Some unstructured notes on labour, wages and the role that Bitcoiners can play in the conversation about them:
(I'll try my hand at a Misesian 'value-free' analysis of how wages work in different systems)
Question: Why do the services of one individual become valued more than those of another?
The answer depends entirely on the type of economic system in place.
In a free market,
The answer is simple:
> Because that’s what people are willing to pay for.
Value is determined by people who aim for subjectively chosen ends using scarce means available to them, while engaging in voluntary and contractual exchange.
If someone’s services command a high price, it means many individuals or businesses willingly outbid each other for that person’s time and energy to aid in the production of goods and provision of services they desire. This reflects genuine demand.
In a planned economy,
The answer shifts dramatically:
> Because central planners decide what should be valued and what shouldn't.
Here, price signals are suppressed or absent altogether. Wages, production quotas, and outputs are politically assigned. Whether a service is useful or not becomes irrelevant. What matters is whether those in power deem it so.
It is possible that this system can exist, but it will mean resources do not get allocated towards the ends that people actually want production of goods that they demand, but towards those that people in power think are ideal.
Even then, an informal market (black market in statist lingo) will still emerge for labour and wages. It's just that these contracts will lack the legal protection for both the employers and employees.
In a mixed or interventionist economy like India,
> Market signals exist, but they constantly collide with arbitrary political interference. It becomes unclear whether prices or wages reflect genuine consumer preferences or the coercion of regulatory and political actors.
Some industries will seem like they always function smoothly while others seem to run into trouble all the time.
In such an environment, we must ask:
•Is the market allowed to honestly express how much it is willing to pay for a service?
•Or are minimum wage laws, licensing regimes, and government contracts distorting these signals?
•Are consumers and businesses paying for services voluntarily?
•Or are they forced to do so via subsidies, mandates, or crony licensing, which means consumption occurs that otherwise wouldn't have occured had coercion been absent?
•Who performs economic calculation? Is it entrepreneurs and capital owners, who bear the risks and benefits of decisions? Or bureaucrats and caretakers, who manage resources they don’t own, have no skin in the game, and are incentivized to preserve their position rather than allocate resources efficiently?
The answers can help explain why some industries thrive quietly while others are plagued with drama, inefficiency, and perpetual political controversy.
In sectors where market prices are allowed to work, like consumer electronics or food delivery, we generally see constant innovation and falling prices.
In sectors like real estate, education, healthcare, or agriculture, where power routinely interferes, we see mispricing, shortages, lobbying, and stagnation.
The crucial contribution that Bitcoiners can make to this discourse would be to address the effects of interventions into the monetary and banking systems on the labour market.
One cannot easily of readily imagine the consequences when the state interferes in the two sectors that perform the most fundamental functions in an economy:
1. Money: the mechanism by which prices are assigned i.e. valuation of things across space.
2. Credit: the mechanism by which time preferences are coordinated i.e. valuation of things across time.
Distortions in these industries infect every other market by corrupting price signals, misallocating capital, destroying savings and ultimately civilisation itself.
Monetary and Banking interventionism is so can have such a corrupting effect on the market economy that it just might result in a slow creep towards totalitarian planning.
An example of this 'slow creep'
Money printing and artificially low interest rates lead to prices going up. This means no amount of wages are enough. Savings will start seeming like a pipe dream. Risky and uneconomic endeavours are undertaken. Time preference gets really high. Minimum wage laws are demanded and imposed, causing nemployment. Welfare demands are made and granted. Spending and debt goes up. A call for fiscal responsibility leads to higher taxation on the electoral minorities. This means investment goes down, reducing productivity. Manufacturing and production declines are blamed on trade flows and hence trade restrictions are imposed. Price controls are suggested and promptly imposed if things get bad enough, causing shortages.
All this while, the blame will fall on the market for causing these problems, with the intellectuals making sure public opinion is shaped in favour of a planned economy. This is easy as they can simply hypothesize about correlations and causations arbitrarily using selected empirical data, to be presented as scientific evidence that the market is failing.
