… is from page 30 of 2006 Nobel laureate Edmund Phelps’s 2013 book, Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change:
Innovating also draws on people’s observations and personal knowledge. New business ideas come only to those who have been observing at close hand some area of a business, learning things about how it works and giving some thought to the possible size of the market for a new sort of product in that area or to the prospect for a better method of production; plausible business ideas rarely come to those remote from any business.
And yet so many economists today confidently pronounce that they know – know well enough to counsel government to act on their ‘knowledge’ – that monopsony power so infects the market for low-skilled workers that dangerous minimum-wage legislation is justified. These academics, ever-confident of their scholastic learning, very tellingly refuse to risk their own money or their own time or their own efforts on actually trying to exploit the monopsony power that they so arrogantly assert to exist. Such people who refuse to put their money where their mouths are ought never to be taken seriously.