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Quotation of the Day…

… is from pages 572-573 of Karl Brunner’s superb 1970 Kyklos article, “Knowledge, Values and the Choice of Economic Organization“:

But what about persistent unemployment of Negroes and increasing unemployment among teenagers?  The observations are not disputed, but the interpretation advanced by the critiques [of the free market] is rejected.  This interpretation emerges again through an impressionistic short-cut.  The contention ‘inherent market failures’ is not subsumed under a testable theory of market processes.  It occurs in a cognitive limbo as a valuational judgment attached to the observations cited.  On the other hand, we do possess a highly confirmed hypothesis explaining the response of distinct labor types to increases in minimum wages.  This successfully explains the patterns of persistent unemployment pockets.  The hypothesis in question implies nothing with respect to our values.  It says nothing about whether we should help the poor or the rich.  It only says that if we help the poor by raising minimum wages, then the frequency of unemployment among the poor will rise.