Face Reveal! Minimum Wage & the Essence of Capitalism.

one of the ways my channel sustains
70 000 views a month 80 000 currently we've been running 90 000 views a month for a couple months in a row is that people are always going back and digging up my old videos sometimes yes to embarrass shame and humiliate me in this case i got a letter from the audience of someone who is watching news stories about the united states of america and their plans to raise the minimum wage and they went and looked at my back catalog of videos discussing the question of the advantages and disadvantages of a 15 an hour minimum wage in the united states of america he writes in and saying it was fascinating to rewatch my own videos on this topic are you saying that western society in a way exports its poverty to other countries question mark continue the quotation here that it should seek to distance itself from importing exploitative goods as it has with china and other developing countries question mark now the very next sentence is also interesting because the next thing he says is quote i guess that's a given close quote there are two very interesting issues being raised by this question one is minimum wage itself and the other is autarky this is autarky spelled with a k we have two words that sound exactly the same in english with completely different meanings and a slight difference in spelling right autarky the idea that a country that a national government should pursue self-sufficiency and should cut itself off from what we would now call globalization international market international trading goods this idea has come up again and again when i was a child it was still popular on the left and it was practiced in some of those moderate socialist countries that were complete and utter disasters and that never get discussed in the same way that communist china north korea or stalin's ussr get discussed this is this is always the bitter irony if you'll say oh oh learn the lessons of history have you read much about the history of jamaica like there's history all over i'm not being ironic at all i'm not being facetious you have a lot to learn from the history of jamaica everyone's ignoring it like what do you mean learning the lesson's mystery well i kind of know a few anecdotes about world war ii and the vietnam war and how women got the vote yeah that's history the omissions right are even more significant than the inclusions when we construct this notion of history and the lessons of history when people are preaching that we learn the lessons of history what they're normally asking us to do is disregard about 90 of the world's history and focus on just a few carefully selected propaganda lessons drawn from the history of the world um you know right next door to china is a country called myanmar in myanmar they had state socialism not communism and they openly said that the path they were pursuing was not communism but they were influenced by karl marx and marxism and among the policies they embraced was autarky now totally non-socialist non-communist country that also played games with this notion was australia right like australia had the idea obviously at least in part a result of world war one world war ii and the cold war they should make up a whole list of goods that they should achieve self-sufficiency and like cotton oh what a great idea we should just grow all our own cotton we shouldn't export cotton from egypt right both in myanmar and in australia in very different ways these policies were disasters and they were disasters of a kind that's easily ignored right now what do i mean well you know what happened under stalin in russia what happened under mao zedong in china or on a smaller scale it's actually an interesting contrast to myanmar the incredibly violent history of communism in cambodia those things are hard to ignore you know there's a museum in the middle of phnom penh capital city of cambodia to the disaster that was communism in cambodia and every year huge numbers of tourists and also huge numbers of local people school children go to this museum and learn about how terrible communism was in cambodia there is no museum anywhere to the failures of moderate socialism right not in myanmar not in india not in africa africa has a long history of really interesting socialist non-communist countries that failed right and not in places like australia where it was only just one piece of the puzzle right it again didn't define everything the australian government did but obviously it influenced many things including the development of their car industry that eventually failed many parts of the economy were shaped by that notion before my time canada had some interest in this notion that everyone in canada should be forced to buy washing machines made in canada because otherwise they'd buy washing machines that were manufactured by evil americans this is before it was dreamed of that washing machines would be built in mexico or right you have probably already guessed from my tone of voice that in contrast to this message from a viewer who obviously has only the best intention there's a viewer who watched my earlier videos about minimum wage and who took from it the lesson that i was not trying to teach that somehow naturally the necessary implication of what i'm arguing is that we should refuse to import goods from china we should refuse to import goods from from mexico where should we not refuse to import kutzer right i understand this isn't quite declaring autarky outright right but this is comparable right to some extent i think what you're saying is you put up a fence around europe for example like it wouldn't just be switzerland saying they're going to make everything that needed switzerland but you put up some kind of fence around these regional blocks and you would stop importing things from china stop importing things from from all over the world from africa uh so on and so forth right so why is that wrong why is that i think wrong is the correct word what did myanmar do wrong why did myanmar you know render itself one of the poorest countries in the world through what seemed like a kind of well-researched scholarly approach to socialism that was partly informed by karl marx partly informed by tarabata buddhism you know didn't go to the extremes limitating mao zedong and joseph stalin i mean honestly if you read it on paper the social program of naywin in myanmar i think still to this day many left-wingers many europeans and many americans who supported bernie sanders oh well this sounds great so it sounds like it and you know by the