Economics & Systemic Racism

When I think of economics, I think about poverty, and how to eradicate it. Do we really understand economics,? Do we understand the economic system we live under? In order to understand it, we must first get somethings right correct. In the wake of police brutality, capitalism seems to be demonized, some will go further to say, it is one of the root causes for all this, for those who say that the system is racist, I think they keep looking at the wrong place or simply just think the police somehow invented systemic racism. They have forgotten to look at one place which is economics, the riot and looting had one hidden reason. POVERTY!!  How will taking a TV, stop systemic racism? but we saw it happen over and over again,  it is all about poverty.  What brings about Economic prosperity,?  Well, the answer is simple Productivity, So what we earn should be proportional to our productivity. Capitalism gives us the chance to make as much as we want.  Productivity is at the core of economic prosperity. Every successful company sells something, be it a service or a product,  of course in economics, there is such a thing like cheap labor, etc, but we won’t get into that now, this is about understanding recent events and what led to them.

Capitalism is not the enemy, capitalism is actually the solution. Like Bono (the lead singer of U2) said, it has taken more people out of poverty than any other system.   The statistics prove it. Every culture at the point of prosperity has practiced some form of capitalism to sustain its prosperity. Even China did this.

One of the main issues of the system as a whole is that people confuse capitalism and democracy, and sometimes think they are the same. To be honest, and quite frankly I don’t think capitalism and democracy can actually work together. This is why America is a republic and not a democracy.  According to someone, democracy is nothing but mob rule, most powerful takes all, the majority takes all,  One of my favorite economists was Milton Friedman,  his take on the economic system was quite interesting,  he explores the hidden rules that make it quite impossible for upward mobility and he was spot on.

Take the minimum wage, for example,  a lot of people are happy when the minimum wage is raised, that means more money right?

here is an interesting question, if the rich are bad, and they got rich by greed, and they own these companies, and somehow the rich supports an increase in the minimum wage,  why would people trust these same companies/rich? one thing people do not realize is that the minimum wage law itself restricted hiring!

Another economist who I deeply admire is Walter Williams, he is one of the best economic thinkers of our time. He was a professor of economics at Temple University. He is still alive today!!. He was against the minimum wage laws for the very reason I’m stating,  he made the argument about South Africa, which was true,  he said ” in south Africa Unions were more honest,  they said they supported minimum wage laws with pay equality to protect white jobs.

Another economist that I admire and respect who himself is a friend of Walter Williams is Thomas Sowell.  he agrees with the point I’m making here.

A higher minimum wage leads to unemployment,   is it any mystery that companies like Amazon, Microsoft, Walmart, support the increase in the minimum wage, ????   I wouldn’t think they support it because they had a change of heart!!!

let us go into a little history,

the minimum wage laws were introduced by FDR,  which he raised twice during his presidency, then we have a few presidents who raised it,  it is also no mystery that democrats raised the minimum wage more than republicans did. Jimmy Carter actually raised it 4 times.

Interesting FACT,  Ronald Reagan, never raise the minimum wage,  so is it any mystery that during his time in office which was from 1982 to 1989, there was a massive economic boom,  unemployment fell to record lows, According to the NY Times,  “Never have there been so many jobs created during a comparable time period”… Everyone after Reagan raised the minimum wage at least once.  it’s interesting how people trust Bernie Sanders who said he would raise the minimum wage to $15 an hour, and he called that a living wage, No one asked him about that, no one told him how he was actually lying to us, I think it is time we start learning about basic economics and the math that governs it,  this way we will be well equipped to ask our politicians the tough questions, the questions that will require them to think on their feet.

Another point, big corporations, and unions all support the minimum wage because they can afford to pay higher wages,  but a lot of small businesses will go out of business and kill the competition.

According to Milton Friedman,  the” minimum wage is the most anti negro law on the books” Sad thing is that we can’t see that, we support it because it gives us a little, a minimum wage is a form of welfare, where they give you just enough to get by day by day but not enough to make a difference in your life, also we trade our time for dollars, not by the amount of productivity.

The declared purpose of the minimum wage was to keep everyone out of the labor force, and all this by the way can be found in the Davis-Bacon ACT.

The minimum wage in itself is discriminatory, just by design alone, back then it was a “black” and “white” thing,  now is a rich and poor thing, minimum wage by its very design favors the upper class, whoever may be there.

To end this, I’m sure people will say, without the minimum wage, companies, and employees will pay people as little as possible,  to which I say to them it is true that is in their best interest to pay as little as possible, but then it is productivity that drives prosperity not a set amount

According to Walter Williams ( whom I agree with ), One of the few ways to look at the minimum wage is through the eyes on an employer,  The lower skill people won’t get jobs because employers won’t hire them, but if the employer could pay them less, they might have “on the job” training for them, then they could acquire skills that attract better pay through negotiations !!.  There is a book called South Africa’s War against Capitalism,  a book by Walter Williams, and that book he provides the evidence that Racist Unions in South Africa, who didn’t have a black member were the supporters of the minimum wage for blacks, they said if the wages are made high enough employers will high white workers and not black.  So it’s a win-win situation for them, either minimum wage brings a lot of cheap labor or makes sure a certain group of people leaves the labor force or never enter in the first place if we want to find out where systemic racism is really hiding, let us take a look at economics, not the police.

“The minimum wage law is the most anti negro law on the books “ -Milton Friedman