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FRIEDMAN: They do and the tragedy of the situation, as what Walter Williams point out, that as long as they are undocumented and illegal they are a clear net gain, the nation benefits and they benefit. They wouldn't be here if they didn't.

Maybe now that it is a Friedman quote, Sneakers will actually understand what he reads.
The only thing I added here was a bit more explication. The net gain is the ability of more Americans to purchase goods they would not be able to purchase if illegal labor was not keeping costs within reach. I don't understand how anyone could think the income inequality has no effect on this.

i don't believe someone sweeping the floors at McDonald's should have an artificially high income or get raises every year. if he thinks that's not fair, he can go home to his impoverished shack and play with his Xbox on his HDTV while he cries to his girlfriend on his cell phone.

Who said he should have an artificially high income? And that he has an xbox and HDTV? Have you ever met or know any of the people you assume are living high on the hog of poverty?
As for me, all I'm saying is that he shouldn't die of cancer because all he does is sweep floors. His life isn't worthless because he doesn't have enough money for treatment.

I acknowledged that they didn't, you didn't quote enough!

I'm going to have to agree to disagree with you that many of them went into business for themselves, I don't think they did.

However that era had several MASSIVE differences:
1. Women's rights didn't come about until later. The majority of women during that day were homemakers. Many families (which were larger) were totally supported by single incomes.

2. Suburbs weren't really around until post WW2. Prior to that just about everyone lived in the inner cities.

3. America didn't take over as a major manufacturer until AFTER WW2 as well. Prior to that we were still pretty jacked up from the great depression. Following that however, the majority of Europe was in shambles.

then i think we're on the same page when referring to increases in income, but let's set aside small businesses for now. i may be getting too romantic (from reading Outliers) and can't provide good evidence for this being a major factor. so let's go back to when you said increases in income came about due to,

Prior to the unions and labor laws those guys didn't make livable wages either, and had absolutely abysmal working conditions. There's a reason the "captains of industry" from that era are also called "robber barons". That's also a trend I think would resurge with the total deregulation of business.

this is just another myth. businesses competing for labor increases wages, not regulations. when businesses are free to be profitable, other people start their own businesses to get a piece of the action. when these new businesses need labor, now it's a worker's market. otoh, artificial wages and too much regulation (not all regulation, only "too much," but i am not smart enough to know where to draw that line) hurt businesses and lower productivity and has a tendency to lower total wages since less people are working.

but i have nothing original to add. it's already been said better than i can:

FRIEDMAN: The crucial issue is whether governmental measures which have the effect of favoring union organization of giving them privileges and immunities that are not accorded to other organizations in the society, benefit the society as a whole, or harm the society as a whole. The proposition I tried to make in this film was that the source of the prosperity of this country was freedom of enterprise, freedom of employers to hire, of workers to work for whom they wanted to; and insofar as unions have played a role, they have protected some workers at the expense of others, and have retarded the prosperity of this country. I think that Lynn Williams' statements to the contrary cannot be supported by any empirical or other evidence that he has, understandably, I'm not blaming him for this, he would be faithless to his job if he did not believe sincerely in what he's saying. I'm not questioning his sincerity, but sincerity is a much overrated virtue in our society. The plain fact is that there is no evidence whatsoever that either unions or minimum wages have made positive contributions to the prosperity of this country. Some unions have, of course, some unions have done great harm. It's not an open and shut picture in which you can make a sweeping statement. But on the whole, the growth of this country __

VOICE OFF SCREEN: I'd like for you to make a sweeping statement.

FRIEDMAN: I do. The sweeping statement I make is that the prosperity of this country derives primarily from freedom of enterprise and freedom to hire, to employ, to work, and not from restrictive measures imposed by trade unions.

Free To Choose Volume 8 - Who Protects the Worker? (transcript)

and i agree it was a tragedy that mysogynists held back the labor market. maybe those first few generations wouldn't have been so poor otherwise.

i don't understand what suburbs have to do with this unless you're referring to an increase in cost of living. but not everybody moved to the suburbs mind you, and this only happened well after the industrial infrastructure was in place because of the war. and whether or not war was a "good thing" is getting to another myth. it definitely helped the US in some ways; however, at what cost to the world?

and this is why i keep talking about a regression to the mean. we had a significant event in the past that altered the playing field in favor of the US economically. great for us, but not sustainable (not to mention something we absolutely do not want again).

and to back up that last post, i go back again to Hazlitt - Economics in One Lesson, Chapter 19, Do Unions Really Raise Wages? (page 121).

i blame it all on the schools. how come i have to learn this stuff when i'm 35? i could have saved myself a bunch of time and done something constructive in my 20's rather than listening to RATM, smoking pot, and bitching about The Man.

