September 2022

Sun Mon Tue Wed Thu Fri Sat
        1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30  
Blog powered by Typepad

« A Postcard from Hayek | Main | The French Connection Redux »


Feed You can follow this conversation by subscribing to the comment feed for this post.

Economic Nobel winners are not immune from ideological dogma. Many are severly infected by irrational beliefs. It is a testimony of the division of labor that these winners can be so twisted by liberal dogma and yet contribute to society.

Not sure you can say in many instances that they contributed. No doubt they are brilliant men, and their contributions exhibit a certain cleverness. But being clever is not the same as being good.

Gary Becker in a talk honoring Milton Friedman a few years ago said that the most important thing he learned from the Friedmans (both Rose and Milton) was that economics is just a game to be played by clever people. Instead, economics is a serious discipline that provides a framework for understanding the real world.

McCloskey has a wonderful discussion of these issues in several papers published in the EASTERN ECONOMIC JOURNAL --- smart is not the same things as good in the field of economics, and when you get caught up in the production of Kelley Green Golf Shoes called "Samuelsons" you sometimes think the intellectual range from M-N is wide ranging.

Add to that the ideological predelections of the mainstream of academic life, and you get the situation seen in these individuals signing this pettition.

If Milton Friedman thinks that economics is supposed to provide understanding of the real world will he oficially state that he was only joking when he wrote in his 1953 paper that the reality of assumptions does not matter?

Sensible talk about the minimum wage in Australia. It took 100 years!,20867,20599337-31478,00.html

To be worrying about what Friedman wrote in 1953 and whether he would "officially state" that he was joking is not worth the effort. Let's concentrate on the modern vibrancy of Austrian economics rather than nit-picking minor points about Friedman's philosophy. It is pointless and irrelevant.

Would it have hurt to actually read their arguments rather than recite dogma? Most economists are purely academics. Most economists are also mostly wrong. What's new? Unfortunately the writers above see workers only as profit consumers rather than profit generators. Of course they can be both, depending on how bright they are, how well they are trained, and how well they are treated. The harsh view (expounded above) is that you should expect people to still perform well on a ridiculously small wage or (presumably) they will be sacked. This leads directly to the conclusion that slavery is the best economic option.

In the real world, workers are humans, not cost centres, and usually the better the pay, the better the performance. That is accepted practice in the higher echelons of banking and in management, but somehow it is not acceptable down at the coal face. Why?

In practice though, a minimum wage is never a burden to any company because it is always so ridiculously low that few people actually receive it. Those who do, don't hang around long so the company turnover becomes massive, leading to continuous re-training costs. This naturally leads to sensible companies increasing their wages in order to keep knowledge in the company and reduce training costs. From that perspective a minimum wage is, in reality, totally irrelevant, or indeed "academic". Academics should get down from their lofty perch and visit the real world sometimes.

The comments to this entry are closed.

Our Books