T Nation

Keynes vs Hayek

This was an Orion post in another thread

I understand at least the basics of Keynes economics and understand why it could not be the lone driver of the economy

But with out Keynes applied principles why would not what we call Capitalism be strictly feudalism .

I probably won’t take every one’s opinion as fact but I am sincere :slight_smile:

[quote]pittbulll wrote:
This was an Orion post in another thread

I understand at least the basics of Keynes economics and understand why it could not be the lone driver of the economy

But with out Keynes applied principles why would not what we call Capitalism be strictly feudalism .

I probably won’t take every one’s opinion as fact but I am sincere :)[/quote]

I’m not sure I understand your question. Keynesianism and feudalism are very similar.

with out Keyne’s principals Capitalism would look just like Feudalism

[quote]pittbulll wrote:
with out Keyne’s principals Capitalism would look just like Feudalism [/quote]

How and why?

[quote]NickViar wrote:

[quote]pittbulll wrote:
with out Keyne’s principals Capitalism would look just like Feudalism [/quote]

How and why?[/quote]

the principals of supply and demand would dictate such an extremely low wage and with the on coming tech advances there will only be more useless people .

We would have a society that only people with money could get an education or that would not have to live at the mercy of some one with money

[quote]pittbulll wrote:
the principals of supply and demand would dictate such an extremely low wage and with the on coming tech advances there will only be more useless people .

We would have a society that only people with money could get an education or that would not have to live at the mercy of some one with money
[/quote]

Why do you think supply and demand would dictate an extremely low wage?

[quote]usmccds423 wrote:

[quote]pittbulll wrote:
the principals of supply and demand would dictate such an extremely low wage and with the on coming tech advances there will only be more useless people .

We would have a society that only people with money could get an education or that would not have to live at the mercy of some one with money
[/quote]

Why do you think supply and demand would dictate an extremely low wage? [/quote]

It could dictate a really high wage.

[quote]dmaddox wrote:

[quote]usmccds423 wrote:

[quote]pittbulll wrote:
the principals of supply and demand would dictate such an extremely low wage and with the on coming tech advances there will only be more useless people .

We would have a society that only people with money could get an education or that would not have to live at the mercy of some one with money
[/quote]

Why do you think supply and demand would dictate an extremely low wage? [/quote]

It could dictate a really high wage.
[/quote]

if you take all the people , some lazy , some old , some disabled off of public assistance and you add them to the people that are already looking for a job . You have possibly 30% of the population I will do the job for $5 ,Bill will do it for $4 , Sam will do it for $3 , Tom will do it for $2 and our present economy would collapse and would not effect the welthy one bit.

I do believe it would reach a lot farther into the ranks of employed than most believe

[quote]usmccds423 wrote:

[quote]pittbulll wrote:
the principals of supply and demand would dictate such an extremely low wage and with the on coming tech advances there will only be more useless people .

We would have a society that only people with money could get an education or that would not have to live at the mercy of some one with money
[/quote]

Why do you think supply and demand would dictate an extremely low wage? [/quote]

We had what is called a jobless recovery from the past recession . Look at the market . never been higher but the jobs do not reflect the same robustness

[quote]pittbulll wrote:

[quote]usmccds423 wrote:

[quote]pittbulll wrote:
the principals of supply and demand would dictate such an extremely low wage and with the on coming tech advances there will only be more useless people .

We would have a society that only people with money could get an education or that would not have to live at the mercy of some one with money
[/quote]

Why do you think supply and demand would dictate an extremely low wage? [/quote]

We had what is called a jobless recovery from the past recession . Look at the market . never been higher but the jobs do not reflect the same robustness
[/quote]

This is why I do not believe we are in a recovery. This is just the Fed pumping money into the economy to make it look like we are recovering.

[quote]pittbulll wrote:

[quote]dmaddox wrote:

[quote]usmccds423 wrote:

[quote]pittbulll wrote:
the principals of supply and demand would dictate such an extremely low wage and with the on coming tech advances there will only be more useless people .

