U.S caught a glimpse of how the government could assist individuals financially. With this desire to assist the poor within the United States, regulation was placed on businesses but was the intrusion of government profitable to the country. During the Great Depression (1929-1939), President Franklin Delano Roosevelt devised a plan to increase the wages of the workers that were being curbed by “greedy” businesses. President Roosevelt made these laws under the “New Deal” to promote equal pay and fair working standards, which included a maximum workweek of 40 hours, minimum pay of 25 cents per hour and, to promote child labor laws, have the minimum working age at 16 years old (Grossman). Supporters of the minimum wage advocate for its increase because the premise is that, by having government increase wages it, therefore, boosts poor individuals above the poverty line.

Those who support the increase of the minimum wage believe in the moral aspect of the proposal and build their respective think tanks around this belief. Supporters often look to accounts on the current economic atmosphere such as, “[W]e need policies that clearly do something for hard-working people who have been clobbered by a financial crisis they did not create” (Auerback). The political party that supports these proposals are actually both the left Democrats and the right Republicans; these parties only want to advance the income of their big donors and resent the poor. Statements such as “rich people are inherently evil” are what make the groundwork of the current activism for the increase of the minimum wage possible. Firstly the increase in the minimum wage would help families, financially, by having “more family income, some people would choose to retire, go back to school, or have children, making it easier for others who need jobs to find them” (Auerback). By having this policy implemented followers of the increase of minimum wage believe that the middle class would grow and even extending it to a point of predicting that it would “raise the incomes of 28 million Americans” (Auerback). The raising of income of many Americans is one of the many claims that supporters promulgate, this prediction is based on a moral duty of government to acquire the wealth from the top and distribute it evenly. Ultimately, the goal is to a have a society that is equal in all ways and that those suffering financially can be lifted out of abject poverty by the wonders of legislation. This concept is the basis of the movement to increase minimum wage to a “living wage.” The application of a policy, such as minimum wage, would be catastrophic to those living in Hawaii because they will experience a higher rate of poverty and other economic backlashes.

Hawaii has recently proposed a bill to steadily increase the minimum wage to $22/hr by the year 2022 (Drewes). This bill that was introduced to the house floor in the beginning of 2017 and has been recorded as one of the most liberal policies in the states. However, the populous is largely ignorant of the implications of these policies and what this bill could have on a society such as the Hawaiian people. The proponents of the minimum wage bill, the Democratic party, is attempting to gain a moral high ground and claim that businesses need to pay a fair share to the citizens that are currently economically disenfranchised. If a required wage was implemented it would entail various economic backlashes such as the increasing of labor demand in return for a decrease in labor productivity. This move to improve the wellbeing of the poor has been most harmful to the diverse economic system that Hawaii barely maintains. Many supporters allow this morally bankrupt policy to associate the decrease in homelessness with the increase of the required wage but in reality, the change is negligible by most people, “[In a] 2017 count, conducted in January, found 7,220 sheltered and unsheltered homeless people across the state. That’s down 9 percent from 2016” (“Homelessness Statewide is Down”). The Hawaiian Democratic party attempts to use their power to pass this bill in order to fulfill a moral duty to the people cheated by the system. In the end, if Hawaii is to approve of the increase then Hawaii will deteriorate economically and see a gradual decline in population due to economic instability.

The underlying belief in the minimum wage is to construct a system in which the wealthy must pay more than half of their income to subsidize the poor. The implications of the minimum wage, in general, will decimate the economy because it will increase poverty and harm the people that it is intended to save the economically disgruntled. A case in 1923 refuted the future President Franklin Roosevelt, who “made a strong argument that a minimum wage was a violation of the constitutionally guaranteed freedom of contract embedded in the Fifth Amendment’s language about due process and the deprivation of liberty and property” (Stoll). To promulgate regarding minimum wage is to be against individual liberties and for the removal of economic freedom; the idea of government being able to determine prosperity via economic intervention is in itself a delusion.


