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Quotation of the Day…

… is from page 1 of Edwin Cannan’s Preface to his 1914 tract, Wealth: A Brief Explanation of the Causes of Economic Wealth:

We should not tolerate a person who professed to explain the inefficiency of some locomotive and to provide a remedy for it, if we knew that he had never studied mechanics and was quite ignorant of the construction and working of locomotives. The existing economic organization is a much more complicated and delicate piece of machinery than a locomotive, and yet, whenever some imperfection in the work done becomes particularly prominent, we are overwhelmed with suggestions about causes and remedies by persons who have not the smallest general knowledge of the reasons why the machinery works at all. It often happens that a man of considerable eminence in his own profession, but without the smallest acquaintance with the fundamentals of economics, will make a suggestion which is precisely on a level with the proposition that the locomotive would be much more efficient if its weight were taken off the driving wheels so that they could revolve more easily.

DBx: And so matters remain more than a century later. People with no – or distorted – exposure to economic principles continue to believe about the economy the equivalent of what flat-earthers believe about the cosmos. Does trade destroy some particular jobs in the domestic economy? Yes! Therefore we in the domestic economy are impoverished by trade! Are some workers paid less than is thought acceptable by professors of English and sociology? Yes! Therefore the imposition or raising of a minimum wage will improve all of these low-paid workers’ welfare! Are there some people unemployed? Yes! Therefore more government spending will cure this problem! Does today’s economy not look like the lovely economy that my nostalgia-laden mind supposes is optimal? Yes! Therefore everyone will be improved if government engineers the economy to match what I envision in my nostalgia-laden mind! Are rents high? Yes! Therefore government control over rental rates will keep these rates down and thereby improve the welfare of tenants!

These and other ignorant opinions remain prevalent. They are likely always to remain so.

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