We would have a society that only people with money could get an education or that would not have to live at the mercy of some one with money
[/quote]

Why do you think supply and demand would dictate an extremely low wage? [/quote]

It could dictate a really high wage.
[/quote]

if you take all the people , some lazy , some old , some disabled off of public assistance and you add them to the people that are already looking for a job . You have possibly 30% of the population I will do the job for $5 ,Bill will do it for $4 , Sam will do it for $3 , Tom will do it for $2 and our present economy would collapse and would not effect the welthy one bit.

I do believe it would reach a lot farther into the ranks of employed than most believe
[/quote]

Or,

If the lazy & elderly knew they wouldn’t get assistance from the government they very well might be more responsible financially throughout their life. For example, my retirement plan does not include Social Security even though I’ll be entitled to it. I, however, am not relying on it because, well, that’s pretty foolish.

Do you really think about 94 million people would be looking for work if gov assistance didn’t exist? (That’s 30% of the pop)

If you, Bill, Sam, and Tom all have zero marketable skills you might be fighting over a low wage, but if Bill understands how to wire the electric in a house, Sam is profecient at computer programming, Tom is an excellent car mechanic, and you are a great cook each of you has a skill that demand more than $1/hr.

As far as the lazy people goes, I don’t exactly feel bad for them.

[quote]dmaddox wrote:

[quote]pittbulll wrote:

[quote]usmccds423 wrote:

[quote]pittbulll wrote:
the principals of supply and demand would dictate such an extremely low wage and with the on coming tech advances there will only be more useless people .

We would have a society that only people with money could get an education or that would not have to live at the mercy of some one with money
[/quote]

Why do you think supply and demand would dictate an extremely low wage? [/quote]

We had what is called a jobless recovery from the past recession . Look at the market . never been higher but the jobs do not reflect the same robustness
[/quote]

This is why I do not believe we are in a recovery. This is just the Fed pumping money into the economy to make it look like we are recovering.
[/quote]

Our business is very brisk. We are looking to hire but not willing to pay much so we are stuck training a new group every other week. The labor pool in this town is very wide but not too deep.

[quote]pittbulll wrote:

[quote]usmccds423 wrote:

[quote]pittbulll wrote:
the principals of supply and demand would dictate such an extremely low wage and with the on coming tech advances there will only be more useless people .

We would have a society that only people with money could get an education or that would not have to live at the mercy of some one with money
[/quote]

Why do you think supply and demand would dictate an extremely low wage? [/quote]

We had what is called a jobless recovery from the past recession . Look at the market . never been higher but the jobs do not reflect the same robustness
[/quote]

Jobs market is more competitive than 10 years ago, believe me, I know. I think this makes wage bargain more difficult (the power is in the employers court), but I also don’t think an artificial floor (minimum wage) is why skilled laborers make more than the minimum. Accountants out of college don’t make $25/hr because there is a minimum wage.

[quote]usmccds423 wrote:

[quote]pittbulll wrote:

[quote]usmccds423 wrote:

[quote]pittbulll wrote:
the principals of supply and demand would dictate such an extremely low wage and with the on coming tech advances there will only be more useless people .

We would have a society that only people with money could get an education or that would not have to live at the mercy of some one with money
[/quote]

Why do you think supply and demand would dictate an extremely low wage? [/quote]

We had what is called a jobless recovery from the past recession . Look at the market . never been higher but the jobs do not reflect the same robustness
[/quote]

Jobs market is more competitive than 10 years ago, believe me, I know. I think this makes wage bargain more difficult (the power is in the employers court), but I also don’t think an artificial floor (minimum wage) is why skilled laborers make more than the minimum. Accountants out of college don’t make $25/hr because there is a minimum wage.[/quote]

IMO if you did away with all Keynsian principals Accountants would be a worthless profession .
All you would need is basic math .

Right now I am working for a contractor of a union shop. The union dictates I must be paid Union scale (HIP HIP HURRAY) other wise I would be working for half of what I would normally make in a right to work state .

If they were to take away that stipulation wages would plummet . My job does not take a lot of skill but it is a very safety sensitive job

[quote]Testy1 wrote:

[quote]dmaddox wrote:

[quote]pittbulll wrote:

[quote]usmccds423 wrote:

[quote]pittbulll wrote:
the principals of supply and demand would dictate such an extremely low wage and with the on coming tech advances there will only be more useless people .

