zimmerman8k said:
You haven't answered our initial question Frog. All your arguments are either fallatious or merely a personal rant about what is wrong with Labor that is irrelevant to economic management.
Too many vested intrests. Yeah what are they and how do they effect Labor's economic management credentials? Presumably you are talking about the unions. Basically you are saying:
The unions are bad (based on no evidence).
Labor is influenced by unions.
Therefore Labor is bad.
This argument is basically an ad hominem. Medicare gold has almost nothing to do with economic performance as a whole. You're saying that because Labor had one bad policy, therefore their IR policy must be bad. Whats more it is a particularly weak ad hominem because your comparing Latham led labour of 3 years ago to Rudd's labor today. With regard to the latter part, I guess we will have to wait.
Okay so thats your belief. It may be correct. But it does not prove or even substantiate that under a Labor government Australia's economy would weaken. Even if Labor were to enter certain markets (which ones they plan to perhaps you can enlighten me on) this does not show that it would weaken the economy.
Finally there are no authorities that support your claim. Can you cite any economics experts that believe the economy would be significantly worse off under Labor? Your arguments remind me of a clip from the Simpsons:
Judge: Mr Hutz, do you have any evidence at all?
Lionel Hutz: I have speculation and conjecture, those are kinds of evidence.
And thats all your argument is. Speculation and conjecture. Of course you might say this is evidence enough, because why should we risk the economy with Labor when its going well now? Again this would be fallatious. Simply because the economy is going well does not mean it is as a result of the economic management of the current government. If we are to accept speculative reasoning as a basis for judging politics we could just as easily speculate that the economy will crumble if Howard is given another term and that therefore we should vote for Rudd.
Now I simply await Frogs' predictable reply quoting a few minor flaws in this post and using it to dismiss the whole thing without analysing the mains points or answering any of the key questions I have posed..........
The classical general equilibrium model aims to describe the economy by aggregating the behavior of individuals and firms. Note that the classical general equilibrium model is unrelated to classical economics, and was instead developed within neoclassical economics beginning in the late 19th century.
In the model, the individual is assumed to be the basic unit of analysis and these individuals, both workers and employers, will make choices that reflect their unique tastes, objectives, and preferences. It is assumed that individuals' wants typically exceed their ability to satisfy them (hense scarcity of goods and time). It is further assumed that individuals will eventually experience diminishing marginal utility. Finally, wages and prices are assumed to be elastic (they move up and down freely). The classical model assumes that traditional supply and demand analysis is the best approach to understanding the labor market. The functions that follow are aggregate functions that can be thought of as the summation of all the individual participants in the market.
Neoclassical dependence is an indirect outgrowth of Marxist thinking which is a subgroup of development economics. People who believe in this theory are more radical than the people who belong to the other two sub-groups. According to this doctrine, third world underdevelopment is viewed as the result of highly unequal international capitalist system or rich country-poor country relationships. It is viewed that the rich countries through their intentionally exploitative or unintentionally neglectful policies hurt the developing countries. The rich countries and a small elite ruling class in the developing countries, who serve as the agent of the rich countries, are responsible for the perpetuation of underdevelopment in the developing countries. Unlike the Stage Theories or the Structural Change Models, which considered underdevelopment as a result of internal constraints such as insufficient savings, investment or lack of infrastructure, skill or education, the proponents of the Neocolonial Dependence model saw underdevelopment as an externally induced phenomenon. The remedy, according to those who preached these ideas, was to initiate revolutionary struggles to topple the existing elite of the developing countries and the restructuring of the world capitalist system to free the third world nations from the direct and indirect control of their first world and domestic oppressors.
The Dual Sector model, or the Lewis model, is a model in Developmental economics that explains the growth of a developing economy in terms of a labor transition between two sectors, a traditional agricultural sector and a modern industrial sector. Initially enumerated in an article entitled "Economic Development with Unlimited Supplies of Labor" written in 1954 by Sir Arthur Lewis, the model itself was named in Lewis's honor. First published in The Manchester School in May 1954, the article and the subsequent model were instrumental in laying the foundation for the field of Developmental economics. The article itself has been characterized by some as the most influential contribution to the establishment of the discipline.
In the model, the traditional agricultural sector is typically characterized by low wages, an abundance of labor, and low productivity through a labor intensive production process. In contrast, the modern manufacturing sector is defined by higher wage rates than the agricultural sector, higher marginal productivity, and a demand for more workers initially. Also, the manufacturing sector is assumed to use a production process that is capital intensive, so investment and capital formation in the manufacturing sector are possible over time as capitalists' profits are reinvested in the capital stock. Improvement in the marginal productivity of labor in the agricultural sector is assumed to be a low priority as the hypothetical developing nation's investment is going towards the physical capital stock in the manufacturing sector.
Since the agricultural sector has a limited amount of land to cultivate, the marginal product of an additional farmer is assumed to be zero as the law of diminishing marginal returns has run its course due to the fixed input, land. As a result, the agricultural sector has a quantity of farm workers that are not contributing to agricultural output since their marginal productivities are zero. This group of farmers that is not producing any output is termed surplus labor since this cohort could be moved to another sector with no effect on agricultural output. The term surplus labor here is not being used in a Marxist context and only refers to the unproductive workers in the agricultural sector. Therefore, due to the wage differential between the agricultural and manufacturing sectors, workers will tend to transition from the agricultural to the manufacturing sector over time to reap the reward of higher wages.
If a quantity of workers transitions from the agricultural to the manufacturing sector equal to the quantity of surplus labor in the agricultural sector, regardless of who actually transfers, general welfare and productivity will improve. Total agricultural product will remain unchanged while total industrial product increases due to the addition of labor, but the additional labor also drives down marginal productivity and wages in the manufacturing sector. Over time as this transition continues to take place and investment results in increases in the capital stock, the marginal productivity of workers in the manufacturing will be driven up by capital formation and driven down by additional workers entering the manufacturing sector. Eventually, the wage rates of the agricultural and manufacturing sectors will equalize as workers leave the agriculture for the manufacturing, increasing marginal productivity and wages in the agriculture while driving down productivity and wages in manufacturing.
The end result of this transition process is that the agricultural wage equals the manufacturing wage, the agricultural marginal product of labor equals the manufacturing marginal product of labor, and no further manufacturing sector enlargement takes place as workers no longer have a monetary incentive to transition.
Things are more complicated in reality as Surplus Labour is both generated by the introduction of new productivity enhancing technologies in the agricultural sector and the intensification of work. Also, the migration of workers from the countryside to the cities is an incentive towards those two phenomena as the relative bargaining power of workers and bosses varies and thus with it the cost of labour.