"Supply Shock" vs. "Monetary Loosening"

       In 2021, inflation (understood to mean a rise in prices) began to rise sharply. One explanation of this phenomenon is that supply shocks (decrease in supply of goods) were responsible. That makes sense---less supply = higher price on a supply-demand graph. The other explanation was that the addition of new money (increase in supply of money) led to the inflation. That also makes sense. So is there any way of knowing which explanation is correct?

     Well, of course, both explanations could be correct. Both supply shock and monetary loosening could have been at work simultaneously to create the humongous inflation of recent years. However, I think the following can also be said: if supply shock were the only factor, one would expect that prices would return to pre-shock values. Granting that some degree of supply shock probably occurred, if prices don't return to pre-shock levels, then that is attributable to increase in the supply of money.

          Right?

Social Justice

What does "social justice" mean?

At first glance, it appears to  be a redundancy. Without a "society" (even consisting of only two people), the problem of "justice" simply doesn't arise. Isn't "social" the adjectival form of "society?"

Apparently not. Here's a definition of social justice pulled from the internet:

Social justice is justice in terms of the distribution of wealth, opportunities, and privileges within a society. In Western and Asian cultures, the concept of social justice has often referred to the process of ensuring that individuals fulfill their societal roles and receive their due from society. In the current movements for social justice, the emphasis has been on the breaking of barriers for social mobility, the creation of safety nets, and economic justice. Social justice assigns rights and duties in the institutions of society, which enables people to receive the basic benefits and burdens of cooperation. The relevant institutions often include taxation, social insurance, public health, public school, public services, labor law and regulation of markets, to ensure distribution of wealth, and equal opportunity.

First off, I notice that social justice entails distribution of property. "Distribution" seems to imply some super-social agency (group of people) who are empowered to determine who gets what. This would be in contrast to the organic results of the free market based on a propertarian justice system. 

How is social justice to be achieved? The methods listed are as follows:

1. Social insurance---the forcible inclusion of people in a social insurance scheme that entails taxation (i.e. the appropriation of property).

2. Public health---the forcible maintenance via taxation (i.e. the appropriation of property) of certain people as determiners of what scientific theories are to be considered "true" with the eventual goal of forcing people to obey their prescriptions.

3. Taxation---the levelling of incomes to produce more equality (accomplished by appropriation of property).

4. Public school---forced attendance at state schools maintained by taxation (i.e. appropriation of property).

5. Public services---forced use of public services paid for by taxation (i. e. appropriation of property).

6. Labor Law---forced adherence to legislated or administratively determined rules related to exchanges of property (i.e. goods and labor).

7. Regulation of Markets---forced adherence to legislated or administratively determined rules related to exchanges of property (i.e. goods and labor).

What is the key concept behind social justice? It seems to be that property rights will be abrogated. But this is the opposite of the meaning of justice!

Social justice = injustice.

How to Conduct Arguments Online (or in Any Other Medium/Situation)

1. Be Precise

Excessive and obscure verbiage leads to confusion.

2. Avoid Arguing Over the Meanings of Words

Not having the same definition of a key word in an argument leads to "arguing past each other"---each side is arguing a different topic. Many words have more than one meaning. Be sure you're not arguing past each other by a) defining words at the beginning of the argument, and b) stopping the argument as soon as misunderstanding due to different definitions of key concepts is detected.

Be open to the possibility that you can argue better by accepting an opponent's definition of a word (but if opponent is merely trying to define a concept out of existence, further argument may be futile).

Changing the definition of key terminology in the middle of an argument is an informal fallacy known as "equivocation."

3. Talk about Ideas, Not People

Arguments on the topic of political philosophy may devolve into arguments about politicians. An argument about a politician is a historical analysis. In order to argue about a historical analysis in a convincing way, the arguer will need to know a lot of facts to the point of being a specialist on the topic, as opposed to an argument about political philosophy where you only need to know the rules of logic.

4. Don’t Just Avoid Strawmanning

The straw man—where you erect and destroy an inaccurate caricature of your opponent's position—is one of the most common fallacies in online debates. 

You can't win an argument simply by demolishing your opponent's strawman versions of your argument. You have to set forth a persuasive argument, or you can't expect an opponent to be persuaded. 

5. Actively Steel-Man Your Opponent

As a corollary of "Follow the argument"(Plato, The Republic, 394d “…wherever the argument, like a wind, tends, there we must go”)---the idea that argumentation is above all a search for truth, you should proactively steel-man your opponent’s position, to help make their argument as strong as possible. Only by arguing against as strong an argument as possible can you be confident that you're getting at the truth.

