The minimum wage myth

11 Jan, 2018 at 19:47 | Posted in Economics | 4 Comments

 

Lo and behold!

But of course — when facts and theory don’t agree, it’s the facts that have to be wrong …

buchC6Just as no physicist would claim that “water runs uphill,” no self-respecting economist would claim that increases in the minimum wage increase employment. Such a claim, if seriously advanced, becomes equivalent to a denial that there is even minimal scientific content in economics, and that, in consequence, economists can do nothing but write as advocates for ideological interests. Fortunately, only a handful of economists are willing to throw over the teaching of two centuries; we have not yet become a bevy of camp-following whores.

James M. Buchanan in Wall Street Journal (April 25, 1996)

4 Comments

  1. The Buchanan quotation prompts the question, aren’t all economists merely advocating for an ideological position? Aren’t we all telling stories? (I recall a previous blog post quoting Schiller expressing a similar thought about economist stories.) Professor Syll has many blog entries on the inadequacy of statistics; aren’t the different stories about minimum wage all true, and/or all false? Aren’t stories about involuntary unemployment and the desirability of increasing output and employment with stable prices, just stories? Why should I believe that cutting more trees and digging up more mountains, both for mining and landfills, is good? Do stories about stable prices ignore housing and asset price inflation, which are redefined as wealth creation? Can I tell a story about investments in the world financial sector returning created money that lets investors afford rising asset prices? Has Buchanan ever stood on a beach and watched water run uphill as the tide comes in? The gravity of the earth may push water downhill but the gravity of the moon pushes water uphill …

    Comment by Robert Mitchell— 16 Jan, 2018 #

  2. Dr Syll.
    To add a frisson to your repeated post re Mr Buchanan you could append some links to him doing the full Dr Strangelove on BBC documentary “The Trap”

    Comment by Ctesias62— 12 Jan, 2018 #

  3. In the US, we have “alternative facts.”

    Comment by Tom Hickey— 11 Jan, 2018 #

    • Yes ideed Tom, and we here abroad seem to adopt the worst of your ideas sadly, and partronize them to Saints and give them the so called “Nobel Prize” sadly. I have the misfortune to be a undergradute when he still was a bright shining star,sadly!All the best to you, Mike and Frank and all the others Jan

      Comment by Jan Milch— 12 Jan, 2018 #


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