Dr House

I don't. I don't envy them, but that's the choice they have. In any case, that's just a transitional stage to a more modernized economy.

I'm not making the case that they had it good, I am making the case that the reason they had a crappy deal was not laissez-faire economics but the state of the economy, and that we would've pulled them out of that rut a lot faster had we had kept on the free market path.

I have dubbed the 60 years between the beginning of progressivism in 1890 and the end of the Depression in 1950 the "lost years". That was the time that elapsed between the government usurping control of the economy due to pressure from special interests and them actually figuring out how to run it. Not that they've done a bang-up job of it, anyway. Macroeconomic stability, wage growth and GDP growth were all in better shape during the gilded age than the so-called golden years.

Slartibartfas

Choice? What choice?
To live in bitter poverty on the country side or under heavy and life risking exploitation in the cities? ... Great choices.

Unions did not come into existence for no reason. Had those industrials had a little bit more foresight and much less greed they could have let the workers enjoy a far larger share on the wealth they collected instead all for themselves, it might have come different.

Rising productivity does not lead necessarily to a higher general wealth.

The Austrian economy was bombed away and what survived the war was transerred to a large part to Russia. Granted there was the Marshall plan, but the situation during the occupation was everything else than flowery. Still the people had not to suffer in the least those great injustice and inhumane treatment as the people in the industrial revolution days, even though the Austrian industry pretty much had to restart from nearly 0 again. It worked fine for us, without laissez faire and without the workers being exploited to the outmost possible extend.

I actually dont care much about the GDP per se. The only thing that matters is how one can secure the outmost wealth for the most people. If you have a giant GDP while the most people live under bad conditions and in bitter poverty, its worse than when you have a mediocre GDP, but people live in mediocre wealth.

The economic power of a country is important, no doubt, but in my opinion its not a goal in itself. Its just a means to bring wealth to as many people as possible. If it fails to succeed in this goal its a lousy means.

__________________
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dahermit

Yes, but you could take comfort in the fact that the economic data indicated that things were getting so much better...I wonder if economic charts are edible?

lg11

Regulation does not necessarily exclude growth. Comparing "overregulated" Europe and "laissez-faire" USA you can only come to one conclusion.
I am all for the free market, but there need to be certain regulations to guarantee a healthy and balanced economy, both of which the U.S is not.

Dr House

And neither is Europe. Sweden and Finland both suffered depressions in the 90's. Western Europe was slowly grinding to a halt before its governments shifted right as if of one mind and started liberalizing. Even now unemployment rates are twice what they are in the US and long-term unemployment rates are anywhere between 5-15 times as high, depending on the country.

I have just conclusively demonstrated that the 19th-century combination of free markets and a bimetallic currency subject to "erratic" market fluctuations was not only not more volatile, it was actually more stable than the current Keynesian interventionist economy. Moreover, I have found evidence that from 1840 to 1890, the golden years of American industry, the inflation-adjusted purchasing power of blue-collar workers had been rising at a faster rate than it ever did since.

Dr House

No, rising salaries do that. And I have just demonstrated that salaries for blue-collar workers were rising faster in real terms during the gilded age than at any time since.

I've heard that argument repeated over and over and over again. The reality is that GDP cannot rise significantly in an integrated economy without everybody benefiting from it, the market just doesn't work that way. Again, I did not limit myself to showing that GDP was growing faster, I showed that salaries were growing faster. They were crappy because the economy could not sustain any more, wealth is not created out of thin air. In real terms, like I have also said already, we were poorer than China. How could we pay workers 15 grand a year (or the back-then equivalent of that) when we simply did not produce it?

smallpox

Doesn't inflation increase employment rates; giving it a higher overall welfare?

Dr House

The economy has a natural market rate of unemployment. Barring price floors (minimum wages) and other distortions it'll reach the most optimal balance by itself. There's no need to erode the working man's (and the retiree's) purchasing power to achieve higher rates of employment.

-Dr House

discoman

Don't forget also, blacks and other minorities treated as virtual slaves,and set upon and killed for the slightest infraction.
Oh yes, the good old days, weren't they?!?

smallpox

I don't think inflation creates a deadweight lost as would price floors. Yes, a market equilibrium can be achieved on its own, but a social optimum is also sought after.