6. Don’t Argue with Trolls

Not all who pose as arguers have the search for truth as their goal.

 A troll seeks, by various techniques, to manipulate an authentic arguer into degrading his logical argument to the level of an angry diatribe. When this happens, the troll has "won" (accomplished his goal for pretending to engage in argumentation).

Don't engage as there is nothing of value to get from that conversation, and it will only be a waste of your time.

7. Keep an Open Mind

As Hans-Hermann Hoppe has said, participation in an argument implies that the arguers can be convinced of the truth of an argument's conclusion by the logical validity and soundness of the argument. This is summed up in the motto "Follow the argument." In other words, when one participates in an argument, there must be the possibility not just of persuading others, but also of being persuaded oneself.

8. Know the Rules of Logic

Since the time of the Ancient Greeks, the methodology of argumentation has been logic.

(This post inspired by a post from Patrick Carroll, writing for FEE 9/23/22)

Is-ought and Its Relation to Hoppe's Argumentation Ethics

 Is-ought and Its Relation to Hoppe's Argumentation Ethics

Richard Opheim

Abstract 

     Hoppe's Argumentation Ethics (AE) purports to show that propositions related to justice can be logically justified. Previously, it had been more or less decided that Hume's Law prevented any apodictic conclusions in the realm of morals/ethics. How then, does Hoppe think that AE could make an apodictic contribution?

Intro

     As the purpose of all moral investigation (including justice) is to prescribe how humans should or ought to act, moral statements are sometimes called ought-statements. Depending on your preferred analysis of the language, an ought-statement is an imperative or implied conditional statement that tells its listener what he or she should do in order to conform to a moral rule. An is-statement, on the other hand, can be a fact or other kind of demonstrably-true statement.

Hume

     Hume held that philosophers who seek to use logic to prove the truth of moral statements are committing a logical fallacy:

“In every system of morality, which I have hitherto met with, I have always remarked, that the author proceeds for some time in the ordinary ways of reasoning, and establishes the being of a God, or makes observations concerning human affairs; when all of a sudden I am surprised to find, that instead of the usual copulations of propositions, is, and is not, I meet with no proposition that is not connected with an ought, or an ought not. This change is imperceptible; but is however, of the last consequence. For as this ought, or ought not, expresses some new relation or affirmation, 'tis necessary that it should be observed and explained; and at the same time that a reason should be given, for what seems altogether inconceivable, how this new relation can be a deduction from others, which are entirely different from it.”1

     So, Hume's Law states that one may not deduce a normative conclusion from non-normative premises.

Poincaré

     Then is it impossible to use an ought-statement in a syllogism?

“If both of the premises of a syllogism are statements with the verb in the indicative, the conclusion will also be a statement with a verb in the indicative. In order to obtain a conclusion with a verb in the imperative, it is necessary that at least one of the premises has a verb in the imperative.”2

     It's possible to deduce an ought-conclusion, as long as one of the premises is an ought-statement. However, there are no self-evidently true ought-statements, and so an ought-statement conclusion will never be apodictic.

Hoppe

     Hoppe's justice theory argument 3  (called AE for “Argumentation Ethics.”)  is as follows:

1. The answer to the question of what constitutes apodictically true rules of justice must be arrived at via the means of argumentation.

2. The act of argumentation presupposes that arguers have access to scarce resources. This has implications first of all for self-ownership: “… no one could possibly propose anything, and no one could become convinced of any proposition by argumentative means, if a person's right to make exclusive use of his physical body were not already presupposed.”

3. Argumentation also implies the right to claim unused scarce resources via first use (homesteading), since lack of the latter would make argumentation impossible. “By virtue of the fact of being alive, property rights to other things must be presupposed to be valid. No one who is alive could argue otherwise.”

4. “…[I]f a person did not acquire the right of exclusive control over … goods by homesteading, by establishing some objective link between a particular person and a particular resource before anyone else had done so, but instead late-comers were assumed to have ownership claims to things, then literally no one would be allowed to do anything with anything unless he had the prior consent of all late-comers.”

     As Hoppe's AE argument contained no ought-sentences, he claimed to have avoided the is-ought problem.4

     None of Hoppe's critics explicitly criticized AE for attempting to turn an is into an ought. 