way they were also committed to providing free education and free health care and uplifting for all kinds of socialist uh the de zitarata of social society were rolled up in this but i would say to simplify economic history slightly because there were a lot of things economically wrong with socialism it's not just one problem but to simplify it slightly you know that one issue of autarky of cutting off all international trade all importing and all exporting basically right of trying to pursue self-sufficiency of saying we can grow our own cotton we can make our own clothing we can manufacture our own shoes right that alone so utterly doomed burmese society and the burmese economy that of course after just a few decades there was no way they could provide their own education their own electricity their own sewage systems their own shoes their own clothes the whole country amazingly after the end of the british empire after independence got poorer and poorer because they were committed to this path of socialist autarky okay if you're gonna buy shoes who should you buy shoes from all right what if the reason why we buy chinese shoes is that they're the best what if china is the best country in the world in making shoes and that's not just price right price quality all things considered if china is the greatest country in the world in manufacturing shoes why should we not buy our shoes from them and what happens when you decide for political reasons that you're going to refuse to buy shoes from china now the computer this is being filmed on was manufactured in china the video camera attached the computer was manufactured in china the microphone is from china the lamp is from china i was going to say the bench i'm sitting on is from china not sure maybe indonesia i live in canada but even the wood products in this room were not made in canada were not imported from grant they're they're from abroad so it is not as simple as saying oh well we should just embrace the ethic or ethos of importing whatever is the best because it is the best no there's a huge fundamental problem here which as i've already pointed out in earlier videos doesn't just have to do with minimum wage but has to do with maximum wage also what you need is for different countries different cities different communities different neighborhoods to compete to see who is the best at making shoes right in terms of some kind of meaningful competitive advantage and not just in terms of who has the worst labor regulations who has the lowest wages who has the worst controls in terms of law and order for everything from pollution you know so-called economic externalities like water pollution or how much water you can use up uh sorry law and order encompasses many other things also including rule of law as it relates to the investors who may in an unseen way lurk behind the creation of the factory and the exploitation of the labor and all the rest of it right if you have global competition the four low wages then if just one country anywhere in the world has wages that are say one percent of what the wages would be in your country you have a situation like we have now with basically the whole world in relation to communist china where everyone increasingly over time is buying absolutely everything uh made in china there are numerous other absurdities people in california cross the border to mexico to get dental work done because dentists are paid so much less in mexico right obviously in some sense the value of a dentist performing the same dental surgery on you in california and the value of that service in mexico it should be the same or it should only different price by 10 percent 20 50 we shouldn't be having these dramatic differences uh in in wages all right so are these just two mutually incompatible ideals that can never be realized in the real world no it's incredibly easy to harmonize these ideals and i think that's part of why i don't know i personally feel uncomfortable talking about this problem because this is one of those cases where the solution is very easy to talk about and the problem is actually quite complex it's quite difficult to say anything meaningful about the problem itself right what is the solution globalize minimum wage period you need a globally harmonized minimum wage and you need to have all of the countries that agree to be part of that block to meet whatever that minimum wage is agree that they're going to have some kind of trade sanctions against the people that are outside of the the block you can have a very simple set of uh excise import duties and fees so that if you're importing something from a country where they pay their citizens half the wages your country pays its own citizens where you're doubling the price of it at the border of course you can fill in the blanks for how you exactly want to do the math you can think through the details so the solution is incredibly simple and the solution is easy to preach because it's good for all the participants you get to say to people in mexico hey when you work in a factory manufacturing a car you deserve to be paid the same amount as a white american working in a factory doing the same work to manufacture the same car and indeed you can say to the the mexican dentists you deserve to be paid the same amount for doing this dental operation as an american dentist will be paid like we can't have a kind of genetic bias like as if because you're born in mexico you should be paid less to do this work then remember that's fundamentally unjust that's fundamentally unfair so it's easy to see how you can mobilize the mexicans to ask for this higher wage and you can turn to the people of detroit people within the united states of america and say look you should be able to compete to see who can make the best car you know not on the basis of who can pay their workers the least but who really has an advantage who is really making the best pair of shoes who is really making the best car not who is grinding down their employees to the the lowest possible standard so let's continue just reading this this question so this is interesting though because i feel like the ghost of autarky is is you know kind of haunting this discourse and you know as stupid as the idea of autarky is it is fundamentally stupid to think that australia can farm cotton better than egypt it is stupid to think that australia will be better at making cotton and clothing than india or bangladesh there is just no reason to think that okay and i remember i was giving advice to members of the government in laos this is in southeast asia laos is a small