Tuesday, February 3, 2015

Noah Smith On Builderism

In his most recent post... Noah Smith wonders what killed his favorite bookstore.  Except, he doesn't do much wondering because he quickly points out that the culprit was an increase in the minimum wage.

Here's the first comment (posted anonymously) on his entry ...
Does the owner sound like a Mitt Romney style capitalist? No. But he did build a business model that survived only by paying his employees a non-livable wage so on the balance not that great. 
I love real book stores too, but if a business can't survive paying its workers more than the change found under couch cushions maybe our nostalgia is misplaced. 
Think of all the cool stuff we could have if our labor cost was closer to zero…ahh the good old days.
To which Smith replied...
But they chose to work there, and take the low wage, because they loved working there. Those clerks are smart, smarter than the average clerk, and I'm sure their incomes will go up as a result of the death of Borderlands. But they chose to work at Borderlands for pocket change, and now that choice will no longer be available to them.
I really like the part where he acknowledges that the option of working at Borderlands will no longer be available to the employees.  Kudos kudos kudos.  But...just before Smith points that out, he says that he's sure that their incomes will increase as a result of their preferred option being eliminated.  Eh?  But he started and ended by saying that the employees chose to work there!

What's going on here?

Noah Smith, being a liberal who logically supports minimum wages... essentially got those employees fired.  But it's ok!  You know why?  Because he's confident that they will find higher paying options elsewhere.  This must mean that he's confident that the new options that he's thrusting on them will provide them with more value than the options that they themselves chose.  Evidently, from Smith's omniscient perspective, the increase in pay will more than offset the loss of other benefits.

Essentially he knows their preferences well enough to override their own decisions.  He's confident enough that they were making a mistake.  He's certain enough that they were not choosing their most valuable option. For some reason I'm... skeptical.

Actually, I know exactly why I'm skeptical.  It's because I've studied builderism.  Unlike liberals, I know where better options come from.  And believe you me, they really don't come from minimum wages.  As we can see from Noah's example... minimum wages destroy better options.

Minimum wages shrink the pool of people that you can trade with.  Before, workers had the option to trade with Alan Beatts the owner of Borderlands...and now, thanks to minimum wages, they don't.  They have less options...yay!???

Right now we can trade with with people in China...maybe it would be better if we couldn't?  Right now we can marry outside our race...maybe it would be better if we couldn't?

Maybe free-trade is overrated?  Perhaps we can maximize value by minimizing potential trading partners?


  1. I think it's only you who's equating "most valuable option" with "pays the most". They weren't making a mistake, they were choosing to give up some money in return for a better experience.

    1. How am I the one equating MVO with the highest paying option? Unlike Noah Smith, I strongly oppose minimum wages. So it was Noah Smith who cost the employees their jobs... not me.