RE: Minimum wages, competition and 200 years of success.

[Charudatt <charu@iced.com>]

Sanjeev Sabhlok[SMTP:sabhlok@almaak.usc.edu]  wrote:

	I notice that some (almost all, surprisingly?!) members on this
list are
	suddenly quiet. Is it that people are not getting these
messages, or is it
	that people think that this list is my "mouth-piece" (false:
this is a
	discussion list; I only got it opened because of the great
discussions
	that were going on earlier; I could continue pouring out my
daily ideas
	into my book which takes much time to write and revise
constantly), or is
	it that everyone agrees to what I am saying, or is it that
people are too
	busy (I get to sleep only an average of 5 hours a day for weeks
at a time; 
	are you guys busier?). 

Speaking for myself, besides being busy,  like to take some time to
formulate my thoughts. Your writings do provide a kick in the butt for
me to think about this stuff more clearly but it doesn't come as fast
and clear since I haven't focused on this stuff for a while, and you've
been writing this book on the subject ;-).

OK, here are some thoughts in response to your minimum wage proposals:

Sanjeev Sabhlok[SMTP:sabhlok@almaak.usc.edu]  wrote:

	Lessons for us:

	a)	Keep minium wages to a low level, if it is necessary to
have them
		at all.

I think it is a good idea (at this stage at least) to separate a policy
stands from our perceptions of practicality of implementation. Thus this
minimum wage question to me is not whether we believe it is easy (or
impossible) to implement a minimum wage. I think there are 2 questions
here- first, do we believe that everyone willing to  work is entitled to
a fair wage? By fair I mean, a wage that reflects the value of the
service or goods created by this work. I think that this question has to
answered independently of the second question- how can we build a
society where everyone does get a fair wage.

IMO, it is counter-productive to questions on these issues in the form
"is this program/solution a good thing?" I would prefer to analyze the
underlying problems we're trying to solve first. In this case, I surmise
that minimum wages are instituted to prevent exploitation of workers. If
the prime purpose of an employer is to maximize profits (not an unlikely
scenario ;-), one way to do so might be to minimize wages. If the
employer has the power to do so e.g. is unchecked by powers equal or
larger than employer such as a representative government, a trade union,
an industry council, local competition for workers, or threats of
boycotts, the employer will pay less. An extreme example is slavery in
this country 150 years ago and other places more recently up to the
present in Sudan or even India.

If we agree that we oppose exploitation of employees by employers, as a
matter of policy, then this policy should stand independent of the
difficulty of implementing it. I take the view that to take a stand,
however unlikely the chance of success at least plants the seed of
possibility. Failure to take a stand on injustice _guarantees_ that it
will continue.

Now to the specifics of a minimum wage. I believe that we should have a
minimum wage since it represents the principle that people will not be
exploited by employers. That the implementation is difficult or has
failed in the past is not a good argument against the justice it
represents. If we were to scrap reasonable laws because they are hard to
implement, we would have a strong argument for legalizing bribery- after
all laws have been on the books forever and I don't see bribery
"withering away" any more than the state apparatus was supposed to do so
in a marxist utopia.

	This is the only fool-proof long-term way to succeed. The US has
handily
	beaten India **even after independence** in per capita income
growth, and
	it has kept up this performance over nearly 200 years. How can
one argue
	with such kind of success?
I don't think this argument is meaningful. About the time India became
independent, most of the industrial world was in post WW2 ruin and the
US had 80% of the world's manufacturing capacity enabling a huge export
generated economic boom under a command economy that was a continuation
of the wartime government control. The US's continued domination of the
world's economy by a number of devices but I think it is a stretch to
credit this to some inherent merit of it's political system rather than
a combination of accidents of geography and history. That said I don't
think such broad comparisons ( e.g. US governance vs Indian governance)
make sense where the subject matter is so large that it is beyond
analysis. I do however see value in analysis of directly comparable
models e.g. financing of local governments in the US vs. in India.

	A powerhouse of competition and creativity, is this USA, which
has
	attracted and continues to attract hordes of Indians (most of
the people
	on this list, for instance); people who abandon their dormant
and subsidy
	(beggary)-riddled motherland in favor of the land where you can
'make it'
	if only you compete hard enough.

 I doubt think this is less a decision over the way governments work and
more a case of going where the money is. It's nothing new. Historically
most migrations are driven by search for (more) wealth and resources.


	A manifesto cannot be built without participation and debate. I
thought we
	were supposed to tap into each other's brains and come out with
points and
	ideas. So, please become somewhat more active ...
Good point. 

-Charu