country just north of cambodia they were talking about competing against the chinese in making china i.e and making porcelain that in english language we call china type of white porcelain china is famous for i was sitting there saying to them china is the best in the world at this okay you are never going to be able to make china cheaper than china you are never going to be able to make it at a higher quality than china what you people need to do is find something that you are the greatest in the world at you know you're not going to make better tea than china and you're not going to make better tea cups either and i just mentioned these people were communist party officials but they they were really receptive to this nobody's ever talking that way before they were all people growing up studying karl marx you know and so they had some some education economics but have someone said look this is not the way economics works like you trying to imitate china or even trying to close your border like to force your own population to buy teacups made in laos instead of tico all right and it's subtle but in that way step by step throughout the whole economy right autarky destroys your economy and a lot of it has long-term implications i remember seeing an interview with a uh an entrepreneur in india and he'd gone on to become incredibly successful and he was asked about how things had changed i think in the 70s 80s and 90s in india i don't think he was old enough during the 1960s and he said oh it was hell he said the government of india tried to force us to use all computers and all computer parts made within india and he said for the basic things in his business and he had to fill out all these forms and go to the mayor's office and go to probably had to deal with all these government officials just to get an exception handed to him so that he could import a computer from japan to do basic things in his in his business this is a huge fight because the government at that time had this agenda for autarky for so-called self-reliance right and nobody's thinking about what's lost because even if today even if today you think oh well in the short term you know it's better for india if we force them to buy computers made within india no what's best for india is that if people use the greatest computers made anywhere in the world if they're able to import and use the best computers from japan simply because they are the best and by using those computers you will create a whole new generation of people in india who have the know-how and the savvy in terms of computer programming both hardware and software to go on to create you know the next generation of computer technology can then happen in india but if you don't if you cut them off from that right you're stuck you're perpetually behind you're cut off from those devil so it's it's not obvious what is the point what is the point of allowing of allowing me to import this computer and this camera and this lamp from china right but you have to kind of think of it in terms of full full life cycle analysis all right the disadvantages the uh the way in which protectionism and autarky the most extreme form of protectionism the way in which that kind of corrodes society at every level and every stage right oh well now i can't get shoes made in china anymore like if you're living in a country like myanmar or you're living in a country like canada suddenly i have shoes at a dramatically lower quality at a dramatically higher price somebody's got to fix the plumbing but we can't get pipes made in china anymore nor can we get them made in germany oh we can only use locally made pipes to fix the plumbing like oh we can't get computers from japan anymore step by step you know repairing the plumbing becomes incredibly expensive and incredibly low quality the growing of cotton in australia becomes an environmental disaster and a disaster in terms of the waste of taxpayers dollars right step by step these things really can corrode your society in a way that most people well put it this way in a way that's not obvious if you read those burmese propaganda pamphlets that were describing the path forward to socialism and what their justification was for atari coming out of the background i mean as almost every one of the world did coming out of the background experience of world war ii and just thinking about independence and self-reliance as very positive things it's hard to see the harm that's done by the way the genesis of this whole train of thought in politics and political science is by bernard mandeville a book that is curiously titled the fable of the bees that is really the beginning of uh it's the beginning of capitalist liberalism as a as a political philosophy believe it or not that is step one and as the title indicates it's told with a kind of playful fable even though it's making a deadly serious point that as he puts it uh private vices are in fact public virtues when you look at society economically things that we think are virtues our vices and things that we think are our vices our virtues all right so he says repeating part of this we're going to finish his comment quote are you saying that western society in a way exports its poverty to other countries that it should seek to distance itself from importing exploitative goods as it has with china and other developing countries i guess that's a given what i really wanted to ask is there a point where minimum wage can be mismanaged perhaps if politics pushed it too high 15 is reasonable he says and reach some kind of upper bound would that be detrimental to supporting the poor by say driving up the cost of living okay close quote you are going to get absolutely zero false optimism for me on this okay increasing minimum wage causes misery in every part of society it forces a transformation in the way human beings interact with everyone else you stop having a society of waitresses at small coffee shops so plenty of time to talk to you and you're starting a society where all restaurants are organized like chipotle where the customers stand in line like they're cued up at a prison to have the food put onto a tray with a you know with a ladle right as soon as you're paying every waitress or every employee at this restaurant 15 an hour right the nature of the restaurant itself changes the nature of human interactions the extent to which people can even talk to you or even listen to you changes i had a friend who worked as a chef so he worked in restaurants a large part of many decades of his life and he talked about the way in which not just higher wages but