Monday, December 16, 2013


A wage is a price and adheres  to the invariant Law of Prices  — the winning bids of purchase and sale in the face of offers set the price

Employers are sellers of cash and credit who buy skills through time, which we call labor, or the "poor man's capital".

Workers are buyers of cash and credit, which we call wages and are sellers of expressed skills through time.

In most job markets, inter-employer competition has employers engage in English auctions for workers, while inter-worker competition has workers engage in Dutch auctions for jobs. 

In an English auction, the highest bidder wins. In a Dutch auction, the lowest bidder wins.

Where the winning bidders of employers and winning bidders of work seekers intersect, that is the clearing price, which, when it involves work, we call it a wage.

Both workers and employers get constrained by the Axiom of Profit — the sum of sales must at least equal the cost of production, otherwise the producer goes to ruin. 

In short, employers can bid up for workers only where what gets sold as the product from the workers exactly equals the cost to produce it. Likewise, workers can bid down for work only where what they get paid equals what it costs them to live.

There are too many no-skilled Americans Dutch-bidding themselves and not enough employers who need workers bad enough to train those workers or provide them capital precisely because there is too much regulation like minimum wage laws, workers' comp, social security; and too much welfare giving unearned buying power, both which interfere in the fair, just working of markets.


Someone shouted at me and cried, "Jobs are scarce!"

Jobs aren't scarce. Nothing is scarce. 

The earth is superabundant in natural resources, awash in resources, in fact.

The economy has the exact number of jobs needed given the distortions created by politicians by subsidizing inefficient production and transferring unearned buying power for protected classes of goods.

In short, jobs aren't scarce. Rather, there is a superabundance of talentless people who offer nothing in exchange to those who gain buying power by offering each other things wanted in exchange. 

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