"If You Have Time"
More questions from SolarxPvP
Here is another email from the Bet On It reader known on Twitter as SolarxPvP. Reprinted with his permission. I may reply when I return from Europe.
If you have time, I have some more questions/suggestions unrelated to Market Urbanism.
1. You have a bunch of older posts on the GMU website that need more attention. Also, at least one of them, the post on healthcare, has glitched up such that strange question mark boxes have appeared throughout the article. I have to go to the Wayback Machine on archive.org to see versions that aren't like that. I think it's time that they are updated so a new audience can see them without these issues. Do you agree that it would be a good idea to republish them on your Substack?
2. You have written a critique of the welfare state and why our priors should expect it to create problems because of the irrationality of the poor. However, while the arguments you give are plausible on their face, you didn't give any hard data on how the welfare state has harmed poor people overall. Perhaps some act irrationally and assume being on welfare is better than getting a job, but most are helped by it. Further, do private charities not face the same problems where their aid is used by people afraid of losing it? Some better data on how much the poor are helped or harmed by the welfare state is needed. I think happiness data on having a job might be relevant too.
I thought of this because someone posted this tweet with data that says that welfare helps the poor. Also, I'd like to see if there's any good empirical evidence that welfare hurts while private charity helps, and if there is a good reason why this is the case.
3. I have an objection to your ideas on labor economics most clearly expressed in "The Joy of Market Clearing Wages" that I don't think you've addressed yet. You say that approximately after subsistence-level wages, happiness doesn't go up too much. However, you never say when this exact level is. An extra dollar an hour matters more to someone making 7.25$ an hour than to someone making 50$ an hour. The question is how much, and you never really made clear whether giving an extra dollar amount to people increases happiness more overall than the unemployment effects. Wouldn't more people be affected positively by a minimum wage increase than the unemployment effect from the minimum wage? I think the case can be made for this from the empirical literature on the effects of the minimum wage on unemployment being mixed.
4. Building on that, I have an objection to your arguments against Scott Alexander on the bargaining power of workers vs. employers: diminishing marginal utility. Businesses and employers are richer than their employees the vast majority of the time. It seems like employers can afford to not have a worker more than a worker can afford to not have a job because employers have a larger financial safety net. Given that, how do employers not have more bargaining power over their employees?
5. Have you ever considered making a "reading" chart of sorts for the Huemer/Caplan style approach to libertarianism? I'm talking about something like this:
Except more focused on "common sense libertarianism" as a philosophy. It could include regular articles and the like rather than just books. Also, it could include readings on specific topics. One section could be for general philosophy where books like "The Problem of Political Authority" would be, another would include books on general economics like "Unbeatable" when it releases, and another would include readings on specific issues like "Fossil Future" and papers like Huemer's "Is There a Right to Own a Gun?" Each part could also include some easily digestible blog articles and interviews to get someone started.
This would help as a reference guide for someone trying to read the best arguments from our side.
6. Have you ever considered collaborating with Huemer to write a book defending Huemerian-style libertarianism against other forms of libertarianism? It could defend Huemerian ways of arriving at the truth as being better than Rothbardian, Hoppean, Objectivist, and utilitarian ways while also being better at rhetoric. You could focus on the economic part by arguing against Austrian economics. I know this is a pretty big project idea, but I thought it was worth it to share. It would help establish "Huemerian" libertarianism as a bigger school of thought and even change some minds.
I also like the reading chart idea!
“bargaining power of workers vs. employers: diminishing marginal utility. Businesses and employers are richer than their employees the vast majority of the time. It seems like employers can afford to not have a worker more than a worker can afford to not have a job because employers have a larger financial safety net. Given that, how do employers not have more bargaining power over their employees?”
Doesn’t the workers' bargaining power depend more on their alternative opportunities with other employers? Or are you saying that employers can collude explicitly or find a Schelling point that prevents them from competing for workers?
Who is richer seems irrelevant. I could be very rich, but have no bargaining power at all, or very poor but have an advantageous position, depending on the specific transaction. E.g., Bill Gates doesn’t have an advantage over other pork producers, unless his ability to wait counts as a significant advantage over producers with urgent need for cash flow. His ability to borrow could be an advantage, but that doesn’t seem to apply in the labor market.
What is bargaining power? It is the ability to walk away from a negotiation. The amount of money in the bank is at best only loosely related. I might have billions in the bank, but still face an urgent crisis that means I must negotiate or take a loss. Just because I can survive a loss doesn’t mean I like taking losses. And if I am on the verge of bankruptcy, I could still have bargaining power in a specific circumstance, if I have plenty of reasonably attractive alternatives.
Government policy seems related to the plausible sources of any bargaining power imbalance. E.g., one of the most significant costs of switching employers is the need to switch health plans. So workers that would find it hard to change insurers are incentivized not to change employers.