Nobel Prize-winning economist F.A. Hayek had a lot to say about the failings of socialism. One of his comments dealt with the reality that many men believe to know what is best for each and every citizen (in the case of the US that would be over 300 million individuals). This belief is what Hayek termed the "fatal conceit." Fatal because it leads those in power to expand government control at the expense of individual freedom, free enterprise, and economic prosperity.
As Hayek put it, historical experience "ought to teach the student of society a lesson of humility which should guard him
against becoming an accomplice in men's fatal striving to control society - a
striving which makes him not only a tyrant over his fellow, but which may well
make him the destroyer of a civilization which no brain has designed but which
has grown from the free efforts of millions of individuals."
Those in government who believe that they know what is best for 300 million individuals and, thus, are compelled to tell us all how to live are quilty of this fatal conceit.
Have a nice day.
DWD
PS--I extracted this Hayek quote from the blog of Star Parker (which I highly recommend). I'm quite sure that she wouldn't mind my passing it along.
Wednesday, November 27, 2013
Wednesday, November 13, 2013
ECONOMIC MISCONCEPTION #3 -- THE MINIMUM WAGE
This is the third in a series of posts relating to how the press
has misled many conservatives into supporting liberal positions on certain
economic issues rather than upholding the conservative point of view.
Misconception: Raising the minimum wage is good for the poor.
A recent Gallup opinion poll (Nov. 2013) found that 69% of Americans favor raising the minimum wage and, somewhat surprisingly, 58% of Republicans also favor an increase. This opinion is in direct opposition to the fundamental principle of supply and demand which states that if you raise the price of something (like labor) the demand for it will go down. That is, if you force businesses to pay more for labor they will cut back on the use of it.
Obama is preparing to push for an increase in the minimum wage to $9 per hour. The reality is that some people are simply not worth $9 per hour. So those unfortunate soles will be laid off or not hired as would have been the case. Thus, the end result is that many of the lowest wage earners (i.e., the poor) will lose their jobs or remain unemployed and become even more unemployable. Raising the minimum wage relegates yet more of the poor to the welfare rolls. Heck, if raising the minimum wage was the solution to helping the poor get ahead why not raise it to $20 per hour?
Raising the minimum wage harms exactly those persons who the policy is supposed to benefit. Just another example of the unintended consequences of government policies. The forces of supply and demand operate 24/7, everywhere around the world, without exception. No government policy, no matter how well meaning, can negate this reality.
Have a nice day.
DWD
Misconception: Raising the minimum wage is good for the poor.
A recent Gallup opinion poll (Nov. 2013) found that 69% of Americans favor raising the minimum wage and, somewhat surprisingly, 58% of Republicans also favor an increase. This opinion is in direct opposition to the fundamental principle of supply and demand which states that if you raise the price of something (like labor) the demand for it will go down. That is, if you force businesses to pay more for labor they will cut back on the use of it.
Obama is preparing to push for an increase in the minimum wage to $9 per hour. The reality is that some people are simply not worth $9 per hour. So those unfortunate soles will be laid off or not hired as would have been the case. Thus, the end result is that many of the lowest wage earners (i.e., the poor) will lose their jobs or remain unemployed and become even more unemployable. Raising the minimum wage relegates yet more of the poor to the welfare rolls. Heck, if raising the minimum wage was the solution to helping the poor get ahead why not raise it to $20 per hour?
Raising the minimum wage harms exactly those persons who the policy is supposed to benefit. Just another example of the unintended consequences of government policies. The forces of supply and demand operate 24/7, everywhere around the world, without exception. No government policy, no matter how well meaning, can negate this reality.
Have a nice day.
DWD
Monday, November 4, 2013
ECONOMIC MISCONCEPTIONS #2 -- TAX HAVENS
This is the second in a series of posts relating to how the liberal press has misled many conservatives into supporting liberal positions on certain economic issues rather than upholding the conservative point of view.
Misconception: Tax havens are bad.
The term "tax haven" is a political term coined by liberals to disparage individual freedom and free trade. The liberal's goal in demonizing so called tax havens is to extract more tax revenue enabling the further expansion of big government.
Tax havens are nothing more than sovereign nations with low tax rates (Switzerland for example). Low tax rates are a good thing and they are beneficial to U.S. citizens. Low tax nations pose competition to high tax nations (such as the U.S. which, some may be surprised to hear, has the highest corporate tax rate among developed nations). This competition puts pressure on high tax nations to lower their taxes in order to compete for business capital.
The basic conservative concepts these: Competition is a good thing and taxes are a bad thing. Competition among nations relating to tax havens put pressure on the U.S. government to lower corporate and other business taxes which are bad for the economy and which facilitate the expansion of big government.
And finally, any attempt by governments to regulate or block the movement of funds to tax havens is an attack on personal freedom and free trade.
Have a nice day.
DWD
Misconception: Tax havens are bad.
The term "tax haven" is a political term coined by liberals to disparage individual freedom and free trade. The liberal's goal in demonizing so called tax havens is to extract more tax revenue enabling the further expansion of big government.
Tax havens are nothing more than sovereign nations with low tax rates (Switzerland for example). Low tax rates are a good thing and they are beneficial to U.S. citizens. Low tax nations pose competition to high tax nations (such as the U.S. which, some may be surprised to hear, has the highest corporate tax rate among developed nations). This competition puts pressure on high tax nations to lower their taxes in order to compete for business capital.
The basic conservative concepts these: Competition is a good thing and taxes are a bad thing. Competition among nations relating to tax havens put pressure on the U.S. government to lower corporate and other business taxes which are bad for the economy and which facilitate the expansion of big government.
And finally, any attempt by governments to regulate or block the movement of funds to tax havens is an attack on personal freedom and free trade.
Have a nice day.
DWD
Subscribe to:
Posts (Atom)