buffon01

iTrader: (9)

The segundo one

Braineack

iTrader: (62)

okay, and how does this relate?

Joe Perez

iTrader: (8)

I have a really hard time actually conceptualizing what is "fair" with regard to payscales.

I mean, at a purely objective level, I am pretty massively overpaid. My "job" consists of about 50% sitting in a comfortable chair and listening to music while occasionally pushing a few buttons, and 50% flying around the world while consuming free alcohol and eating at nice restaurants, and occasionally pushing a few buttons.

It's not particularly challenging work as compared to, say, running into burning buildings or roaming around a very hot, sandy place carrying heavy gear all day as people shout at you in a foreign language and try to kill you.

But for some strange reason, certain people seem to place a very high value on knowing precisely which buttons to push and when. And it's not as though pushing the wrong button makes a trainload of newborn kittens and bromine pentafluoride derail and crash into a hospital burn ward.

The labor market is just funny like that.


Been doin' my part on the west coast to oppress all the messicans.

buffon01

iTrader: (9)

To the over paying of government jobs compared to the private sector.

Joe Perez

iTrader: (8)

Ah, yes. That's why so many of the people who I came into contact with during my extremely brief tenure as a law student were so eager to get out there and land high-paying jobs as public defenders or with the DA's office.

I hear that the waitlist for physicians trying to score one of the few and coveted positions at government-funded health clinics is pretty long, too.

chicksdigmiatas

iTrader: (11)

Buddies wife just got a nursing degree, 50k public sector, and 80k govt. It is insane military healthcare remains so shitty.

Braineack

iTrader: (62)

I'm on a gov't insurance policy. it's wicked. my last pair of glasses cost $8 of out pocket with every option I could get (anti-reflective, etc).

Vashthestampede

iTrader: (17)

My gf just ordered a new frame and lenses, not including the Dr visit it was just under $600. She has insurance from the pharmacy she works at, not sure which company though.

I'm gambling ATM myself. I lost my insurance right after my whole hand ordeal this past winter. I try and refrain from hitting anything and have stayed off the longboard since. I hope to get myself on a plan soon cause I'd hate to have something happen and be in the hole $20k+.

Braineack

iTrader: (62)

I have no copay for visits either.

miatamania

iTrader: (9)

lulz

Braineack

iTrader: (62)

The best way to sabotage chances for upward mobility of a youngster from a single-parent household, who resides in a violent slum and has attended poor-quality schools is to make it unprofitable for any employer to hire him. The way to accomplish that is to mandate an employer to pay such a person a wage that exceeds his skill level.

Imagine that a worker's skill level is such that he can only contribute $5 worth of value per hour to the employer's output, but the employer must pay him a minimum wage of $7.25 per hour, plus mandated fringes such as Social Security, unemployment compensation and health insurance. To hire such a worker would be a losing economic proposition. If the employer could pay that low-skilled worker the value of his skills, he would at least have a job and a chance to upgrade his skill and earn more in the future.

Minimum wage laws have massive political support, including that of black politicians. That means that many young black males will remain a part of America's permanent underclass with crime, drugs and prison as their future.

-Walter E. Williams

Chiburbian

iTrader: (1)

I cannot recall the exact numbers (oh hai!) but in Freakonomics there was a section where they talked about the wage earning potential of gang members.

I believe the average wage earnings of a low level street gang member was $3.30/hr. So here we have a situation where lower class entry level workers are WILLING to work for wages lower than minimum wage - yet legitimate enterprises are prohibited from doing the same. If employers were allowed to offer jobs for any wage mutually agreed upon by employees, eventually you would see a wage floor develop that benefits all.

Oh, and it's Sunday. On Sundays I take the day off from keeping the black man down. Tomorrow though - ooooh doggy!

buffon01

iTrader: (9)

Okay, you got me.

Joe Perez

iTrader: (8)

I can't see how this would "benefit all".

I have two parallel lines of thought in this, which I will present separately:


Rant the First:

Let's say that the minimum wage were decreased to $3.30, or abolished all together. What would the result of this be, apart from increased profits for corporations and their shareholders?

We'll pretend that I own a McDonald's restaurant, since it's a well-known company whose financial data are easily come by. McDonald's employs mostly "unskilled" workers, and we'll just assume for the moment that every worker is paid minimum wage. Once sufficient time has passed that I, along with all other employers of unskilled and formerly minimum-wage labor in my area, have gradually decreased the wages we pay our employees to whatever this "wage floor" is, what will be the result? Well, we'll have employees who are paid less.