Works Cited

Auerback, Marshall. “Five reasons why we should raise the minimum wage.” Salon, 30 July

2012, www.salon.com/2012/07/30/top_5_reasons_why_raising_the_ minimum_wage_is_good_for_you_and_me_salpart/.

Blair, Chad. “A $22 Minimum Wage?” Honolulu Civil Beat, 10 Jan. 2017,

www.civilbeat.org/2017/01/a-22-minimum-wage/#show-comments

Bose, Apurva. “History of Minimum Wage.” History of The US Minimum Wage-From The Very

First Minimum Wage, 5 Sept. 2017, bebusinessed.com/history/history-of-minimum-wage/.

Drewes, Paul. “Some lawmakers want $22/Hour minimum wage.” Home – Honolulu, Hawaii

news, sports & weather-KITV Channel 4, 11 Jan. 2017, www.kitv.com/story/34231780/some-lawmakers-want-22hour-minimum-wage.

Encyclopædia Britannica. “Commonwealth.” Encyclopædia Britannica, Encyclopædia

Britannica, inc., 15 Sept. 2017, www.britannica.com/topic/Commonwealth-association- of-states

Grossman, Jonathan. “Fair Labor Standards Act of 1938: Maximum struggle for a Minimum

Wage.” U.S. Department of Labor-History-Fair Labor Standards Act of 1938: United States Department of Labor, June 1978, www.dol.gov/oasam/programs/ history/flsa1938. htm#1.

Powell, Jim. “How FDR’s New Deal Harmed Millions of Poor People.” Cato Institute, 29 Dec.

2003, www.cato.org/publications/commentary/how-fdrs-new-deal-harmed-million- poor-people.

Staff, HNN. “Count: Homelessness statewide is down, but Oahu sees less progress.” Home-

Hawaii News Now-KGMB and KHNL, 10 May 2017, www.hawaiinewsnow.com/story/ 35398759/new-count-homelessness-dropped-9-percent-statewide-in-2017-but-up- slightly-on-oahu.

Stoll, Ira. “9 Reasons Why Raising the Minimum Wage Is a Terrible Idea.” Reason.com, 3 Mar.

2014, reason.com/archives/2014/03/03/9-reasons-why-raising-the-minimum-wage-i.

Everybody Loses: The Effect of the $15 Minimum Wage

By Ricardo Tremblay | CANADA

On January 1st, 2018, the minimum wage in the province of Ontario, Canada, increased from $11.60 CAD to $14.00. On January 1st, 2019, the minimum wage will be further increased to $15. Out further west, the province of Alberta has also passed a law that will increase the minimum wage there to $15 in the month of October 2018.

After only a week of the change being put into effect in Ontario, prices across the whole province for various goods and services have increased significantly. This is due to the fact that businesses will not, and rightfully should not, simply let themselves lose money because they have to pay their workers 20%-30% more. The easiest and most effective way for businesses to make that money back is to increase the prices of their goods and services accordingly. In other words, the price for goods and services at many retailers goes up. This is bad for customers, as they have to pay more, and this is bad for the businesses, as they are not gaining anything out of the change themselves and have to increase their prices.

“But it benefits the poor workers!”, some may say. What these people fail to realize is that businesses have also been laying off many workers, and giving minimum wage employees shorter and less frequent shifts. These employees will end up seeing that this ‘benefit’ may end up costing them their job, or not doing much more than giving them fewer work hours. The employees aren’t exempt from the price increases either, so ironically they will end up paying more for products as well.

This creates a situation in which businesses, employees, and especially consumers end up unhappy and frustrated. Not many people, if any at all, actually end up benefiting from the minimum wage increase. In comparison, the recent tax cuts in The United States have resulted in bonuses and wage increases for employees all over the country, and this was all done without hurting consumers, and by instead helping corporations flourish.

