Mangled Thoughts

Des Moore and Ray Evans each made a submission to the July hearing of the Fair Pay Commission (1,2). Being absent of economics, the submissions are revealing for entirely different reasons.

1.Des Moore, Submission to the Fair Pay Commission on the Minimum Wage, 18^th, July, 20062.2.Ray Evans, Submission to the Fair Pay Commission, 28^th, July, 2006.

The HRNS’ failure in labour market reform is not simply the errors already summarised (1). It has only conceded the entire ACTU case against labour market reforms, and damaged much else besides. No wonder the ACTU is having a jolly time of it attacking the Cabinet. An electrifying paper by Des Moore to the HRNS’ 23rd annual extravaganza conference, sums up what the HRNS have done (2).

The paper’s doubled subject is ‘welfare effects’ of ‘minimum wages’ (not effective minimum wages), and “why Card and Krueger are wrong”. He should have left both well alone. Moore declares, “minimum rates’’ might be inadequate to maintain living standards. Governments, he continues, should maintain them by transfers. For, minimum rates delivers unemployment, and not having a job is worse than lower consumption.

Moore seems to reduce welfare to merely having a job. If an employer were to offer, say, $1 an hour, a job seeker should be grateful for it? Never mind, says Moore, the Govt.(!) can pick up the tab for the difference between a pittance and the market rate (though Moore, doesn’t have a clue about market rates).

So, Moore pronounces, a minimum wage rate yields unemployment, and it is having a job that counts. Never mind about the reason why so many get up every day and work in enterprise, government will take care of that. (The ACTU must have really enjoyed reading this.)

Moore’s mutterings on transfers, amounts to another moralising demand for redistribution (income transfers), which may delight the left but few others. Yet, there is a troubling exception:

Unemployment ‘benefits’ are compensation to all those made unemployed due to the imposition of effective minimum rates. Moore has nothing to say on this, nor against those responsible for 100% cuts and the need to compensate the victims, the ACTU, and compliant politicians and bureaucrats. (Economists, frustrated at the HRNS wrecking the free labour market case, are equally disgusted with Federal Cabinet Minister Joe Hockey calling the victims of the Unions ‘dole-bludgers’ and telling them to tramp all around Australia, as so many vagabonds, in search of a job. (3) )

Moore is oblivious to: Capital delivers ‘living standards’ (’welfare’, ie. consumption), and capital accumulation raises them. Moore doesn’t see Govt. transfers don’t do the work of capital accumulation.

Moore also conceded another false claim employers have a balance of power over employees. Is this why Moore decided to show “why Card and Krueger are wrong,” in a trivial, inchoate, lengthy ramble on monopsony. Well, Moore did manage to copy down the standard textbook definition of monopsony.

Apart from other troubles, Moore didn’t spot a crucial qualification that Bellchamber and Gregory attempted to obscure. Jackson lifts it out in a swift stroke:

“…Card (et al)…only suggest … when the minimum wage is ‘low’… rises will have little effect on employment. Nowhere did Card actually say that raising wages above the market level will not cause unemployment.” (4)

A rise in the minimum (not the effective minimum rate) that leaves it an ineffective rate is not destructive. Jackson has written further devastating assessments of Bellchamber, Harcourt, and Card and Krueger.

Another problem is the notion of monopsony rests on the fallacy of perfect competition, against which Jackson has also written (5). Another excellent paper is by Block and Barnett II (6).

Moore concedes the ACTU false claim of “balance of power”, which is pinned to the error of indeterminacy of rates. The ACTU latched onto Card and Krueger in an attempt to lend credence to it.

Moore, in ceding indeterminacy, and asserting that ineffective minimum rates are destructive and should be eliminated, ceded the ‘power’ claim. That is what t.v. viewers saw, when Hugh Morgan, told Australians, ‘you are being paid to much’ (because the “ratio” is too high (7)).What has he said but this:

Employers should be free to drive down rates, and deny employees ‘just’ wages’.

He has only managed to give every ACTU ‘reason’ for:

1. Effective minimum wages.
2. Unionised closed shops.
3. Institutional regulation of markets.
4. Union ‘protection’ of employees from ‘exploitation’ by unscrupulous thugs – employers.

It hasn’t gelled with Des Moore that in free markets there is neither monopsony, nor oligopsony. That, neither employer nor employee has power, there is no power to be balanced – competitive markets and the marginal productivity of labour explains why, and why labour is justly paid.