Am I going to hire more employees? No, probably not. The ones I have were able to run my store when I was paying them $7.25 / hour, and their individual productivity isn't going to decline significantly at $3.30 / hour.

Am I going to lower prices? What motivation would I have for that? The demand for my hamburgers is relatively insensitive to price. Quite the contrary, in fact. During the period from 2006-2010, when the purchasing power of my customers was decreasing in response to a general downward trend in economic conditions, McDonald's total revenues increased from M$20,895 to M$24,075. This is thought to be attributable to customers electing to dine at McDonald's in lieu of other restaurants perceived to be more expensive, despite the fact that the retail menu price of McDonald's items did not, on the whole, decrease. For any given set of external economic factors, people are going to tend to buy the same number of Big Macs (or, in India, Maharaja Macs), regardless of whether they cost $3.20 or $3.05.

At the end of the day, the only reasonable outcome which I can see from this is that I, the store owner, will be taking home more money. It's also not unforeseeable that the parent corporation will increase my franchise fee in response to the increased net revenue of my store, and so they'll be able to pay out slightly higher dividends to their shareholders.


Rant the Second:

Since we were looking at the specific example of youth selling drugs for street gangs as an alternative to legitimate employment, how is this picture going to change either? Now, instead of having to choose between selling drugs for $3.30 an hour and flipping burgers for $7.25 an hour, those kids get to choose between selling drugs for $3.30 an hour and flipping burgers for $3.30 an hour?

Let's face it- getting hooked up in the drug trade is aspirational in nature. Just like the high-school athlete and the pretty farm girl from Wisconsin in the story you linked to, these kids aren't doing it for the immediate gratification of $3.30 an hour, they're doing it because A: being part of a gang buys you more street cred than wearing a paper hat, and B: they aspire to rise up within the organization and maybe, someday, be one of the guys driving around in an Escalade and throwing gobs of cash at hookers.

What, precisely, do you figure they'll aspire to while working at a burger joint, regardless of how low the barriers to entry? A "street tough" kid who may or may not have a functional grasp of literacy isn't going to be named store manager no matter how long he's been there, and even the store manager isn't driving around in a flashy car. He's making payments on his Kia.

Braineack

iTrader: (62)

The first:
Let's assume that a farmer owns a 100-acre tract of land on which he grows various crops. He employs one worker, whose sole piece of equipment is a hoe. The farmer pays the worker $10,000 per year and has additional expenses of $5,000. At the end of the year, the farmer sells his crops at market for $20,000, earning him a profit of $5,000.

Since the farmer has earned a profit of $5,000, he can use part of that money to give his worker a raise. But let's assume that a $5,000 profit is the minimum amount of profit that the farmer has concluded he needs to remain in business. Since farming is a risky business, one in which a crop could sell for much less than anticipated, the farmer just doesn't feel it's worth his while to engage in farming if he can't earn at least $5,000 for himself and his family.

Assuming that things stay the same from year to year, that means that the worker's income simply cannot go up. It must remain the same, given that the farmer lacks the financial means by which to pay the worker more money.

But what if the farmer can somehow increase production? Suppose he can double the output on his 100-acre tract of land? If he's able to do that, he's then able to give his worker a pay raise.

So how does the farmer pull that off? That's where capital comes into play. Each year, the farmer puts away $500 of his profit. After a few years, he uses his savings to purchase a used tractor. Now, the worker is no longer using a hoe. He's got a tractor to plant, cultivate, and harvest the crops. Let's say that production doubles, which increases the farmer's profit to $10,000.

That means that the farmer now has more money at his disposal to increase the pay of the worker.

Does the worker need to rely on the beneficence of his employer to guarantee the pay raise? No, because the worker knows that there are surrounding farms that are also employing workers. All that he has to do is check around and see what competing farms are offering and ask his employer to match it. If the farmer fails to do so, the employee can accept a competing offer, leaving his employer with no one to work on his farm.

Thus, the people who are among the primary beneficiaries of capital accumulation are the poor — those who are wage-earners at the bottom of the economic ladder. They have as much interest in the success of the company they're working for as the owner has. The more the company invests its profits in productive capital, the more profits the company stands to earn, enabling more money to be devoted to pay raises. Moreover, the more other companies are doing the same, the more they are able to bid up the real wage rates of the wage-earning class.


This principle applies not only in the trading of goods, but also in the trading of labor services. When an employer and employee enter into a labor agreement, each of them is giving up something he values less for something he values more.

