There are many real-world examples of compensating differences. Full-fledged doctors receive hourly pay that ranges between $80 and $157. A brand-new intern earns about $34 an hour. What do you think would happen to a hospital’s willingness to hire an intern if there were a minimum hourly wage for interns of, say, $60, $70 or $100? There would be less willingness. Worse, there would be reduced learning opportunities for brand-new doctors. Worse still is that a hospital administrator would say, “If I must pay that higher minimum hourly wage no matter whom I hire, I might as well hire the most qualified.” Thus, the higher minimum hourly wage would discriminate against the employment and skills acquisition of the least skilled intern.
To mark the 104th anniversary of the birth of Milton Friedman, Mark Perry offers a number of splendid quotations from Friedman. Here’s one of my favorites of all of Friedman quotations:
‘Fair’ is in the eye of the beholder; ‘free’ is the verdict of the market. The word ‘free’ is used three times in the Declaration of Independence and once in the First Amendment to the Constitution, along with ‘freedom.’ The word ‘fair’ is not used in either of our founding documents.
Arnold Kling ponders authoritarianism – and past and future U.S. presidents’ relationship to it. Here’s an especially thought-provoking slice:
8. By my definition, Mr. Trump speaks like an authoritarian.
9. However, I am more worried that the the country will move in authoritarian direction if Mrs. Clinton wins. Many in Mr. Trump’s own party are opposed to his authoritarianism. Not so with Mrs. Clinton and her party. She is Nixon without anyone to play the role of Howard Baker.