All in all, this is just another of countless examples as to why government interference and a government-controlled economy lead only to harder times for everyone. Some Canadians may have suffered due to these changes, so hopefully advocates for higher minimum wages in other provinces and nations will soon realize the effects of their desires, and instead advocate for a freer, more stable method to benefit the working class, that isn’t at the expense of everyone else.

How the Government Held Back the Second Industrial Revolution

By Mason Mohon | USA

Between the end of the Civil War and the beginning of the 20th century, the American economy experienced growth like no country had ever seen before in the entire history of the world. The discovery of lots of oil, along with the progression of electricity, expanded logging industries, and advancements in mining gold and silver created profound economic growth. New investments from overseas stimulated the American economy and migrant workers provided cheap menial labor. The development of steel lead the railroad system to a great multitude of new locations.

This age in American development was also seemingly plagued by the ills of the free market and was only held through because of government intervention. That is what historians see, and that is what the textbooks teach. Labor conditions were horrible, income inequality increased, and robber barons took over the oil industry. The issue with this, though, is that people look at it with no depth. They take everything at an economically uneducated mainstream face value. A deeper look into the issues afflicting America must be taken if we want to truly see what harmed and benefited the United States during this time.

In the first place, we must look a bit at what did not happen, and where funds did not go. This is important because of what Bastiat described as the seen versus the unseen. In one of his most famous essays, he wrote the following “There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.” What this means is that we saw the consequences of what happened in history, but to find out if what we did was as beneficial as it could have been, we need to look at the consequences of the potential action that was not taken. This is especially important for the second industrial revolution., because the government did intervene, and growth did happen, but correlation doesn’t equal causation. We must look to what we know to be economic law, and what is true in all instances, and look at what did and didn’t happen.

Many argue that the government’s subsidies and land grants to the railroad industry allowed the economy to boost, and even more, that they were instrumental and critical to the economic growth that happened. This is not true at all. The subsidies that went to the railroad industry went there because the money was taxed from people around the United States. This was money that could have gone places consumers wished for them to go. There is no way to gauge demand for a government agency, so instead, they must bring in scientists who make a guess as to where the best place to promote industry would be. An astounding amount of money went from the government, after it had been stolen to the taxpayers, and went to what there wasn’t necessarily demand for. The railroad industry would have flourished, and maybe even in more economically strategic places without the government’s “help.”

Furthermore, this was seen as the age of the “robber barons,” with men like Rockefeller, Morgan, and Carnegie dominating economic industries, both by cutting prices to beat out competition and by buying out the entire process of producing the good that dominates their industries. Many do not like what these men did and see it as sensible as to why antitrust laws were passed soon after. The issue, though, is that many men of great industry in these times colluded with government to benefit their industry. When it comes to monopolies, you can achieve one in two ways: the natural way, which means serving consumer demand better than everyone else, or the unnatural way of working through government subsidy and regulations to get a foot up on the industry. The second method was the one used primarily in these days because of the lack of lobbying laws. It was not a flaw in the market that these men climbed to the top, but rather it was collusion with the state, the ultimate organization of violence.

Lastly, the poor working conditions and the profound income inequality is seen by many to be a flaw in the upgrading capitalist system. The issue with this is that the workers may have had a tough working environment, but it was better than the alternative of starving by not working or the economy staying behind and everyone continuing to live in a sort of agrarian post civil war economy. The real wages of the workers increased in these times because the development of chain companies, steel for transport, and electricity, which all worked to drive down the price of goods. The conditions of each worker was actually improving from what it had been. At the same time, inequality in income is not an inherently bad thing. The way capitalist economies have tended to work is the rich get richer, and the poor get richer at a slightly lower rate, contrary to the Marxist joke.

In the end, we must realize that we cannot take what happened during the second industrial revolution at face value without looking at economic law and applying it. The point of studying history is to learn from the mistakes of those in the past, so what we must mainly learn is that government subsidies put money into places where there is not necessarily demand and that corporate lobbying is the primary cause of unnatural and harmful monopolies.