George Selgin and his former student David Beckworth muse in this podcast about monetary policy.
Loyola University Maryland economist Stephen J.K. Walters exposes three myths that fuel support for raising the minimum wage. (HT Richard Fulmer)
In progressive fantasyland, however, the laws of economics do not apply. According to the Left, we can more than double the cost of entry-level or unskilled labor from $14,500 to $30,000 annually (not even including employer-paid payroll taxes), and no one will lose his or her job. Apparently it would never occur to any employer to substitute cheaper capital (automation? humbug!) for labor. And cost increases will never be passed through to consumers, so we won’t see any reductions in demand that would otherwise provoke layoffs.
Markets that are at least reasonably free are a necessary condition for prosperity. But free markets are not a sufficient condition. This fact is why deregulation alone or free trade alone or tax-cutting alone should not be expected to spark and sustain widespread economic growth.
The case for free markets presumes the existence of a culture that encourages people to care about their families and their futures and that discourages people from looking with scorn upon entrepreneurs and merchants. Under these cultural pre-conditions, prosperity will indeed occur if markets are free.
Without these cultural pre-conditions, however, the economic situation is hopeless. People whose cultural norms prevent economic growth from occurring through markets will prevent economic growth from occurring through governments — even if, by some miracle, politicians possessed enough knowledge to successfully “grow” an economy.
Tim Worstall explains why “November is looking to be fairly dismal.”