The problem with Friedman there is that he does not account for the exploitation of workers. That is why Sneakers said that unions were a good thing at the beginning. Unions are terribly flawed now, but they don't have to be. Even the critics of unions such as Friedman make a basic assumption about unions based on what they are now. Hazlitt is better, but still can be easily argued against.

The problem with Friedman there is that he does not account for the exploitation of workers. That is why Sneakers said that unions were a good thing at the beginning. Unions are terribly flawed now, but they don't have to be. Even the critics of unions such as Friedman make a basic assumption about unions based on what they are now. Hazlitt is better, but still can be easily argued against.

i know you like arguing, man, but this is really kind of pointless if you have no interest in digesting the material i'm using to back up my arguments and instead resort to making flippant ad hominem remarks about one of the greatest minds of this past century in his field of expertise (tho it's nothing too bad, you basically assume Friedman is incompetent). if i was referencing some random economic paper by Dr. nobody, sure, tear that down all day. but do you think someone as eminent as Friedman has not thought through this 1000x deeper than you or i?

i mean, if it's just like "fu man i'm not reading a whole book and watching a 10 hour documentary to argue about it in a thread, i know this already," then fine. you know what you know and it's been nice talking to you. but if you want to convince me of something, you have to do more than make these weak rebuttals constantly without providing any references for why you believe what you believe or give me something which i can sink my teeth into on my own time. what great mind (other than your own) has influenced you?

frankly, i don't know why you're in threads like these. but for me, i want to learn new things and constantly examine my beliefs for biases and weaknesses. if i have weak beliefs, i'll dump it without a second thought and i'll proclaim that i was a retard for having believed in it. whatever, i've been wrong in the past and ill be wrong again in the future.

anyways... i reserve the right to not reply further in this thread.


L. WILLIAMS: Can't we get some __ can't we get some perspective in this, Walter. Talking about unions down through the ages makes no sense at all in terms of where we're at now in this century at this time. This business of trying to relate where unions come from to the, to the medical profession and Hippocratic oaths, Hippocratic oaths or hypocritical oaths, however one looks at that, back in the Greek aeons really have very little relevancy.

W. WILLIAMS: Yes it does.

L. WILLIAMS: The violence, see hear me out a minute , I waited patiently.

W. WILLIAMS: Okay, okay.

L. WILLIAMS: The violence it's associated with __ well, not so patiently, but I waited. The violence associated with the labor movement and so on have been minimal and was a reaction in this century, not over the ages, a reaction in this century to the violence done workers by corporation and powerful economic groups when there was no workers' organization to protect them and no way to deal with their greed and with their power __

MCKENZIE: Okay. Now, now I'm turning to Milton because he's heard the flavor of the discussion.

FRIEDMAN: Sure. What Lynn Williams is now saying is utter nonsense. There's no other __ no two ways about it. The conditions of the worker in this country before there was labor unions were very important __ improved very greatly. You cannot tell me the millions of people, my parents, your parents, for all I know, parents of many people around, came to this country from Europe in order to be exploited and in order to be subjected to violence. Of course, there were incidents of violence.

[...]

FRIEDMAN: If we __ if we go back, the violent __ there was violence, of course, there always has been violence. It's not excusable, I'm not excusing violence on the part of anyone, but I agree with Mr. Green and with Walter Williams that people should be free to organize. Of course they should be free to organize. What I object to is the special privileges that have been given by government to labor unions which are not available to other groups at all. When labor unions have used violence in industrial disputes they are not subjected to the same sanctions as people ordinarily are. When cars are turned over in the course of a labor dispute, how often do people go to jail as a result of it?

one of the greatest minds of this past century in his field of expertise

He was smart and one of the most controversial economists. Even Greenspan was more pragmatic and today no mainstream economist supports classical monetarism.

It is ironic that Friedman's greatest success is the idea of tax withholding.

Samuelson and the MIT economists have left a far bigger and more important footprint.