Moore’s paper shows laziness. Compare the extensive references Jackson has supplied in Labour Wars, and the bibliography in the Block and Barnett paper. Those gentlemen are abreast of the literature, and case studies; Moore is not. Yet, this only a part of Moore’s, and the HRNS’ overall incompetence.

Moore has felt important waxing long on grave matters others have merely treated soundly and with precision. Moore has set out what the HRNS has been saying for some 20 years now. No wonder the ACTU likes the HRNS - they are advocates of the ACTU’s entire anti -free labour market case. Brilliant!

1. The HRNS errors summarised in Michael Kroger and His “Brains Trust” – The HR. Nicholls Society, but for thorough explanation, Gerard Jackson, Labour Wars, linked in that item.
2. Des Moore, Minimum Wages: Employment And Welfare Effects, Or Why Card And Krueger Were Wrong, HR Nicholls Society XXIII Conference.
3. Joe Hockey, Federal Cabinet Minister for the Department of ‘Human Services’. Besides other schemes, Hockey and the Dept. are responsible for administering unemployment benefits.
4. G. Jackson, Labour Wars, p.17.
5. G. Jackson (eg.) Monopsony versus labour: our right wing lets us down again. Brookesnews. Also in Labour Wars.
6. Walter Block and William Barnett II, An Austrian Critique of Neo – Classical Monopsony Theory. Block and Barnett II draw the same conclusions as Jackson. They also engage in a thorough examination of the false assumption on which monopsony, and oligopsony rests, ‘perfect competition’, to show monopsony is pseudo economic theory.
7. ‘Ratio of the minimum wage to the median wage’: when it is too high, unemployment ensues (positive correlation). The ‘ratio’ is the HRNS’ ‘solution’ to the (false) dilemma of indeterminacy, and why unemployment.

rather many who count themsleves as good and true, defenders of freedom, even sanity, would never make a movie like this because, they can’t even fight their way out of a paper bag equipped with a self-propelled chain-saw ( just push the green button). So, someone else, somehwere, had the pick up and go to do something right, in, above all places, Canada! I aks you,Canada.

It’s about a destitute Romanian miner who, fed up, is using his pick against greenies.

An unemployed Romanian miner who is flown across the globe to confront environmental activists is the unlikely star of a Michael Moore-style film, aimed at debunking the militant green movement.

Gheorghe Lucian, 23, is a plain-speaking resident of an impoverished village where an opencast gold mine is planned…

 where unemployment is 70 per cent, is being blocked by environmentalists.

Among them is the actress Vanessa Redgrave, who used a film festival awards ceremony in June to denounce the mine project

During the hour-long film, Françoise Heidebroek, a Belgian opponent of the Rosia Montana mine, says Romanian villagers prefer to use horses rather than cars, and to rely on “traditional cattle raising, small agriculture, wood processing” to live.

Locals retort that their land is too poor for farming, that they all want cars and that they are desperate for the investment the mine would bring. The film had its first screening last week at a conference of gold-mining companies in Denver, Colorado. Alan Hill, president of Gabriel Resources, which did not control the film’s content, said: “Before, the environmentalists would lob mortars at us and we would keep our heads down. Now, there is a big push back.”

Back home again, Mr Lucian is living with his parents and four siblings in a dilapidated one-bedroom flat. “Rosia Montana is very interesting for everybody like Greenpeace and NGOs,” he said. “But these people do not ask what we need. People here have no food, no money.”

This, on  a day when a nature worshipping Melbourne outer urbs Council spent a fortune littering a suburb with water guzzling ’native’ tree sapplings, to arrest man changing the climate by exuding a bit of harmless, and very good for all things, Co2.  What should be done is a permanent ‘exhange programme, those ‘councilors’ put on a plane to exchange all they have, never to return,  for the delights of living in a village called destitution and the residants of the village take over those moron’s high life. Come to that, so can Bracks and his greenie cabinet, and, as it turns out, many who style themsleves Liberals”.

In the meantime, thanks to the cult of Nature politicians have imposed, most of us can look forward to dying of thirst.

Why do union officials smile and giggle at the names, Des Moore, Ray Evans, et al. (Kroger’s ‘brains trust’), and call them “clowns” and pompous asses? Why would an executive, rolling his eyeballs and giggling, say, their economic advice is “instant ruination”? Why could Bellchamber write a mushy article dedicated to trampling all over Des Moore? Why, a female journalist told me, does the media refer to the HRNS as Des Moore’s “pr. agency”? Reading only 3 articles on the HRNS website told me why.

