Capitalist Ice Cream: The Flavours

There's a wide range of issues facing society that get dragged into the phantom ideological divide of left and right when the reality of life is that it doesn't care. Solutions exist. Some are better than others. Better is defined by how well it achieves its objectives. Those objectives are mostly subjective.

Largely though, the basic aims of a government and society, and the tradeoff of living in large populations of people with differing personal priorities, is to maximize the amount people can achieve and move beyond achievement that one individual could accomplish on their own. That is to say, build a mutualist environment in which everyone gains. Interpersonal trade is gainful and not zero-sum.

Minimum Wage

A big topic in capitalism is the government setting wages. This would be largely seen as "government interference" but let's take a step back and look at the wider context. What does it mean to earn a wage?

The expectation of the wage mechanism is fairly simple: someone works a job and then they get paid. There is a big assumption here: work a job, earn a living, live in society. But, if you don't earn a living wage you by definition cannot survive. You will not be able to afford the combination of food, housing and transportation required to continue working that job and provide for yourself.

So what happens if you don't earn a living wage? Someone has to pick up the slack. As long as the person is alive then by definition someone has to subsidize their insufficient income. They obviously aren't getting food and shelter through magic. Everyone else has to pick up the slack. This represents a corporate subsidy. It's not necessarily the government paying for it; perhaps it is the spouse, the parents but it can just as well be welfare cheques.

The point is that a business is having job positions filled and pay a wage that must be subsidized by people outside of the business. This should be considered a failed business if they require this sort of external money injection to survive. Solution? Implement a living wage for the minimum wage. Implementation? Phase it in over a 5-10 year time frame to allow businesses to survive. Point is, when businesses complain this will "cost the economy 10 000 jobs", actually what they really mean is "this will save society $100 000 000 a year through reduced welfare payments".

Wage Market

It's largely accepted that you get paid what the market will pay you. The interesting question here would be trying to figure out the objective. Someone works a job, they get paid. Okay but presumably the argument is that the compensation paid for labour somehow reflects the output of that labour. Does a wage market achieve this?

A wage market is all about supply and demand. A large supply of a particular type of labourer and the lower the wage they will earn. Unskilled menial labour may earn $5 USD/hour in the United States (Note: I think it funny that America pays wages so low it is illegal in Canada but we only complain about non-western nations with labour practices that would be banned in Canada). Highly sought after top-end software engineers can earn (with 5 years experience), on average, $130 000 USD/year.

One issue is that the compensation is not in direct relation to the worker's output. No matter how productive they would be paid the same under this system. In fact, it is reminiscent of discussions surrounding communist systems in which everyone is paid the same. Now, it's not exactly like communism: higher skilled individuals in a particular profession can fetch a higher compensation. But where they work does not affect their income. So why target jobs to maximize your value addition to a business? It doesn't matter. Does this mean that our worker productivity is hampered by the unwillingness of corporations to pay people what they are worth to them (rather than the market)?

Another is related with negotiations. Since compensation rates are argued via wage market realities they are not in relation to a particular job. This leads to unions that ask for the highest wage possible without concerning themselves with the specificities of a particular business's cash flow. Similarly, from the other perspective, businesses seek to lower wages blindly without any thought to loss of productivity. This is where we might see outsourcing even if the offshore workers produce absolutely nothing while getting paid, so long as they're paid less than Americans.

Tribal Economies

A continuing issue in Canada is the existence of six hundred something nations. Only a small portion (around thirty) have self-determination and self-rule, the rest are federally administrated (or just in some weird administrative limbo). At the heart of the concern is that the culture of these disparate communities are too foreign to interact with that of non-native economies. There are also underlying racial and ethnic undertones to the discussion but let's put those aside for a second. We assume to approach the issue in good faith only on economic grounds.

Foreign administration of these nations is largely a pointless endeavor born out from original British imperialism. It has no economic value to modern society and is in fact a significant drain on Canada (for everyone, not just natives). So what would be a simple solution? Let them rule themselves.

Provinces are able to handle a separate tax structure, land ownership and government as a layer just underneath the Federal government. Switching native lands over to this system (much like Nunavut, a very well run territory) would remove the bureaucratic overhead and allow business to flourish. As a part of the equalization programme, these territories (with additional rights for resources to reflect more similarity to provinces) are able to do as they wish without concern about "status indian" or approval from government or quintruple accounting of every dollar spent.

The concerns at hand are the construction of roads, hospitals, schools and then allowing banking institutions to lend money for business growth. Most banking is banned in native areas (individuals cannot obtain mortgages to even purchase a house) which seriously damages small business growth. The lack of a tax structure (separate tax revenue, ability to collect taxes for their own government, lack of an independent government in the first place) causes problems for development for something even as simple as charging builders' fee for the construction of condominiums and then collecting property tax. A simple way for most cities to earn money off prime real estate, almost all tribes are disallowed this income by law.

Additionally, it is assumed that since many of these tribes are communist, or semi-nomadic or whatnot that they cannot earn business income. I say... why not? Mongols in China/Mongolia can do it but an advanced western country like Canada cannot?

I do caution though that six hundred tribes means six hundred solutions. That is almost the best argument for self-rule for these nations. Imagine the bureaucratic nightmare to do anything semi-decent to run these communities.