Summary of Hoppe's AE and Is-Ought

     Hoppe had this to say about is- and ought-statements:

“Ought-statements cannot be derived from is-statements. They belong to different logical realms. It is also clear, however, that one cannot even state that there are facts and values if no propositional exchanges exist and that this practice of propositional exchanges in turn presupposes the acceptance of the private property ethic as valid. In other words, cognition and truth-seeking as such have a normative foundation, and the normative foundation on which cognition and truth rest is the recognition of private property rights.”5 

    Since the propositions of AE are is-statements, Hume's Law was not violated. Does this mean that Hoppe's AE has transcended the is-ought gap?“6  As Hoppe himself remarked:

“There is and remains a difference between establishing a truth claim and instilling a desire to act upon the truth—with ‘ought’ or without it. It is great, for sure, if a proof can instill this desire. But even if it does not, this can hardly be held against it.”7 

Notes

1.  David Hume, A Treatise of Human Nature, 295.

2.  Henri Poincaré, Dernières Pensées, 225. “Si les prémisses d'un syllogisme sont toutes les deux à l'indicatif, la conclusion sera également à l'indicatif. Pour que la conclusion pût être mise à l'imperatif, il faudrait que l'une des prémisses au moins fût elle-mème à l'impératif.”

3. First appeared in “The Ultimate Justification of the Private Property Ethic,” Liberty (September, 1988), but was subsequently elaborated in A Theory of Socialism and Capitalism, 1988.

4. Hoppe's AE was partially inspired by Habermas's Discourse Ethics which was already seen as a demonstration of an apodictic ought-argument that didn't trigger Hume's Law.

5. Hoppe, op.cit, 345.

6. "[H]e has managed to transcend the famous is/ought, fact/value dichotomy that has plagued philosophy since the days of the scholastics.” M. Rothbard, Liberty, November, 1988.

7. Hoppe, op. cit., 408.

References 

[1] Hoppe, H.H., “The Ultimate Justification of the Private Property Ethic,” Liberty (September, 1988).

[2] ___________, A Theory of Socialism and Capitalism, Kluwer, Boston, 1988. 

[3] Hume, David, A Treatise of Human Nature, Digireads.com. 2015.

[4] Poincaré, Henri, Dernières Pensées, Flammarion. 1920.

[5] Rothbard, Murray, “Beyond Is and Ought,” Liberty (November, 1988).

Universalizability and Hoppe's AE

 Universalizability and Hoppe’s AE

Richard Opheim

August 26, 2022

Abstract

A rule or general principle of ethics that has to apply to all human beings is “universalizable.” Can such a rule be demonstrably true? Or is it at best only a nice hypothetical conjecture?

Kant

In modern philosophy, the idea first surfaces in the writings of Immanuel Kant in the form of what he called “categorical imperatives”—moral rules that help human beings to decide what ends they should choose. He formulated his first rule as:

“I am never to act otherwise than so that I can also will that my maxim should become a universal law.”(1)

Basically, Kant’s reasoning boiled down to the definition of “law.” In order to be a law, a rule had to apply universally. Moral law was universalizable because it was a law. This is, of course, circular, and constitutes “proof by definition.”(2)

From Kant’s time on, the attitudes of moral philosophers fall into three categories:

1. Those who assumed universalizability without further proof.

2. Those who questioned why moral rules should be universal.

3. Those who attempted (unsuccessfully) to demonstrate that moral rules are universalizable.(3) 

Rothbard

Rothbard’s “ethics” are political; i.e., the ethics of interactions between human beings (“justice theory”). Within this restricted meaning of “ethics,” he attempted to show that the idea of universalizability is inherent in the idea of (interpersonal) ethics:

“. . . if we are trying to set up an ethic for man (in our case, the subset of ethics dealing with violence), then to be a valid ethic, the theory must hold true for all men, whatever their location in time or place.”(4)

Since “ethics” is defined as rules for all men, particularistic(5) rules are by definition not ethical. But this argument by definition still has to answer the question: Why can’t moral rules be particularistic?

Hoppe

Hoppe’s Argumentation Ethics (AE)(6) was, in brief, as follows:

1. The answer to the question of what constitutes apodictically true rules of justice must be arrived at via the means of argumentation.

2. The act of argumentation presupposes that arguers have access to scarce resources. This has implications first of all for self-ownership: “. . . no one could possibly propose anything, and no one could become convinced of any proposition by argumentative means, if a person’s right to make exclusive use of his physical body were not already presupposed.”

