Do people actually understand how welfare in America works?

[Mr Khan]

SamuelRSmith said:

Very first point: in a free market society, there would be less "free capital" (read: printed money, centrall planned interest rates( which would result in fewer mal-investments, and greatly reduce the number of companies/induestries that burst up and then suddenly collapse. It will still happen, but with far less frequency. What would be far more likely is that Route 128 would be slowly outcompeted, and the industry would shrink over time. Thus, available labour would tend to be more of a trickle, then a surge.

HOWEVER, let's take the extremely rare case that such a thing does happen in a free market society. What would happen with labour?

Well, first of all, the demand for tech-related jobs won't disappear immediately. Plenty of firms/people need assistance with tech, setting up systems, maintenance, etc. Some of the labour would be absorbed there. Some of the companies involved directly in Route 128 would survive, even if in a much reduced version of before, some labour would never lose their job.

Some of the companies in California would cherry-pick the very best talent and move them over (they do this already, and not just across States, tech companies in Silicon Valley will pay all the extortionate costs they have to just to import labourers from Europe). This will absorb a very small amount of labour.

But what about the other 70-odd% of labour? In a free market society, there would be hundreds of jobs that still need doing. I mean, I know my family would look to have a cook, gardener, driver, cleaner, but cannot currently afford them because labour is being pulled away in a million other directions. McDonald's always needs new cleaners, and I'm sure there are MANY jobs that Boston needs done but currently cannot. Hell, if it wasn't for all the interferences with licensing, fuel taxes, etc., somebody who just became unemployed could whack a "taxi" sign on the side of their car, and start driving around. Everybody benefits from this.

These are not fantastic jobs, but they would not be permenant, just long enough to keep people by until they retrain, or the demand for their current skills increase. And, even so, like I said, this would only happen extremely rarely, as sudden collapses just would not happen. The only industry where such a risk would be that great, in a free market society, would be the banking sector... and that's something that people training to enter the market would be aware of, such that there would be a lower supply, and thus greater wages, to accomodate the risk.

You never watched that one episode of The Simpsons about what happens in unlicensed cabs, did you? Granted, they were in Rio de Janeiro at the time, but still... licensing and regulations exist for good reasons just as often (or moreso) than they exist for poor ones.