Actually here is a classic example from the Economist of what I call slave labour tactics… Karoshi – death by overwork.

There is nothing quite like a 3G and a laptop during a boring car trip.

No, you just assume I do. Unless you are anti-market-everything on this site, people will think that you put all you faith in the “holy market” and are some sort of free-market acolyte.

Note, I haven’t said the minimum wage is an inherently bad thing. Not once.

There are always a certain number of employers at the bottom end who for one reason or another are unable to improve the productivity of their organisation. They fall victim to what I refer to as slave-holder economics. Rather than improving the efficiency of their organisation using capital expenditure or improved systems, they simply use more employees while trying to drive wage rates down.

K- If you dig back into economic history you’ll find a lot of economic theory about this economic system, both on slave labour and various forms of indentured service (effectively the same). Adam Smith, for instance, wrote some interesting material on it. There is a lot of evidence that shows when this type of economic system gets entrenched, it eventually spirals down as close to zero wages as the legal system will allow.

Of course it isn’t good for the society harboring a slave culture on many levels. The biggest one is the debilitating effect of poverty on the poll of talent and skills in later generations. But even in the short term it prevents people with potential skills being used in more productive enterprises because of constraining techniques by slaveholder employers.

Slave holder employers use a number of interesting devices to hold their workers – typically debt mechanisms. Thats why there is quite a lot of law in every modern economies about valid uses of debt. It was how those societies crawled out of slave holder systems.

Of course, any competent employer doesn’t get affected by setting of minimum wages (as pointed out in some of the replies above) – they’re already paying more. The employers who bleat about minimum wage rates are exactly the employers you’d expect – slaveholders who are too damn lazy to work out more efficient ways of running their businesses. The government setting minimum wages is simply correcting a known historical economic trap to drive out bad or criminal employers.

K- You have an interesting set of delusions about the effectiveness of market economics. I’d suggest you look closer at the history of economic systems. In particular look at the early 20th century history of the Ford Motor Company – the start of ‘modern’ industrial systems. It was as much about how to drive wage rates up so people could afford to buy the gadgets that ford was selling.

The government can get the good publicity of increasing the minimum wage, which will satisfy their lap-dogs. But the actual impact will end up being negligible, so they dont actually have to worry about the negative impacts.

It’s a political free-roll.

Kind of like signing up to the Kyoto Protocol but never having any intention of meeting its targets. Of course, it would backfire if the figures which showed that the cost in carbon credits could be completely offset turn out to be wrong. Ooops.

The logical conclusion, therefore, has to be that minimum wage increases are perfectly logical and yet, paradoxically, totally unncessary

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