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re: EBC Book #1 - Economics in One Lesson by Henry Hazlitt
Posted on 6/25/17 at 5:40 pm to Willie Stroker
Posted on 6/25/17 at 5:40 pm to Willie Stroker
Another great quote, but I'm not sure yet where in the book it came from as I found it while reading a Krugman vs. Hazlitt article:
LINK /
quote:
It is difficult to deny, Hazlitt wrote, “what has become in the last two centuries the most strongly established principle in economics—to wit, that if the price of any commodity or service is kept too high (i.e., above the point of equilibrium) some of that commodity or service will remain unsold. This is true of eggs, cheese, cotton, Cadillacs, or labor. When wage-rates are too high there will be unemployoment. Reducing the myriad wage-rates to their respective equilibrium points may not in itself be a sufficient step to the restoration of full employment (for there are other possible disequilibriums to be considered), but it is an absolutely necessary step. This is the elementary and inescapable truth that Keynes, with an incredible display of sophistry, irrelevance, and complicated obfuscation, tries to refute.”
LINK /
1
Posted on 6/25/17 at 5:43 pm to RedStickBR
Dear God. Krugman gets gored in that article:
quote:
Krugman has even explicitly argued the “case for a higher inflation rate” on the grounds that “it’s really, really hard to cut nominal wages”, so in lieu of “wage cuts”, just have “higher inflation”, which “would lead to lower unemployment”. Krugman constantly contradicts himself, but seems totally oblivious to the implications. So it is that he can argue that Hazlitt was “totally wrong” to argue that eliminating minimum wage laws would reduce unemployment and yet at the same time it is true that reducing workers’ real wages through inflation would reduce unemployment. It’s a case of Krugman offering a heads I win, tails you lose argument.
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