Friday, November 03, 2006

Economics and Values

Be true to your school

More that 600 economists have signed-up to ask for a minimum wage increase. This shows that you can have a Nobel in economics, or call yourself an economist, but still not illustrate economic laws. In other words, economists [95(?)% anyway] know that if you raise the price of something that people will demand less. So if you force the increase in a price of something (labor) the demand goes down. So how can the petitioning economists sign this document in good will? It must be because they are putting their own personal values ahead of economic laws. There is nothing wrong with this, we are human first before we are anything else.

In Workers opinion (I am honest here) it is too bad that these are the values of these obvious intellegent people (have you ever solved dynamic equilibrium modeling in is not for lazy and stupid people). Higher minimum wages means that those who are less productive - recovering drug addicts, alcoholics, single parents, homeless people, those out of the work force for longer periods of time - will then have a harder time getting jobs because employers cant hire them, give them a chance, because they will have to pay them too much. This is the argument for REMOVING minimum wage altogether not INCREASING it, to help the underclass. The middle class has something the underclass does not.

But speaking of values, perhaps the most important reason the minimum wage is wrong is that it takes away the right of individuals to contract with each other freely. Why does the government have the right to regulate private parties in private business doing voluntary things which only effect themselves? This is counter to the modern idea of a non-absolutist government, starting with John Locke in 1690.

And Sir Nicholas Stern the British economist is saying that doing something about global emmissions would be good for the economy. How can minimizing economic growth be good for the economy. That is an oxymoron! If he wants society to trade off the economy for the environment say so, but dont say that lower economic growth is good for the economy.