He was smart and one of the most controversial economists. Even Greenspan was more pragmatic and today no mainstream economist supports classical monetarism.

It is ironic that Friedman's greatest success is the idea of tax withholding.

Samuelson and the MIT economists have left a far bigger and more important footprint.

improva delivers.

i know you like arguing, man, but this is really kind of pointless if you have no interest in digesting the material i'm using to back up my arguments and instead resort to making flippant ad hominem remarks about one of the greatest minds of this past century in his field of expertise (tho it's nothing too bad, you basically assume Friedman is incompetent). if i was referencing some random economic paper by Dr. nobody, sure, tear that down all day. but do you think someone as eminent as Friedman has not thought through this 1000x deeper than you or i?

lol, sorry I found a flaw in your great hero's argument. it doesn't mean I think he's incompetent. It means I think he is shaping his argument. He makes, as your quoted off screen voice asks him to, a lot of sweeping statements.

As for me, I also agree with improva on Paul Samuelson. I also am interested in James Buchanan (not the president) and other public choice guys (he taught at my alma mater so I picked him) and Paul Krugman even though like Friedman, Krugman makes his points non-objectively.

Samuelson and the MIT economists have left a far bigger and more important footprint.

i'm not so sure about that. the obituaries are probably as balanced an assessment of a man's life as any.

Paul Samuelson's obit
http://www.nytimes.com/2009/12/14/business/economy/14samuelson.html?pagewanted=all

Milton Friedman's obit
http://www.nytimes.com/2006/11/16/business/17friedmancnd.html?pagewanted=all


i think Samuelson has had a wider academic influence in teaching economics while Friedman has had a wider popular influence in teaching economics. though the two were opposed throughout their lives, as Samuelson said, “Economists are said to disagree too much but in ways that are too much alike: If eight sleep in the same bed, you can be sure that, like Eskimos, when they turn over, they’ll all turn over together.”

there is a good bit of overlap between the two:

If government gets too big, and too great a portion of the nation’s income passes through it, he said, government becomes inefficient and unresponsive to the human needs “we do-gooders extol,” and thus risks infringing on freedoms. - on Samuelson

As nations became locked in global competition, and as the computerization of the workplace created daunting employment problems, he agreed with the economic conservatives in advocating that American corporations must stay lean and efficient and follow the general dictates of the free market. - on Samuelson

It was not that Mr. Friedman believed in no government. He is credited with devising the negative income tax, which in a modern variant — the earned income tax credit — increases the incomes of the working poor. He also argued that government should give the poor vouchers to attend the private schools he thought superior to public ones. - on Friedman

“The boom that lasted from 1982 to 1990 was engineered by the Reagan administration in a straightforward Keynesian way by rising spending and lowered taxes, a classic case of an expansionary budget deficit,” Mr. Solow said. “In fairness to Milton, however, it should be said that one of the reasons for his wanting a tax reduction was to force the spending cuts that he presumed would follow.” - on Friedman

lol, sorry I found a flaw in your great hero's argument. it doesn't mean I think he's incompetent. It means I think he is shaping his argument. He makes, as your quoted off screen voice asks him to, a lot of sweeping statements.

in my hero's defense, quoting from NYTimes obituary again, "Once, when accused of going overboard in his antistatism, [Milton] said, 'In every generation, there’s got to be somebody who goes the whole way, and that’s why I believe as I do.'"

go big or go home, baby. that's my boy!


but seriously, it's not shaping the argument if there's empirical evidence that conditions in factories were getting better before widespread unionization in the workplace.

from the book version of Free to Choose:

A myth has grown up about the United States that paints the nineteenth century as the era of the robber baron, of rugged, unrestrained individualism. Heartless monopoly capitalists allegedly exploited the poor, encouraged immigration, and then fleeced the immigrants unmercifully. [...] The reality was very different. Immigrants kept coming. The early ones might have been fooled, but it is inconceivable that millions kept coming to the United States decade after decade to be exploited. They came because the hopes of those who had preceded them were largely realized. The streets of New York were not paved with gold, but hard work, thrift, and enterprise brought rewards that were not even imaginable in the Old World.
[...]

Despite the image often conveyed that labor unions protect low-paid workers against exploitation by employers, the reality is very different. The unions that have been most successful invariably cover workers who are in occupations that require skill and would be relatively highly paid with or without unions. These unions simply make high pay still higher. [... ] The oldest traditional unions in the United States are the craft unions—carpenters, plumbers, plasterers, and the like—again workers who are highly skilled and highly paid.
[...]