The HRNS have damaged the Victorian Liberal Party. They have single-handedly demolished the otherwise sound, highly moral measure of freeing labour markets, leaving Federal Cabinet hanging and panicking. It has not only dominated the Liberal Party in Labour markets, for now 2 decades, but in other matters too. The HRNS is Kroger’s creature, his “second brain”, and for that reason it’s time to poke into the HRNS, by items dedicated to these brains of the Victorian Liberal Party.

These items are not about, eg., their disastrous failure in labour market reform as such. It is clear what their failure is; the absence of sound economic theory. It is about why they failed, spectacularly, to serve the Cabinet in such a grave matter. It is, however, only part of the overall damage they have inflicted within the Victorian Liberal Party. These items on Kroger and his ‘brains trust’ are about them.

The reason is due to their position in the Victorian Liberal Party under Kroger. In view of the items on Kroger and his parasite party, expansion is redundant.

Disclosures from well-placed sources – union officials, senior executives in large enterprises, some of whom are also economists, a lady journalist, senior Liberal Party figures, and retired successful stockbrokers, have stirred the old curiosity noodle. The information is ripe stuff.

Very soon after Hugh Morgan’s pathetic ABC interview, to launch the Cabinet’s labour market reform bill, the HRNS was dropped as Cabinet’s advisers. A senior Liberal figure told me something that only confirmed it:

The Minister, Mr. Kevin Andrew will not have the HR Nicholls near Cabinet, his office, not even from afar on the end of a telephone, emails, or letter post. One of his staffers calls them “moribund”.

The staffer would not say so unless he had Mr. Andrews approval. “Moribund’, that’s given as an exaggeration.

Some time before, a union official, smiling, informed me:

“Is the Liberal Party stupid to let them dominate economic affairs in the Liberal Party? Is the cabinet mad to have taken them as their advisers on labour markets? Not that we are dissatisfied. To the contrary, we are pleased that they are so stupid. ”

Another Union Official smiled while remarking:

“Des Moore is considered a clown, and Ray Evans a pompous buffoon in the Unions.’’

Not just by ACTU and Trades Hall heavies, but also by lowly Union hacks. The official ended by putting a question, “Why are they so ineffectual?”

In conversation with a senior executive, about a large scale undertaking completed some time ago, we were discussing the economics of it. I inquired of what proposals they’d received, and the selection of advisers. He giggled as he related:

“Well, someone did, initially, engage some ‘advisers’ from the IPA. When we looked at their proposal, and their case, a few of us made sure they were cut right out because, it was not merely nonsense, it would have been ruinous, a complete disaster.”

He giggled all the more, as he added: “That associate of Evans and Moore in the IPA still boasts, all around Melbourne, of being responsible for this (successful undertaking). He’s a standing joke between all who know.”

(The IPA being just another outlet for Evans, Moore, Kroger, and the HRNS and their “experts’’, who ‘publish’ in the IPA.).

Why, however, does everyone giggle as soon as the names Moore, Evans, the HRNS, IPA, are mentioned. Why the adjectives? Why their reputation as “clowns” and “pompous buffoon(s)”, why the laughter? The senior executives glowing praise is a clue, but there’s nothing like finding out a bit more.

Then came Bellchamber’s article in the Age, his smug put down of Des Moore’s article in The Age. Not having read Moore’s article, what had he written for Bellchamber to feel free to put Moore down, and run fallacious arguments? Keep in view, Brookesnews has already demolished Bellchamber’s arguments (1).

What could Moore have written that is so bad Bellchamber freely jumped all over him ? I turned to a source one hasn’t bothered with for many years now, because they’ve never been enlightening, the HR Nicholls Society, its website in fact. After reading three articles, I found out why, and without having to bother obtaining a copy of Moore’s Age article. Those articles explained a great deal, and why many around Melbourne laugh and giggle each time the names Moore, Evans et al. are mentioned. I laughed too.

Kroger is strangling the Victorian Liberal Party, and does it also with his ‘brains trust’.

(1). E.g., G.Jackson, Brookesnews: “Liberal Govenrment labour market reform: Unions attack economics” (August, 2005), in, Labour Market Wars.