economics in 5 lessons

Two great resources for teaching basic economics to kids:

1. Today’s daily article at Mises.org: “Teaching Basic Economics to Fifth Graders”
2. Today’s new product at Shop Mises: Whatever Happened to Penny Candy?

on price-fixing and prostitution (sort of)

Thanks to the movementarian for pointing me to this:

Most visitors to the Cafe know the familiar arguments against minimum-wage legislation. Allow me here to spin the core argument — that minimum-wage legislation prices many low-skilled workers out of their jobs — by wondering aloud if proponents of higher minimum wages would ever make the following claim:

The market prices of most used-cars are too low for sellers of those cars to support their families. This fact is especially true for poor people, who, when they sell their old cars, almost always have only old, high-mileage, often dilapidated used-cars to sell. These people aren’t selling two-year-old Lexuses or BMWs. They’re selling 15-year-old Chevys and 20-year-old Hondas. So let’s enact legislation mandating that no used-car can sell for less than, say, $25,000. That way, anyone who sells a used-car is assured that he or she will earn at least enough money to support a family for a year.

I’m still quite fond of this great quotation from Nobel Laureate James M. Buchanan, commenting in The Wall Street Journal on the infamous Card-Krueger Study:

Just as no self-respecting 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 minimum 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.

I think I should point out, however, that comparing the honorable practioners of the peaceful sex trade with the bevy of camp-follers is unfair to the whores. Let’s leave working women out of it and just call the morally bankrupt bevy what they are.

To quote Hans Hoppe on the subject:

Of these two requirements — intellectual competency and character — the second is the more important, especially in these times. From a purely intellectual point of view, matters are comparatively easy. Most of the statist arguments that we hear day in and out are easily refuted as more or less economic nonsense. It is also not rare to encounter intellectuals who in private do not believe what they proclaim with great fanfare in public. They do not simply err. They deliberately say and write things they know to be untrue. They do not lack intellect; they lack morals. This in turn implies that one must be prepared not only to fight falsehood but also evil — and this is a much more difficult and daring task. In addition to better knowledge, it requires courage.

Re the subject heading, I was talking about intellectual prostitution, so-called, not the oldest profession.

Yes you could offer an analogy where sexually non-repressed do-gooders notice that thousand-dollar-a-night call girls are generally healthy and comfortable whereas street walkers are diseased and miserable, so therefore let’s legislate a $1000 minimum for sex workers … but I’m not going to spell the whole thing out …

We were all Bismarckians then.

In my “camouflaged as superliberalism” post, I link back to my Bismarckianism post of a year ago. Exactly a year ago today, as it turns out. I’m pleased to say that I think it holds up. I still agree with it. Either I was starting to figure things out back then or my mind is now calcifying into a complacent worldview.

Either way, here’s a classic episode of lowercase liberty:

Tuesday, June 21, 2005

We are all Bismarckians now.

When Rothbardians talk of our opposition to the “Welfare-Warfare State” we are often taken to be implying that the enemy is a coalition of left- and right-wing statists, with Welfare on the Left and Warfare on the Right. This works in the recent American context, but from a larger historical perspective it doesn’t work at all.

The first modern welfare state was a Machiavellian strategy on the part of Otto von Bismarck, the architect of the German Empire. There was nothing ideological about it. Bismarck knew that the impoverished masses were in favor of liberalism. The poor of the 19th century understood that free markets and free trade would improve their lives, and they recognized mercantilism, protectionism, and other forms of statist privilege as the enemies and oppressors of common people. By creating a new generation of dependents, Bismarck effectively denied the German liberals the support of the masses.

(Just as the state monopoly on education created a class of dependent academics and denied the liberals their old position in the intellectual mainstream.)

This was clearly socialism of the welfare-statist variety, but notice that it was not at all what we would currently call left-wing. It was not remotely egalitarian.

Left-wing socialism — the kind most people think of when they hear the S-word — is an egalitarian attack, not just on the economy, but on all the institutions of culture and civilization, both Old Regime and bourgeois. Right-wing socialism, in contrast, is the coercive attempt to give permanence to the current power establishment — The Establishment — a power base in constant fear of the changes that liberalism brings. Ironically, the bourgeoisie (the very “class” created by liberalism) and the poor and working masses (whose lot is improved by liberalism and ultimately made worse by the state) become the populist coalition behind right-wing socialism.

I go on to talk about fascism then and now.

Keep reading, if you like.