I Want to Pay Global Talent (and Everyone Else) $1/Hour

All I want to do is pay my team $1/ year - but for some reason, they won’t say yes…

I propose that this seemingly preposterous offer illustrates the basic principles of the free market system - voluntary exchange and the forces of supply and demand.

A system that encourages people like me to find mutually beneficial solutions to significant differences… in the name of making a voluntary transaction happen.

At the core of my offer lies a harsh reality: in a free market system, wages are not determined by the ever-increasing salary aspirations of the worker or the "benevolent intentions" of me, the employer.

In reality, wages are the product of a non-negotiable reality supply and demand.

Like gravity, my love of carbohydrates, or an unserious influencer's never-ending quest to sell you a shitty mastermind - supply and demand just IS.

As the employer, I am driven to minimize costs and maximize profits, and want to pay the lowest possible wage.

I would LOVE to pay everyone $1 an hour - but we all know how that would end up.

Conversely, the employees, fueled by their dreams with only a thin chain to reality, aim to earn millions.

If employees and I were to stubbornly adhere to these initial positions, we would find ourselves unable to transact, unable to make something happen, unable to go slay dragons together.

However, the beauty of the free market system is that it creates an environment in which both parties are strongly compelled to compromise and find a middle ground.

This is the magic.

Both the employees and I, acting in our own self-interest, will engage in a process of negotiation.

We will explore the possibilities that lie between the extremes of $1 and $1,000,000, seeking to find compensation that satisfies both the employer's need for profitability and the employees' desire for fair compensation.

The employees, of course, are free to reject this offer and seek employment elsewhere.

They are free to hold out for their dream salary of $1,000,000 per year.

Just like I’m free to hold out for my dream compensation package of $1 per hour.

But in doing so, we both risk pricing themselves out of the game!

Through a whole hots of mechanisms, a magical price point emerges – a wage that represents a mutually agreeable compromise between me and the employees.

This wage, determined by the forces of supply and demand, is the key to unlocking wealth for both of us.

Me, by paying a competitive wage, am able to operate my business successfully, generate revenue, and create value for our customers.

The employees, in turn, receive compensation that allows them to support themselves and contribute to the growth and prosperity of the business.

And therein lies the beauty of the free market system – the idea that, through voluntary exchange and the pursuit of self-interest, individuals can come together to create outcomes that are mutually beneficial and collectively optimal.

No benevolence needed!

Just enlightened self interest.

Our system rewards merit and drives progress…not through the heavy hand of government intervention or the false promises of socialist fantasies where no one ever pays the bills…but through the simple, elegant mechanism of supply and demand.

Moreover, the free market system, via these voluntary transactions, allows for the smart allocation of finite resources across the economy.

Voluntary exchange ensures that labor, capital, and other inputs are directed towards their most productive uses.

A self correcting system that adapts and overcomes - no central planning needed.

A beautiful, invisible hand that fuels growth, opportunity, and wealth for billions of people around the world.

We are all richer, healthier, and more successful because of the free market system.

In the end, the free market system, with its emphasis on voluntary exchange and the forces of supply and demand, is a powerful engine of wealth creation and opportunity.

It may not result in perfect outcomes or fulfill everyone's wildest dreams (even my own), but it does create an environment in which individuals can come together, find common ground, and pursue their goals in a mutually beneficial manner.

It is a system that (when left alone… a rare thing) rewards hard work, innovation, and value creation, while also providing the flexibility and dynamism needed to adapt to an ever-changing world, with incomplete information.

I’m not so naive to think things like externalities or information asymetries can take this beautiful concept and tie it up into knots… but fundamentally, I think we should be teaching a new generation about the beauty of the free market system and the power of voluntary exchange.

Let us recognize that, even in the face of seemingly irreconcilable differences, there is always a path forward – a path that leads to mutual benefit, shared prosperity, and the realization of our individual and collective potential.

This is the true beauty of the free market, and it is a beauty that we should cherish, protect, and celebrate.

Yallah Habibi,

Jon

Passage of the Week

Guess there are times when we all need to share a little pain
And ironin' out the rough spots
Is the hardest part when memories remain
And it's times like these when we all need to hear the radio
'Cause from the lips of some old singer
We can share the troubles we already know

Turn 'em on, turn 'em on
Turn on those sad songs
When all hope is gone
Why don't you tune in and turn them on?
They reach into your room, oh-oh-oh, oh
Just feel their gentle touch
When all hope is gone
Sad songs say so much

If someone else is sufferin' enough, oh, to write it down
When every single word makes sense
Then it's easier to have those songs around
The kick inside is in the line that finally gets to you
And it feels so good to hurt so bad
And suffer just enough to sing the blues