tighter labor controls in france forced him to be an to his employees in a way he never wanted to it was one of his reasons for leaving france i met him out in outdoor nation but you know he said he hated the fact that he couldn't let his employees go outside and smoke a cigarette and he couldn't let them talk on the phone for 15 minutes with their girlfriend or something because they were at a point where they were being paid so much per hour there were all these labor regulations it's like man i need you you know i need you to be rolling this dough i need you to be making these croissants i need to be like i need to get every minute out of you because i'm paying you so much you know under these conditions so yeah there is a great deal of misery in all of your human interactions oh sorry i mean something else i remember seeing an interview with a small business owner he was in steel um it's not really some kind of steel contractor and he was talking about the fact that he could not employ a secretary he could not employ a human being to answer the phone and take orders and just deal with a few things in the office and that his his type of business he had to go out and physically visit clients and like show them the different grades of metal apparently i believe not rolling my eyes but it's just you know apparently there was a lot of like going to the site there's a lot of actually dealing with people and he said he can't leave the office to do that because he can't employ a secretary but the cost of employing just one person to answer the phones was now so high where he was living that he that he couldn't do it all right so your business changes the nature of employment the way we live together in society changes i mean i remember too like you know sorry again i'm not i'm pro i'm pro minimum wage don't get me wrong you know when i was a kid the school employed people to just stand around doing nothing like there was someone who stood by the intersection you know as a crossing guard and there was some there were like two people standing in the in the playground or like you know i can remember people being employed to do nothing sorry a lot of public spaces and we get into well you know one of the ones you still see movies making jokes about is having a bathroom attendant the employee employs someone at a restaurant or gentleman's school to just stand there in the back this is not my ideal it's not a state society and you know the last time we went into a department store uh to buy uh to buy a shirt actually i took you to buy this shirt i'm gonna think about it buy this white shirt you know i pointed out like it would be easier to shoplift than to buy something because it's such a huge store and they have so few employees now like we're walking around trying to find someone we can pay someone we can ask where do we pay it's like you have a huge floor on each floor there's like one employee right for the whole store and there's no you know there's no one else why there are security cameras in theory right but like so where the number of staff gets cut down because many times we've gone grocery shopping and i don't want to use a credit card i want to pay in cash enormous so i'm remembering this in the states you know going to kroger it's a famous grocery store in the states there's a huge huge growth i mean it's the size of a town it's really it's really it's absolutely enormous this grocery store and you get to the front and there's nobody there's not even one person employed to stand there and take your money and we're it's like oh hey use the automated computer robot checkout you know like i don't even have the alternative to line up and you support or sometimes you know depending on time it sounds there's one person and then they have the automated checkups yes you know there are myriad ways in which minimum wage transforms society for the worst okay and let's be all the way real within the little pockets of society where labor unions have been powerful and have raised wages within that profession within that workplace you already see this pattern playing out okay my father went through school at a time when his teachers and university professors were veterans of world war one not world war ii world war one and there were people who had time in that education system to literally hold his hand and talk he was my father was a disadvantaged kid from a single parent home a single mom in a still working town born and raised poor and you know he had different disadvantages and there were these people who coddled him and encouraged him and told him he could go to harvard university one day if he worked hard and he and he did you know there were people who really spent time sitting and talking with him you if you've been watching my channel from time i enrolled i paid thousands of thousands of dollars to study chinese at the university of victoria and nobody ever talked to me right language you're learning chinese life you need someone to sit and talk with you personally nope and what my first year the only time i spoke this is one year of university education a year does not mean 12 months in the canadian system it's a a year with quotation marks right the first year the only time i spoke was on the final oral exam what kind of system education is this for learning languages right but i get it i mean each one of these people is being paid a hundred thousand dollars you have a whole university system where the wages are really high and you know sorry you can look it up but i mean the actual wages for even sessional lecturers or whatever they're listed for uvic for for each university you can look it up in the internet what the labor unions agreement is how much they paid but guess who suffers yes ultimately students do suffer because they're they're not being taught they're facing the time so there are there are incredibly serious disadvantages to having a high minimum wage there are incredibly serious disadvantaged to have a minimum wage at all hong kong when i was there there was no minimum wage and they had restaurants they had banquet hall restaurants right this i doubt this exists in hong kong anymore because now they do have a minimum wage but definitely never existed canada they have a huge huge room it's like a football field just one huge over with big circular tables throughout the whole thing and everywhere uh basically in between every two tables so each table could have six people out of the rainbow it could just have four people or two people right there circular hills between every two tables there'd be a woman normally good looking