The employer gives up a certain amount of money in exchange for the labor services of the employee. He values the money less than he values the work that the employee is performing.

By the same token, the employee gives up his time and labor in exchange for the money he receives from the employer. The employee places a higher value on the money than he does on the time and labor he's devoting to the employer.

There is an important economic principle involved here: Value is entirely subjective. It lies in the eyes of the beholder. The value that I place on a particular item is likely to be different from the value that you place on it. Thus, I might well be willing to pay a higher price for certain things than you would, and the same applies to you.

This principle of subjective value applies to employers when they're hiring employees. When contemplating whether to hire a certain worker, employers subjectively determine the applicants' value. By the same token, the subjective determination of the worker will determine whether he takes the job.

Whether a person is hired or not will ultimately turn on the subjective determinations of both employer and worker. An employer might think to himself, “That person is worth $5 an hour to me.” The worker might think to himself, “I'm worth $6 an hour.” If neither side budges, then no trade will take place. That means that the worker will not be employed at that business and must seek other employment where the employer says, “That worker is worth $6 an hour to me.” And the first employer has to continue looking for someone who will work for $5 an hour. There will be a meeting of the minds when each side gives up something he values less for something he values more, enabling an employment contract to come into existence.

This is an area in which liberals go astray. They simply do not understand the concept of subjective value. They think that everything and everybody has some sort of objectively determined value, one that can be legislatively imposed.

Let's consider an example. Suppose an 18-year-old man is looking for a job. He comes from a very poor family, dresses very badly, and speaks poor English. He has no work experience.

Everywhere he goes looking for a job, he is met with the same answer: No. No matter how many businesses he visits, he simply cannot get a job.

Finally, he walks into a business and says, “I'm willing to work for a dollar an hour. I'll do whatever you want me to.” For his part, the employer finds that offer extremely attractive. He has menial tasks to be performed and it is worth it to him to pay $1 an hour to get them done.

Thus, both sides — the employer and the worker — have arrived at a meeting of the minds. Each is willing to give up something he values less for something he values more. Their decisions are based on their subjective valuation of the elements being exchanged — labor and money.

Will the deal go through? Not today. The reason? The federal minimum-wage law, which requires employers to pay workers at a minimal rate of $7.25 per hour.

The reasoning employed by liberals goes like this: Nobody can survive earning a dollar an hour. To sustain one's life, liberals say, requires a minimal rate of $7.25 an hour. Therefore, liberals enact a law that requires employers to pay their workers that minimal rate. In the process, liberals portray themselves as great heroes for the poor.

But there's obviously a problem here, one involving subjective value. In our example, that 18-year-old is unable to find any employer willing to pay him $7.25. All they're willing to pay him is $1 an hour, a rate that he is willing to accept but is precluded from doing so because of the minimum-wage law.

What happens to that 18-year-old? As a result of the minimum-wage law, he goes unemployed, permanently. He simply cannot get a job at the federally established minimum because employers do not place that value on his labor.

That leaves the worker with the following choices: die by starvation, live on charity, engage in criminal conduct, or go on government welfare.

Keep in mind that when a minimum-wage law is enacted, the government does not require employers to hire people at that rate. Instead, what the government does is to require people who are hired to be paid at that minimal rate.

The obvious question arises with respect to subjective value: What happens to people whose labor is valued by employers at less than the governmentally established minimum?

The answer is as obvious as the question, but unfortunately it's one that liberals simply fail to consider. Those people are laid off and, even worse, permanently locked out of the labor market, assuming that valuations remain the same.

That is, as long as employers place a subjective value on the labor of unemployed people that is lower than the governmentally established minimum, those people are going to be out of work. Employers will simply refuse to hire them.

To make the matter clearer, suppose that Congress enacted a minimum wage of $1,000 an hour. Wouldn't that be a great thing for workers? No, because it's easy to see that lots of people would be laid off. The reason? Subjective value. All those workers whose labor is valued by employers at less than $1,000 an hour would be terminated.

Liberals will rail against this natural law of economics. They'll exclaim, “Every employer should place a high value on the work of employees. The value they place should at least equal the amount we set in our minimum-wage law.”

But that's not how life works. Again, value is subjective, not objective. Employers have their own personal, subjective valuations. For their part, so do workers.

Thus, in an unhampered market economy — that is, one unhampered by such governmental interventions as minimum-wage laws — there will be no permanent unemployment because people will be able to find jobs at wage rates that are acceptable to them and to their employers, even if it is at rates that liberals consider too low.