The most reliable and effective protection for most workers is provided by the existence of many employers. As we have seen, a person who has only one possible employer has little or no protection. The employers who protect a worker are those who would like to hire him. Their demand for his services makes it in the self-interest of his own employer to pay him the full value of his work. If his own employer doesn't, someone else may be ready to do so. Competition for his services—that is the worker's real protection.


however, if by "shaping the argument" you mean laying out some basic historical facts and making logical inductions based on those facts, then yeah, he shaped the crap out of that argument.

i'm not so sure about that. the obituaries are probably as balanced an assessment of a man's life as any.

Paul Samuelson's obit
http://www.nytimes.com/2009/12/14/business/economy/14samuelson.html?pagewanted=all

Milton Friedman's obit
http://www.nytimes.com/2006/11/16/business/17friedmancnd.html?pagewanted=all

I'm not sure that is a good measure. Newspapers have a political stance.

http://www.guardian.co.uk/commentisfree/2006/nov/16/post650

Lol here is Samuelson as late as 1989, just before the fall of the Berlin Wall:

”The Soviet economy is proof that, contrary to what many sceptics had earlier believed, a socialist command economy can function and even thrive”.

The problem with Samuelson and Mathematical economists is their complex mathematical equations are gross simplifications and aggregations at best, but more often absurd misrepresentations of reality.

The problem with Samuelson and Mathematical economists is their complex mathematical equations are gross simplifications and aggregations at best, but more often absurd misrepresentations of reality.

I don't think I have claimed any economic model to be perfect. But if you don't want to use mathematics how do you then suggest we try to analyze which approach to pick?

EDIT: Forgot to answer your question, but what AGtJ said.

One problem Mathematical fanatics seem to forget is that all their equations are literary economics expressed in mathematical form.

From mathematician Eugenio Frola:

"It is often claimed that translation of such a concept as the maximum from ordinary into mathematical language, involves an improvement in the logical accuracy of the concept, as well as wider opportunities for its use. But the lack of mathematical precision in ordinary language reflects precisely the behavior of individual human beings in the real world…. We might suspect that translation into mathematical language by itself implies a suggested transformation of human economic operators into virtual robots."

And from the son of Carl Menger, who was himself a mathematical economist:

"Consider, for example, the statements:

(2)To a higher price of a good, there corresponds a lower (or at any rate not a higher) demand.

(2')If p denotes the price of, and q the demand for, a good, then
q = f(p) and dq/dp = f' (p ) <= 0

Those who regard the formula (2') as more precise or "more mathematical' than the sentence (2) are under a complete misapprehension… the only difference between (2) and (2') is this: since (2') is limited to functions which are differentiable and whose graphs, therefore, have tangents (which from an economic point of view are not more plausible than curvature), the sentence (2) is more general, but it is by no means less precise: it is of the same mathematical precision as (2')."

So if the conceptual model is illogical garbage before it is expressed in mathematics, expressing it in mathematics won't change the fact or make it scientific.

==============

The other problem is you cannot control variables in the ever changing world we live in. If you raise minimum wage, you may not find unemployment, does that show raising a minimum wage does not cause unemployment? No.

You have to control for inflation, companies passing on costs as well as cutting costs, and that's just for starter's. I have read tons of minimum wage studies, some try to control for inflation, some try to control for companies passing on the cost, none I have read control for companies cutting other costs. None cover all of these in any reasonable fashion which is unscientific. Using some mathematics in the analysis doesn't change this.

Some make horrendous errors such as taking an industry in isolation. Another horrendous one was a survey method for fast food restaurants with the disclaimer that only restaurants that were still in business after a minimum wage hike were surveyed a second time and used for their data. But what about the ones that were not still in business, why not get in contact and see if minimum wage played a part in them closing up shop? But hey they used maths and played around with models so it must be scientific!

I don't think I have claimed any economic model to be perfect. But if you don't want to use mathematics how do you then suggest we try to analyze which approach to pick?

Logic

Economics is not a natural science, but is based on the actions of people and there is so much information that those sitting in ivory towers don't have access to. And so thinking one can effectively mathematically model and manipulate an economy is a fatal conceit imo.