2 votes

Total poverty and free markets

Can you guys explain for me the economic situation outlined in the Grapes of Wrath? Citizens fleeing the dust bowl, going to CA, only to be among a million other workers competing for scarce jobs and slave wages. How long did the situation go on before the minimum wage law was passed? What if it hadn't been passed? Would you expect citizens to very soon start opening up businesses of their own, even though they can't even afford decent food and they live in tents? What about all those resourceful people who managed to build and run their own farms in their native states - they couldn't figure out some way to make a living? Or was the situation different than how Steinbeck described it? I have trouble trying to explain how free markets will resolve situations like this on their own.

Similarly in parts of Africa, I think. Millions of people living in slums, no jobs, hardly any food. What's stopping their economy from growing? Is it just a case of being in a place with no natural resources and/or corrupt people stealing all the resources and enslaving people rather than paying them wages?

Obviously any new settlements where people arrive with very little often work out despite the initial hardship. But in the case of the US colonies, I believe they initially did a lot of trading with the natives. And in more distant times, hunters and gatherers passed down a lot of basic information on how to stay alive, so that they could move around a lot easier and figure things out.



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The State

always and everywhere funnels money upwards. It has always been a lie that people on the bottom will benefit. They are tossed crumbs. There would be no need for powerful people to create a State if they were not the beneficiaries. There will always be hard times and some people will always suffer. But the State, a monopoly on the initiation of force, who's purpose is 'obedience and consent(or acquiescence) obtained by either force, payment of wealth, or persuasion', as defined by Carroll Quiggley, is never the answer. The Great Depression was a product of the State and its central bank. Without malinvestment, lured in by special interest driven State edicts, an entire economy does not fail simultaneously, industry sectors ebb and flow.

The dust bowl would have been a difficult situation for Mid-Western farmers no matter what the government did. Such is life.

reedr3v's picture

Of course major weather disruptions as in the

Dust Bowl, with severe drought and terribly strong winds that carried away much topsoil,simply cannot be fully offset by even the most enterprising people. But this was combined with the major disruptions of the economy leading to the Great Depression.

The price bubbles blown up by the new-fangled Fed during the 20s burst and suddenly farm land values dropped. Farmers could not make mortgage payments, and the drought worsened their plight. I'm not sure of the timing, but at some point in the Depression, FDR insisted on keeping prices up and required farmers to kill a percentage of their livestock and turn crops under, even though people were starving.. So many factors created a perfect storm that simply overcame many.

From my reading, if you look at the worst situations of sustained poverty the world over, you'll find government intrusion into the economy that does not allow recovery from severe weather patterns. We've seen much disruption and impoverishment from the big Green Revolution government projects and complicity of Monsanto etc.

The easiest way to explain it would be to understand ...

that the multinationals would not exist.

They would break up into hundreds of small businesses because they could not compete without the protections allotted to them by the state.

Competition would be fierce in every field rendering profit margins down to single digits and in most markets below 5%.

Labor would be extremely valuable and the other costs such as energy, raw materials, capital, etc. would be the factors that would fluctuate with supply and demand leaving labor very valuable.

The only poor people in the world would be those that choose not to better themselves or can't due to physical or mental limitations.

And the social-economic status becomes extremely fluid where a poor man can become very wealthy almost over night and the wealthy can become poor in a matter of hours.

The world would become extremely dynamic, exciting, and moral hazards would not exist.

Carry on.

Ok, I think I kind of get it,

So did the govt pay loot to the plantation owners in CA that were paying slave wages? Or is there some reason to think those businesses wouldn't have stayed in business if they had to keep the business alive on their own? I'm confused as to how labor would become more valuable. I thought the labor wage was mostly a function of supply of certain workers and demand for them.

Slavery is only possible when the state makes it legal ...

And then aids the slave owner in protecting his "property".

I think if this were a chess game ...

I would tell you to think one more move ahead.

wages

The state doesn't have to make slave wages legal. It was just a matter of paying low wages, and there was no minimum wage set by the state yet. What raises wages, if there is just a continual influx of new people looking for jobs?

And what would or did the state do to protect a landowner's property? Why was the property even threatened? Not sure what you're referring to. It's been 15 years since I read the book, if this is about something in there.

Wages...

would fluctuate based on employees free-will to continue to work under whatever bad condition that may come to your mind.

When an employer didn't provide suitable working conditions, good workers on average would tend to leave while less skilled workers would take their places. The company would experience a decline in the quality of the products and/or services it provided, and the free market would punish the employer by cutting into his profits.

The influx of new people is no problem.

Eventually...

the employer would have to realize the cause of his lack of success and address the problem - or fail.

anyone?

So nobody has a clue how economic freedom benefits the poor? Or has nobody read Grapes of Wrath?

Thanks for posting, KongVault.

Here's a poem for you:

The Humanity of Man

Who will redeem man
from the curse of the earth
by giving us wine?

To crush the grapes of wrath
of man's inhumanity to man
would quench that thirst!

Selfish desire motivates the elite
to sustain a system that sinks
families into war and poverty.

In contrast to that selfishness
stands those families' respect
toward one another.

Aware that their survival
depends upon their devotion
to the collective good,

they unite, sharing dreams
as well as burdens,
in order to surive.

Who will redeem man
from the curse of the earth
by giving us wine?

We will! And our love will show
that man's humanity to man
is for the common good of ALL.

- Me

-
"Stand up for what you believe in. Even if you stand alone."
~ Sophie Magdalena Scholl
"Let it not be said that we did nothing."
~ Ron Paul
"You must be the change you want to see in the world."
~ Mahatma Gandhi

I'm confused. The poem seems

I'm confused. The poem seems to indicate that selfish desire is evil and that the only solution is to love one another and spread the love.

lol

Passion, greed, covetousness, hatred, lust: these emotions dominate the soul, causing blindness and leading to destruction. Every major religion recognizes that suffering and evil are caused by excessive desires or desires directed toward a selfish purpose.

-
"Stand up for what you believe in. Even if you stand alone."
~ Sophie Magdalena Scholl
"Let it not be said that we did nothing."
~ Ron Paul
"You must be the change you want to see in the world."
~ Mahatma Gandhi