Liberals say that it is abhorrent that that 18-year-old would have to work at a dollar an hour. They say that no one could survive at that rate. They say that it's unconscionable that anyone should have to work at that less-than-subsistence wage rate.

But in their paternalistic approach to this situation, they block out of their minds some important things. Even though the young man is making only a dollar an hour, he's not only earning a bit of money he's also learning work skills and a work ethic. He's learning the business he's working for. He's building up his stock of knowledge, which will enable him to become more marketable down the road or perhaps even open his own business to compete against already-established businesses.

Braineack

iTrader: (62)

the second:

But when a teenager willing to work is locked out of the labor market, thanks to the minimum-wage law, he doesn't acquire any of those things. As a result of the supposedly good intentions of the liberals, the minimum-wage law locks him out of the labor market and relegates him to a life of charity, illegal activity (e.g., theft or drug dealing), or welfare.

Liberals cry, “But the boy could never survive on a dollar an hour.” Nonsense! There are all sorts of things he could do to make do, especially knowing that the situation is likely to be temporary. He could live with family or with a large bunch of friends who are sharing expenses. He would do what was necessary to survive during the time he was improving his work skills.

With their minimum-wage laws, liberals never give that 18-year-old a chance. With their supposedly good intentions, they make him permanently unemployable.

Is there a real-life example of this phenomenon? Last October the New York Times published a news story about runaway teenagers in America (http://www.nytimes.com/2009/10/26/us...away.html?_r=2), the number of which has soared because of family financial problems arising from the recession. Citing federal studies and experts, the article stated that 1.6 million juveniles become runaways annually.

According to the article, “Legitimate employment was hard to find in the summer of 2009; the Labor Department said fewer than 30 percent of teenagers had jobs.” The runaways supported themselves by selling drugs, panhandling, and prostitution.

Why weren't the runaway teenagers choosing to work at legitimate jobs to support themselves?

The answer: minimum-wage laws. There are no jobs being offered at low wage rates to 14-year-old runaways with minimal education, rates that many of the runaways might well be willing to work at. All the available jobs are being offered at the minimum wage because that's what the law requires. And employers simply do not place that value on the work of runaway teenagers who lack an education and work experience.

(A related factor here is teen work permits, another ludicrous regulation that most states require.)

Suppose there was no minimum-wage law. Then there would be all sorts of jobs being offered on the market at hourly rates of $5, $4, $1. Runaway teenagers would have an array of available options open to them from which to choose.

But those options are never permitted to come into existence because of the government's minimum-wage law. It relegates runaway teenagers to surviving by working in such activities as drug dealing and prostitution.

High wages

Liberals say that in the absence of minimum-wage laws, employers would pay everyone below-subsistence wages.

But that's obviously ridiculous, for the labor market is filled with instances of employers paying their workers more than the minimum wage. How do liberals explain that?

In other words, if employers would pay everyone below-subsistence wages in the absence of a minimum-wage law, why would so many employers today be paying many of their workers more than the minimum? Wouldn't you think that they would be paying the minimum amount established by law and not a penny more?

The answer lies, again, in the concept of subjective value. The reason that employers pay some workers higher than the minimum wage is that they subjectively place a higher value on the labor of such workers. Thus, some employers are willing to trade, say, $20 an hour in exchange for the labor of their employees.

Why would employers do that? Why not pay less rather than more, even if you place a higher valuation on the labor of the workers? Because there are other businesses that are competing for the labor of those workers, which tends to send labor rates upward.

Thus, it is in the interests of workers to have as many businesses operating as possible. More businesses mean greater competition for workers.

Yet, because of minimum-wage laws and other such governmental interventions, many businesses cannot survive. For example, a company that is barely operating at the margin cannot afford to give its workers a governmentally established pay raise. With the increase in the minimum wage, such a business has no choice but to close down, thereby laying off its workers.

Add to that all the businesses that have to shut down as a result of other governmental interventions. Among the people who are hurt are the poor because there are fewer businesses competing for their services.

Liberals operate under the quaint notion that such natural laws as the law of supply and demand can be repealed by public officials. They cannot be.

Minimum-wage laws are just one example among many of a government intervention that hurts the poor. Other examples include price controls, welfare, protectionism, licensure, and subsidies.

Good intentions don't matter and a lack of understanding of economic principles is no excuse. What matters are the actual consequences of government policy. Those whom liberals claim to love — the poor — are the ones who suffer the most from liberal economic policies.