3. Argumentation also implies the right to claim unused scarce resources via first use (homesteading), since lack of the latter would make argumentation impossible. “By virtue of the fact of being alive, property rights to other things must be presupposed to be valid. No one who is alive could argue otherwise.”

4. “. . . [I]f a person did not acquire the right of exclusive control over . . . goods by homesteading, by establishing some objective link between a particular person and a particular resource before anyone else had done so, but instead late-comers were assumed to have ownership claims to things, then literally no one would be allowed to do anything with anything unless he had the prior consent of all late-comers.”

The above are sometimes referred to as the presuppositions of argumentation (PoA).

Criticisms of Hoppe’s AE Related to the Topic of Universalizability

1. Osterfeld

“[T]here is the possibility of intermediate communities. Isn’t it possible for members of community A to agree on their own set of rules regarding property, for members of community B to establish their own set of rules, etc.? And then isn’t it possible for representatives of communities A, B . . . N to agree, bilaterally or collectively, on the principles governing interactions between their communities?”(7)

It certainly is possible for different communities to have different rules of justice, and that is the actual state of the world we live in. However, Hoppe’s AE shows that particularistic rules are not logically justifiable and are therefore arbitrary.

2. Ethan Waters

“The task of those seeking to establish the libertarian ethic is not simply to show that people possess rights that must be respected at some times and in some ways, but to show that the rights must be respected universally, in all contexts and in all ways. Hoppe fails at this task, as others have failed before him.”(8)

Hoppe answered this objection in an expanded version of his argument as follows:

“. . . as argumentation implies that everyone must in principle be able to be convinced of it simply because of its argumentative force [correctness], the universalization principle of ethics can now be understood and explained as grounded in the wider ’a priori of communication and argumentation.’”(9)

3. Murphy and Callahan

"To simply declare that ownership rights must be ’universalizable’ is no help, either; after all, communists could cite the same principle to ’prove’ that everyone should have equal shares to all property."(10)

This criticism ignored #4 above in the PoA. Also, Kinsella responded as follows;

“[Callahan and Murphy] write here as if they are totally unaware that Hoppe has explicitly stated that ’the universalization principle only provides a purely formal criterion for morality’ . . . Of course, even if socialism’s principles were reformulated in a completely universalizable way, it will still be inconsistent with other norms presupposed in argumentation. . . ”(11)

MC:

“. . . Hoppe has only proven self-ownership for the individuals in the debate. This is because, even on Hoppe’s own grounds, someone denying the libertarian ethic would only be engaging in contradiction if he tried to justify his preferred doctrine to its ’victims.’ For example, so long as Aristotle only argued with other Greeks about the inferiority of barbarians and their natural status as slaves, then he would not be engaging in a performative contradiction. . . . It is tempting to respond to the above example by saying, ’That’s silly. If Aristotle tried to justify his views to a barbarian debating opponent, he would necessarily be engaging in contradiction. Therefore, his views are . . . unjustifiable.’ [I]f we accept [this response], then we must also admit that human ’domination’ of ’lower’ animals is also unjustifiable.”(12)

To which Walter Block replied:

“The argument from argument only applies to people who argue, and chickens, horses, babies and comatose people simply are not in it. As for non-Greeks (barbarians) they are certainly capable of arguing. If they do, they would commit a performative contradiction if they initiated violence against a Greek."(13)

4. Timothy Terrell:

“[D]efense of the self-ownership axiom relies upon the rule of ethics that an ethical system must apply equally to all people. If this rule did not hold true, a special entity or class of entities could own one or more people. No reason why this rule of ethics must hold true is presented—it is accepted on faith and is therefore subject to the criticism above. It is no defense to place the burden of proving the existence of owned people on the opposition, for neither Hoppe nor Rothbard present any compelling reason to believe that this universality rule should hold over any other ethical rule. No justification is offered other than the ’self-evident’ nature of these principles. To argue the universality rule based on a ’most people agree that. . . ’ argument seems to ignore grave epistemological difficulties.”(14)

By this time, Hoppe had long ago expounded the proposition that arguing implies universal acceptance of the results of argumentation,(15) but see also below.

Conclusion

Hoppe’s critics in general preferred to attack AE on grounds other than lack of universalizability. I suspect the reason to be that many of them may have understood that the argument based on argumentation has built-in universalizability:

Major premise: Logically justifiable rules of justice must be presented via an argument (self-evidently true).