We would have a society that only people with money could get an education or that would not have to live at the mercy of some one with money
[/quote]

Why do you think supply and demand would dictate an extremely low wage? [/quote]

We had what is called a jobless recovery from the past recession . Look at the market . never been higher but the jobs do not reflect the same robustness
[/quote]

This is why I do not believe we are in a recovery. This is just the Fed pumping money into the economy to make it look like we are recovering.
[/quote]

Our business is very brisk. We are looking to hire but not willing to pay much so we are stuck training a new group every other week. The labor pool in this town is very wide but not too deep.
[/quote]

There are businesses that are doing well, and there are some that are cutting back. If you took all the money out that the Fed keeps pumping in the real GDP would be near zero if not negative. Oil and Gas companies are doing really well on private lands. If Obama really wanted jobs then open up public lands for E&P and we would have a ton of jobs, and we would use our natural resources to fund the government. It is a win win situation. Jobs and Revenues to the Government.

[quote]pittbulll wrote:

[quote]usmccds423 wrote:

[quote]pittbulll wrote:

[quote]usmccds423 wrote:

[quote]pittbulll wrote:
the principals of supply and demand would dictate such an extremely low wage and with the on coming tech advances there will only be more useless people .

We would have a society that only people with money could get an education or that would not have to live at the mercy of some one with money
[/quote]

Why do you think supply and demand would dictate an extremely low wage? [/quote]

We had what is called a jobless recovery from the past recession . Look at the market . never been higher but the jobs do not reflect the same robustness
[/quote]

Jobs market is more competitive than 10 years ago, believe me, I know. I think this makes wage bargain more difficult (the power is in the employers court), but I also don’t think an artificial floor (minimum wage) is why skilled laborers make more than the minimum. Accountants out of college don’t make $25/hr because there is a minimum wage.[/quote]

IMO if you did away with all Keynsian principals Accountants would be a worthless profession .
All you would need is basic math .

Right now I am working for a contractor of a union shop. The union dictates I must be paid Union scale (HIP HIP HURRAY) other wise I would be working for half of what I would normally make in a right to work state .

If they were to take away that stipulation wages would plummet . My job does not take a lot of skill but it is a very safety sensitive job
[/quote]

I’m not a Keynes expert at all, but I don’t think his concepts would affect accounting very much at all. Double Entry accounting pre-dates him by a couple hundred years minimum. Accounting might not be as detailed/comprehensive, but the profession would still be relevant. There is a lot more to accounting than just ensuring compliance with fed/state regulation.

I don’t know how Keynesian economics ties to union labor. What I do know is that often times labor union wages are not tied to demand. You need look no further than Ford for an example.

The bottom line is:

Skilled labor typically demands higher wages.

Unskilled labor = low pay (with some exceptions like union labor).

[quote]usmccds423 wrote:
The bottom line is:

Skilled labor typically demands higher wages.

Unskilled labor = low pay (with some exceptions like union labor).

[/quote]

I agree , but if you did away with all Government programs , it would cut alot of jobs , Lawyers and Accountants .

Wages would plummet basically the economy would go to hell. I could see an economy of barter emerge but it would probably go from those with no money going to those with a little money

Probably a new industry of private security

[quote]pittbulll wrote:

[quote]usmccds423 wrote:
The bottom line is:

Skilled labor typically demands higher wages.

Unskilled labor = low pay (with some exceptions like union labor).

[/quote]

I agree , but if you did away with all Government programs , it would cut alot of jobs , Lawyers and Accountants .

Wages would plummet basically the economy would go to hell. I could see an economy of barter emerge but it would probably go from those with no money going to those with a little money
[/quote]

Lawyers yes. Accountants no.

What exactly do you mean by “all Government programs?” Are we talking no governmnet, just labor laws, what?

I strongly disagree that economic prosperity is tied to government programming. Nor do I think wages are tied to government programs.

No gov = bad idea
lots of gov = bad idea