The Minimum Wage: How To Prevent Job Creation

Much of the developed world is suffering a jobs crisis, and the experience for Ireland is worse than most. The Irish legal framework for the jobs market, beyond a basic minimum wage, has also had a complicated system of “Joint Labour Committees” which are capable of imposing additional wage requirements on particular sectors of the economy (affecting about 200,000 people). This system was found to be unconstitutional last summer. Replacement legislation is coming down the pipeline now, with the government promising to extend an employer’s right to plead “inability to pay“.

The current legislative proposals permit an employer – subject to certain conditions – to apply to the Labour Court for a derogation from the wage rates set in the sectoral wage agreement on the basis of inability to pay.

The derogation can be granted for between three months and two years – provided an employer has not been granted an exemption within the previous five years for the same workers.

The Labour Court must be satisfied that without the exemption, there would be a substantial risk to jobs or to the sustainability of the employer’s business.

The change is described by a government spokesman as “minor”. They don’t want to be seen to be undermining the wages of the low-paid, but the truth is that this system does no good at all for the people who need the most help, who are just below the bottom rung of the jobs ladder: those who are looking for work.

Involuntary “unemployment” would not exist in the free market; anyone who can work would be hired, if they would only lower their asking price. When market-clearing wage rates are illegal, however, unemployment is inevitable.

Thought experiment: Imagine that the price of a new car was set by government at an artifically high level, as a result of the government having been lobbied by manufacturers of some of the more expensive models. Imagine that you could only negotiate a lower price if you presented your case formally to a special government committee, who would decide whether or not you could afford it. Do you think that more or fewer new cars would be bought?

Ron Paul’s Irish support proving that liberty is popular everywhere

With thanks to Wicklowwolf over at Freedom Ireland.

A new anti-democratic agenda?

Vincent Browne’s latest article created a bit of a stir online. The headline, “Technocratic, unelected governments are the ideal”, was always bound to attract attention. His core proposal is as follows:

If parliament was where policies were decided and a technocratic executive arm were directed to execute those policies and be held entirely accountable for doing that, then we might have democratic politics and accountable politics.

I would have thought that we already had a substantial technocracy in the form of the full-time employees of each government department: the ones who remain employed regardless of which government reaches power. It seems that this proposal would like to take things a step further so that the Ministers themselves, the chief executives of each department, were also unelected.

Voters would lose control over these appointments; they may be appointed in a similar fashion to the European Commission. Would this reduce corruption and improve accountability? Something tells me that it would not. Those who reached executive power would undoubtedly be friends and allies of politicians, except one stage further removed from voters. Wouldn’t we rather have the messiness of democracy than surrender to even greater bureacratic control? Even better, we could abandon the notion that government can produce a perfect society. Let’s discuss the alternative.

We are back

After spending some time at another location, we’ve decided to come back to WordPress. Subscribe to the feed for regular updates, or email us if you would like to contribute. Here’s to some great conversations!

New ILF Website

Dear libertarians,

After a period of inactivity, the Irish Liberty Forum is soon to return better than ever with a new and improved site this Sunday 18th April 2010.

Please sign up and join us at http://irishlibertyforum.org/

Subscribe to our weekly article that we’ll e-mail to your account, keep a keen eye on the blog and watch as we update the various features of this site as we will try to give you the best source of libertarian analysis in Ireland.

Our first article is entitled “Libertarianism: An Introduction” by Prof. Gerard Casey of University College Dublin.

If you are interested in writing for the blog you are free to submit articles as a user which will be reviewed before publishing.

In peace and liberty,

Brian

The Death of the Celtic Tiger

I’ve just published an article on Mises.org entitled:

The Death of the Celtic Tiger
http://mises.org/story/3773

Celtic Circus Tiger: The Irish jump through the hoop for their master

More on Inequality and Misuse of Statistics

Ever taken a statistics course? Most stats lecturers devote a special moment to highlight how statistics can be misused. For instance my tutor once showed us a graph like this:

Coincidence?

We can clearly see that there’s a correlation between ice-cream consumption and deaths by drowning. But what can we infer from this? It’s possible that eating ice-cream causes drowning (due to stomach cramps while swimming). It’s also vaguely possible that drowning deaths cause increased ice-cream consumption (mourning relatives might go for an ice-cream to cheer themselves up). However the most sensible explanation is that both ice-cream consumption and drowning deaths increase is due to another factor: the weather. People eat more ice-cream and go swimming more often in summer.

However, such a straightforward explanation is hardly ever seen in economics. The empirical approach often remains unquestioned. Consider this syllogism: in the past, taxes were low. Today, taxes are high. We were poor in the past but now we are rich. Therefore, increasing taxes causes prosperity. Such a view is completely ridiculous, yet almost completely unquestioned.

Or take the suggestion in the graph below. Income inequality sharply increased before two major recessions. Therefore it’s fair to assume that one causes the other.

Anarchy, State, and Utopia

Anyone who wants a free copy of Robert Nozick’s philosophical work can get a pdf copy here.

Don’t forget the comma before the “and” in the title!

Friedman Fest

Milton Friedman’s Free to Choose was one of the first books on libertarian political philosophy and market economics that I ever read. It’s an excellent chronicling of the economic and social decline of the United States (which has unsurprisingly run parallel to its embracing of ever more socialist policies).  Here are two videos doing the rounds at the moment that go into some basic Friedmanite concepts.

Announcements

There are a number of ways to make blog traffic statistics more impressive. On a slow day I often logout of my WordPress account, access the Liberty Forum homepage and click “refresh” over and over again to beef up the numbers.

I didn’t have to do that today. My post Trolling For Statism: How Not To Argue With Libertarians was featured on strike-the-root.com. Also featured on that excellent website were the posts Which Party Causes All The Wars? and False and True Connections Between Libertarianism and Conservatism.

I’m also happy to announce that the Irish Liberty Forum passed 20,000 blog views today. Keep it up guys!