woman in a skirt standing with her hands fold in front of her doing nothing her job is to stand there right they they were paid incredibly little right this is the society without none which and they're stood there just that any given time someone's sitting and want to say oh hey can just put up their hands and ask something they'll go off and tell the chef whatever it is they're just very permanently this was a this is a banquet hall this is normal in hong kong right okay you have 15 hour minimum wage you can't pay people to stand there doing nothing you reorganize everything you start being more like the japanese having a little intercom system where you press a button on the table things change all right and obviously you're talking about education talking about child care talking about you know whether it's babysitting or you know talking about old folks homes there are actually a lot of social services that really matter where this 15 hour minimum wage is going to change things and there are going to be people in the old folks home frankly dying in their beds or incredibly uncomfortable wishing there was someone who could turn them over or help take them to the bathroom or help them when they you know they're lying in a hospital bed in a state of distress and there's nobody around because now there's only one person for the whole floor instead of 10 people for that floor in the old folks up right yeah education is the part of the system i feel most is what i'm involved in but many other social services they will be eroded by this okay yes there are ways in which we all embrace and even love the reckless unfairness of the free market i mean you know a whole bunch of people this year got rich off of bitcoin you know i think bitcoin's a complete scam i even think it's somewhat immoral you know you know but we don't feel it's an injustice that some people took that risk and got rich off of bitcoin and if they got rich off the bitcoin it didn't make me any poorer right the story of the century it's all these people who got rich off of the gamestop short squeeze transaction for one bedroom a lot of people played this particular stock in the stock market maybe someone's watching this video 10 years from now and they've forgotten this google it fascinating footnote in history right some people got fantastically wealthy by buying this stock in the store and it's totally unfair it's totally ridiculous right but it's not making me any poorer if you got rich by taking this risk taking this gamble right when we get into these questions of minimum wage and maximum wage we're talking about that much harder part of politics and you know political economy in the truest sense of the world right yes one person is going to get rich and another person is going to get poorer a whole lot of restaurants that are traditional diners are going to have to shut down and renovate and reopen to look more like taco bell right to look more like mcdonald's where they just have two people at a counter and they don't have table serve a lot of things are going to have to change okay and you know of course i mean one of the most obvious ones you know factories this has even happened in communist china on a massive scale the number of people employed in manufacturing circuit boards gets smaller and smaller but the amount the remaining people are paid gets more and more right you have a more automated more streamlined processor whereas before the large number of unskilled workers just physically placing the chips on the circuit board and the pcb and you get fewer and fewer people more advanced machinery etc right but those fewer people are earning a better these throughout your whole society this kind of transformation is is ongoing and yeah there are winners and losers and guess what the number of losers is far greater than the number of winners okay but there are some things in politics and economics that are unfair that we correctly perceive as an injustice that needs to be redressed that needs to be fixed okay the fact that a dentist in california is paid so much more than a dentist in mexico to do exactly the same operation is an injustice it is an absurdity and it is even economically irrational it's bad and evil and wrong it's bad for the united states of america and it's bad for mexico the fact that there were factories and yes i remember reading a case study of a particular factory that literally did this there were factories that were disassembled in detroit transported piece by piece to mexico and reassembled in mexico the same machinery not the same bricks but the actual metal components of the of the machinery were reassembled and they started producing these in mexico just because the wages in mexico were so much lower it's bad and evil and wrong it's unjust and it's economically irrational it's bad for the people of detroit it's bad for the people united states america but it's also bad for the mexicans all right if we regard the continent as one unit you can say hey there are first-class citizens and there are second-class citizens here it's almost like a form of economic racism right oh yeah some people when they do this job in the factory get paid 15 an hour and some people get paid one dollar an hour to do exactly the same job in the same factory in that particular case it was literally the same machinery and the same process whether it is a dentist or whether it's an auto worker or whether it's a farmer right i mean we have this fundamental sense of justice that each man deserves the fruits of his labor right but what that means is very much subject to supply and demand we have an ideal of what the market should be right it should be that whoever makes the best pair of shoes wins and you know what china is the best in making certain kinds of shoes and italy is the best at making others some of you know what i'm talking about some of you have no idea italy is still the best for making certain kinds of shoes certain kinds of purses right taiwan makes the best bicycles both in terms of price and quality taiwan makes the best bicycles ever in the world you know what the competition is italy italy still makes bicycles right paying a much higher wage why because they're the best okay we have a sense of what is just and what is right how the market ought to work but we know it never can work with this fundamental injustice this fundamental irrationality of having a 15 an hour minimum wage in one country and a 50 cent minimum wage or a one dollar minimum wage in another sometimes as in the case the united states and mexico even when they are right next door