Thursday, October 2, 2008
The Ethos of the Economist
When Walter Williams tells me that raising the minimum wage harms unskilled workers, particularly African American teens who become unemployed because they are priced out of a job, I agree with him.
When a certain other professor tells me raising the minimum wage will raise unemployment and hurt the economy and we shouldn't do it, I start to wonder about things that could keep wages below the equilibrium price, and that raising the minimum wage creates winners as well as losers because many people maintain their job and receive the additional wage.
They prove their points with the same graphs, they draw price floors across the same supply and demand curves and point to the surplus of labor (unemployment). However, I know Walter Williams sincerely cares about poverty in the world and sees the free market as the best solution to it. I am convinced my other professor only advocates the free market because it justifies his greed, but he packages it as humanitarian because it sells better that way.
I'm not sure if Economics has a good explanation for why I am willing to buy one product from one seller, but not to buy the same product from another seller.
Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty