On 12 Mar 2004, at 2:16 am, Gautam Mukunda wrote:
Wages adjusted for the lower cost of living? Higher, certainly. The _total welfare of the society will increase_. Now, it's an entirely appropriate use of government power to tax the "winners" in this sort of free market friction to compensate the "losers". That's one of the things that government is for. But preventing companies from increasing their efficiency _decreases_ the total welfare of society. So you guarantee that there will be losers. You convert a positive sum system (one in which everyone can win) into a negative sum system (one in which all "wins" for anyone in the system force others to lose _more_).
It depends how it is distributed. I recall reading something about how the more socialist and redistributive taxation in Europe had caused growth to be slightly lower than in the US (as you argue), but that the poorest 25% in the US are actually worse off than their European counterparts. Of course that might be wrong, but the glib 'rising tide raises all boats' is questionable. The US certainly has a wider divide between the richest and poorest than many other developed countries, which makes it plausible.
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The market value of something is _whatever people are willing to pay for it_. If you found a new gold mine that allowed you to mine gold cheaply for one-sixth of the current price, you would put a lot of gold miners out of work. This would not be illegal. Are you saying that it should be? If you invented a new way to smelt steel with less labor and thus less expensively, you would put a lot of steelworkers out of work. That is not illegal. We only tax the steel if foreign companies sell the steel _below the cost of production_, because that is dumping. But we don't tax it if they are selling at a profit. Are you saying that making steel more cheeply should be illegal?
Or there is De Beers :)
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