Tuesday , October 15 2019
Home / Jay Taylor Media / Debunking Vox’s Article on “Debunking Economic Laws”

Debunking Vox’s Article on “Debunking Economic Laws”

Summary:
By: Per Bylund Vox is a never-ending fountain of ignorance. Like this piece about four ‘laws’ of economics that are simply wrong. Some of these claims are indeed wrong, but it’s also wrong to claim that economists make them. Let’s look at each one. 1) Going below the natural rate of unemployment could spark an inflationary spiral. I have no idea how the writer could think this is an “iron law” (his term) yet includes the words “could spark.” How is that a law at all? 2) Everybody wins with globalization. No, economists don’t claim this. Globalization is a win, but there are transitional pains and reallocations of resources. Jobs in inefficient industries go away, jobs are created where labor is more valuable. 3) Deep budget deficits will crowd out private investment. Another

Topics:
Mises Institute considers the following as important:

This could be interesting, too:

Mises Institute writes Have Free-Market Economists Conquered the World?

Chris Vermeulen writes US Major Indexes Retest Critical Price Channel Resistance

Mises Institute writes The Mythology of the “Natural Interest Rate”

Mises Institute writes The Nobel Prize in Economic Science Awarded to Silly, Politically Correct, Technocrats

By: Per Bylund

Vox is a never-ending fountain of ignorance. Like this piece about four ‘laws’ of economics that are simply wrong. Some of these claims are indeed wrong, but it’s also wrong to claim that economists make them.

Let’s look at each one.

1) Going below the natural rate of unemployment could spark an inflationary spiral.

I have no idea how the writer could think this is an “iron law” (his term) yet includes the words “could spark.” How is that a law at all?

2) Everybody wins with globalization.

No, economists don’t claim this. Globalization is a win, but there are transitional pains and reallocations of resources. Jobs in inefficient industries go away, jobs are created where labor is more valuable.

3) Deep budget deficits will crowd out private investment.

Another strange misrepresentation. Why would anyone think budget deficits crowd out private investment? It’s not the deficit doing this, but government investments–whether or not financed by budget deficits.

4) A higher minimum wage will only hurt workers.

Of course the author refers to the one study that found a case where this appears to not have happened. Yet it’s still a misunderstanding, because minimum wage laws (set above the market wage) cause fewer jobs than there otherwise would have been. It doesn’t mean people will be laid off en masse, only that jobs aren’t created in such numbers as would otherwise have happened. You have to be a progressive to not see this. And then, of course, you will refer to (widely criticized) study by Alan Krueger as though there are not hundreds, if not thousands, studies showing exactly what theory tells us: that forcing employers to pay workers more than they contribute to the bottom line means those workers won’t get the jobs. (If this logic seems odd, it’s because you’re not thinking logically.)

Formatted from Twitter @PerBylund

Powered by WPeMatico

Mises Institute
The Mises Institute, founded in 1982, teaches the scholarship of Austrian economics, freedom, and peace. The liberal intellectual tradition of Ludwig von Mises (1881-1973) and Murray N. Rothbard (1926-1995) guides us. Accordingly, we seek a profound and radical shift in the intellectual climate: away from statism and toward a private property order.

Leave a Reply

Your email address will not be published. Required fields are marked *