Joe Perez

iTrader: (8)

This presupposes that the number of unskilled jobs available would increase if the minimum wage per job were decreased.

For the reasons I laid out above, I don't see that as a practical expectation. Giving corporations and franchise owners the ability to pay lower wages to unskilled workers would result in increased profit margins for the owners and shareholders of said businesses, but it will not magically increase the demand for unskilled labor. The McDonald's in terminal 2-B of the San Diego airport is already fully staffed.

Braineack

iTrader: (62)

So what if they do happen to make a higher profit margin? but who is to say they will only hire at minimum wage? Maybe they hire on janitorial staff for less, but the fry station makes a few more cents an hour? They could maybe then implement better wage increases based on performance for those who deserve it. You cant just assume because there is no minmum wage that eveyone will sudden work at that level. Some may, most won't.

But what would come out of it would be industry standards. If you find that Burger King is paying more than McDonalds, you'll work there instead...and maybe McDonalds will match wages just like Best Buy matches advertised retail prices.

I would predict food prices, clothing and manufacturing prices would drop significantly, no need to pay unskilled workers a wage way above and beyond their skill level just because the gov't mandated it. This would stop people working at the lowest level jobs and expecting it to provide your 50" plasma and 20" rims, as well as food for your 36 illegitimate babies. But at least they have a job to go to, unlike now where they are so disincentivized to do anything because of welfare and alike. Drop out of school, get a paycheck, make babies, is the new american concept.

And you gotta remember, minmum wage is also a relatively new concept to America. In fact, it was lobbied for on the premise to prevent newly freed slave from getting a job (irony?). Things our founding fathers did not have in mind. Maybe Alexander Hamilton, but no one liked him anyways.

Of course there are those who are much wealthier than others, THATS LIFE, but by the same token, those who are the poorest have a nice living standard. Everyone should understand that the high standard of living depends on the savings and capital accumulation engaged in by the very wealthy and by everyone else.

Hell, I remember when I worked at a bagel place and the minimum wage increased, they let the entire afternoon staff go (after school jobs for High School kids) and just made the morning crew work till 4 (Really poor Mexican ladies). A small business just cant raise prices because.

Think about how many more manufacturing jobs would come back to America...there would be enough jobs for all the americans AND all the mexicans.

The ones really benefiting from our minmum wage laws are the Chinese: http://www.oregonlive.com/business/i...rs_cash_i.html

Joe Perez

iTrader: (8)

Are you familiar with the concept of a Race to the Bottom?

The fact that the minimum wage exists, and that it is commonly paid, is evidence that there is a surplus of labor at that level of the market. If fry cooks were in particularly short supply, then the wage for fry cooks would naturally seek a higher level.

It's simple supply-and-demand economics. When there is a surplus of houses on the market, the average price of a home goes down. When a winter storm damages crops in Florida, the cost of orange juice goes up.

All that will happen here is that Burger King and McDonald's will jointly lower wages until people stop wanting to work as fry cooks (and seek employment selling crack for an average of $3.30/hr) or the government steps in and mandates a minimum wage.



I'll give you an example of the "exception which proves the rule". Here in California, we have the best burger joint ever conceived by man: In-n-Out. They are the best not merely in terms of the fact that they make the tastiest burgers in all the land (much better than those Big Kahuna burgers), but also because they are surprisingly altruistic for a fast-food joint. Their average starting wage is about $10/hr.

Now, from where I'm sitting, the nearest In-n-Out is at the corner of San Marcos Blvd and the 78. Sharing the same parking lot is a Chick-fil-A. Across the street are a Burger King and a Jack in the box, and just under the 78 overpass is a McDonald's. Guess how much these places pay. (Hint: it's not $10/hr.)

I'm sure that there is probably some attrition that goes on as employees of those other places (at least, those who can speak English fluently- this seems to be a requirement for working at In-n-Out) seek out the few and coveted opportunities to pump the hand-operator potato slicer under the warm, caring shadow of the Golden Arrow.

But like Falstaff's army, there are many assembled to take the places of the fallen.



Really?

You are seriously espousing the idea that there is something (short of firing squads or the gulag) which will prevent members of a certain demographic/sociological group within the US from feeling entitled to 50" plasma TVs, 20" rims, and food for their 36 illegitimate babies?





This is one argument that I see as at least being plausible.

Economic data on China is notoriously hard to come by. For starters, the minimum wage is not a national figure, but is set by the individual local government. And it is a monthly number, making direct comparisons to US labor even more difficult.