Minor premise: No one can argue logically against the presuppositions of argumentation (true, because attempting to do so would result in a performative contradiction).

Conclusion: Rules of justice not based on the presuppositions of argumentation can’t be logically justified (follows apodictically).

As an apodictic conclusion must be universally applicable, and only rules of justice based on the PoA can be logically justified, one can say that they are “universalizable,” i.e., must apply to everyone that argues.(16)

Furthermore, since no explicit reference to universalizability is necessary in the AE argument, one might also say that AE makes the topic of universalizability (at least, within the realm of justice theory) obsolete.

Notes

1. Kant, Fundamental Principles of the Metaphysics of Morals, 402. A resemblance to the Christian Golden Rule, “And as ye would that men should do to you, do ye also to them likewise” (Luke 6:31), is frequently noted.

2. Kant’s Categorical Imperative makes a pretty good Hypothetical Imperative (a social rule that is attractive because of the ends that it seeks to attain, i.e. consequentialism), but Hypothetical Imperatives are not apodictic.

3.Hume's Law (explained elsewhere) states that such an attempt must be unsuccessful.

4. Rothbard, The Ethics of Liberty, 42. This claim seems to owe something to Hare, The Language of Morals, 162.

5. A term coined by Hare (Freedom and Reason, 18), meaning the opposite of universalizable.

6. First appeared in “The Ultimate Justification of the Private Property Ethic,” Liberty (September, 1988), but was subsequently elaborated.

7. Austrian Economics Newsletter, Vol. 9, No. 3, 9–10.

8. “Beyond Is and Nought,” Liberty, Vol. 2, No. 2, 47.

9. Hoppe, A Theory of Socialism and Capitalism, 131.

10. “Hans-Hermann Hoppe’s Argumentation Ethic: A Critique,” Journal of Libertarian Studies, Vol. 20, No. 2, 53–64.

11. Kinsella was referring to what Hoppe had written in A Theory of Socialism and Capitalism, pp. 157ff in which he expanded on the topic of the relation of the criterion of universalizability to other ethical requirements (“. . . the universalization principle only provides a purely formal criterion for morality.”).

12. Hoppe, ibid.

13. “Rejoinder to Murphy and Callahan on Hoppe’s Argumentation Ethics,” Journal of Libertarian Studies, Vol. 22, 631–9.

14. “The Origin of Property Rights: A Critique of Rothbard and Hoppe on Natural Rights,” (2000).

15. Hoppe, op.cit, 131.

16. The topic of universalizability arises from a desire to circumvent Hume’s Law which will be dealt with elsewhere.

References

[1] Block, Walter, “Rejoinder to Murphy and Callahan on Hoppe’s Argumentation Ethics,” Journal of Libertarian Studies, Vol. 22.

[2] Callahan, Gene and Murphy, Robert, “Hans-Hermann Hoppe’s Argumentation Ethic: A Critique,” Journal of Libertarian Studies, Vol. 20, No. 2.:

[3] Hare, R.M., The Language of Morals, Oxford University Press, 1952.

[4] _________, Freedom and Reason, Clarendon Press, Oxford, 1963.

[5] Hoppe, Hans-Hermann, “The Ultimate Justification of the Private Property Ethic,” Liberty (September, 1988)

[6] _________________, A Theory of Socialism and Capitalism, Kluwer, Boston, 1988.

[7] Kant, Fundamental Principles of the Metaphysics of Morals, London: Longman, Green & Co., 1895.

[8] Osterfeld, David, Austrian Economics Newsletter, Vol. 9, No. 3.

[9] Rothbard, The Ethics of Liberty, New York University Press, 2002.

[10] Terrell, Timothy, “The Origin of Property Rights: A Critique of Rothbard and Hoppe on Natural Rights,” (2000).

[11] Waters, Ethan, “Beyond Is and Nought,” Liberty, Vol. 2, No. 2.

A Few Considerations from Justice Theory Applied to Mandatory Vaccination

     Top-down mandatory vaccination is currently believed by some to be justified in that it allegedly prevents harm due to transmission of infectious disease. It is claimed that people have a right not to be infected with a disease and that this right trumps other persons' rights to self-ownership and other property rights. A consistent theory of property rights should resolve conflicting property rights claims, for that is the very justification for property rights, justice, and legal systems in general. Can top-down mandatory vaccination trump all other property rights? As far as I know, the case has not been made, only the claim asserted, so I won't try to create a strawman argument. Instead, I'll just consider how tort law concepts might be applied to the topic of disease transmission, as I believe the traditional tort law is closest to a just legal system. 

