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Bonus Quotation of the Day…

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… is from page 451 and page 828 of the 3rd edition (1972) of what is correctly regarded by many to be the greatest economics textbook ever written, University Economics [2] by Armen Alchian [3] and William Allen; the first part of the quotation is Question #30 at the end of Chapter 22; the second part of the quotation is from the answer given, at the back of the book, to the question (link added):

images“If an enterprise cannot survive except by paying wages 75 cents or $1 an hour, I am perfectly willing for it to go out of business.  I do not believe that such an enterprise is worth saving at that price.  It does more harm than good, socially and economically.  It is not an asset; it is a liability.  So if this kind of business is killed by a minimum wage of $1.25, I for one will not be sorry.”  (George Meany [4], Hearings before Subcommittee on Labor Standards, 86th Congress, 2nd Session, 1960, p. 36 of Part 1 of printed hearings.)

a. How does this statement differ from one that says, “Any person who cannot produce a product worth at least $1.25 an hour should not be allowed to work as an employee?”

a. Doesn’t differ except in degree to which it reveals implication of what is said.

DBx: I thank Steve Pejovich – who earlier sent me this e-mail [5] – for reminding me just where this Alchian-Allen insight appears in the Third Edition of University Economics.

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