Assuming a conversion rate of US$1 = ¥6.52, the monthly minimum wage in Shenzhen is about $202 (the highest number I found), while in a Class C district of Chongqing, it is about $108. If we assume that the average Chinse worker puts in 300 hours per month (a number which represents a rough average of several sources), then the hourly minimum wage works out to between $0.36 and $0.67.

Now, in China as in the US, semi-skilled factory workers earn more than this. According to one source, the average hourly wage in the manufacturing sector was $1.36 in 2008, while another source observed a 2006 average of $0.81, and projected that this might rise as high as $1.98 in 2010. (You'd think I could find some actual data for 2010, but I can't seem to.)

Now, I'm just not sure how easy it's going to be to get people in the US to assemble lawnmower engines and built Li-Ion battery cells for $2 an hour, especially if you're not paying any kind of benefits at all. In fact, that sort of practice is exactly the sort of thing that caused labor unions to spring up in the 19th century.


I'm not sure that a reduction in minimum-wage alone is going to cause a resurgence of interest in onshore manufacturing. Maybe if you were to combine it with extremely heavy import tariffs (think 200%), then you'd have a shot at revitalizing American industry. But given the current state of the corporate lobby in Washington, do you see that as a realistic expectation?

Braineack

iTrader: (62)

So what if they do lower the price? does a fry cook justify the same price as say the cashier that handles money and is the public face of the company?

Lowering that price to $3.30 opens the doors up for that many more people whom otherwise could not get a job at $7.50.

3.30 > 0

you can't quote supply and demand, and then say it only works if the gov't gets invovled. That defeats the point.


I'm just saying that some jobs are not meant to put food on the table and support a 40 year old man and his 2 kids. Some jobs need to pay less than minimum wage. Minimum wage jobs effectively make it so the most unskilled homeless bum, every legitamate high schooler, and the entire middle class compete for the same job.

I will repeat, minimum wage was a tool used to prevent white business owners from employing newly freed slaves. This is fact.

Just like unions were a tool to prevent asain americans from working on the railroads.


no, because "social justice" is an awesome selling point to maniuplate voters into ******* themselves and polictians into more power.



Here's a good one for you Joe:

Let’s consider a hypothetical case based on science fiction. Astronomers discover that an inhabitable planet is hurtling toward our solar system and will soon join the other planets in orbit around the sun. Faced with overcrowding of its prisons, the federal government decides to exile 50,000 prisoners on a spaceship to the planet. Everyone is given six months of supplies on which to survive — food, water, and clothing — and nothing else.

When the prisoners arrive on the planet, they call into existence a federal government, democratically elected. Federal officials are empowered to do everything and anything they can to combat the extreme poverty that is immediately facing society.

Liberals are elected to the presidency and to Congress. They propose a massive welfare-state program modeled on Franklin Roosevelt’s New Deal and Lyndon Johnson’s Great Society. Social Security. Medicare and Medicaid. Public housing. Food stamps. Grants to education. Agricultural subsidies. Unemployment relief.

Do you see the problem? The federal government isn’t a fountain of wealth. It has no money. Its coffers are empty. In order to get the money to distribute all these welfare benefits to people, it must first impose a tax on people.

But do you see the next problem? There are no wealthy or even middle-class people who can be taxed because everyone in this society is poor.

The liberals come up with a novel solution. They adopt a system by which the government owns everything and by which everyone works for the government. People will be assigned houses to build, businesses to run, or places in fields to grow crops. Government officials will be in charge of planning everything — which crops will be planted, which occupations people will be assigned to, which houses will be built, which consumer goods will be produced. Central planners will distribute food, housing, clothing, and other essentials in accordance with the needs of each person and each family.

Everyone seems happy with the scheme, especially since it mirrors much of the prison life to which the prisoners had been accustomed. But a problem arises, one involving human nature. No one feels like working very hard. Agricultural workers are constantly getting sick. People are doing jobs for which they are ill-suited. Goods and services are scarce, and the situation is getting worse for everyone.

Actually, this hypothetical society isn’t far from reality. It is pretty much what happened when the first colonists arrived at Plymouth Rock. They formed a society in which most property would be collectively owned and shared.

The result? Starvation and famine.

One day, Governor Bradford changed the system. From that day forward, everyone would be entitled to own his own property and keep the fruits of his labor for himself and his family. No longer would people be forced to share their earnings with others.

Immediately, everyone began working harder and accumulating wealth. No more starvation and famine. The bounty produced by this private-property system formed the foundation for the first Thanksgiving.