     1. The first legal category of infectious disease transmission is the case where one person unknowingly infects another. Such a case should not be considered tortious because of the long-standing legal doctrine that a person is not responsible for acts of nature. Example: a hurricane blows a tree off of your property which goes through your neighbor's window. You are not responsible, and the damage to your neighbor's property is attributed to the hurricane.

2. The second legal category is when one person knowingly attempts to infect and succeeds in infecting another person resulting in objective damages. This case should be considered tortious. In the tree-through-the-neighbor's window scenario, this would be equivalent to attaching the tree to a crane and swinging it over into the neighbor's window.

3. The third legal category is negligence. The formula can be complicated, but basically, the concept of negligence holds that if an injury is cause by the reasonably foreseeable consequences of a person's actions (or inaction), then that person may be guilty of "negligence." From a justice point of view, there is a problem with this category in that "reasonably foreseeable" is not an objectively-definable term. Cultural considerations may come into play when trying to apply the concept to real-life societies. Applying this to the tree-through-the-neighbor's window, it could in some societies be the case that you planted your tree too close to the boundary line between your property and your neighbor's, plus, perhaps, your neighbor's house had been built first before the tree was planted, and therefore you should have taken more care in where you planted the tree, etc. There are many possible considerations that could be taken into account.

     Of the three categories, "negligence" would seem to be the best idea for a "top-downer" to analogize to try to justify mandatory vaccination. However, in a just legal system, even admitting the category of negligence as grounds for prosecution in the case of disease transmission, the normal procedures of justice should still be followed. In other words, a specific plaintiff should sue a specific tortfeasor based on specific damages caused by the tortfeasor's "negligence."

Minimum Wage Rears Its Ugly Head Again

     A while ago, I commented on the minimum wage put into effect by the Arizona State legislature. It appears that my comment had no effect, as we still have a minimum wage here in AZ, and now they're even talking about instituting a higher one on the national level.

  Let's think about the logical implications of a minimum wage.

     When a minimum wage is instituted, the cost of labor rises. When costs rise, a business may or may not remain profitable.

     If a business is not profitable it will, sooner or later, cease business operations. In this case, the labor employed by the business will be disemployed and the capital (if any remains) will be set free to seek another line of production.

     If the business remains profitable, it may continue operations, but there is the question of the ROI. How is its ROI compared to other sectors of the economy? If it's lower, investment in the business may dry up, and the business eventually cease operations.

     On the other hand, the business owner may have various options to maintain profitability.

1. Automation. If the cost of labor goes up, the owner may find it feasible to replace (or speed up replacement of) human labor with machines. 

2. The owner may try to make his employees work harder or more efficiently with a view to using less labor. (Though why the owner wouldn't have already done that before the imposition of the minimum wage is puzzling.)

3. The business owner may try to pass on the increased cost to the customers. 

a. If the customers choose not to bear the addtional cost, the business ceases operations and labor is disemployed.

b.  If some customers choose to bear the additional cost, the business may continue operations, but employing fewer factors of production (including labor). 

c. If all customers choose to bear the additional cost, everything is ok, right? Wrong. Just because the business owner raised prices, doesn't mean the customer got a raise! The customer still has the same amount of resources (money) ante-minimum wage law enactment. If the customer chooses to maintain pre-enactment level of spending at a business that raised its prices due to the minimum wage law, that expenditure has to come out of another part of the customer's budget, and other economic sectors will be debited whatever is credited to the minimum wage-affected sector.

4. In an attempt to make an end-run around the difficult choices in #3, a business owner may engage in "shrinkflation" to try to lower costs. Instead of raising prices, the size or quality of the product is altered so that it costs less to produce.

     But the bottom line is that, after a minimum wage is enacted, the same amount of output is produced with more input; in other words, productivity decreases. This is a move in the direction of impoverishment.

     On the bright side, minimum wage labor is currently a very small sector of the labor force in the U.S., and will not likely cause great damage to the larger economy. Plus, as money loses its purchasing power due to inflation, the minimum wage sinks to the natural market level.

     The above analysis assumes ceteris paribus---"all other things being equal." Of course, in the real world, all other things are never equal. Such factors as rising inflation or changing demand can mitigate, offset, or mask the cost-raising effects of the minimum wage, but the fact remains that aggregate wealth would have been greater without it.