Sunday, February 09, 2020

Many reasons to ignore economics

Libertarians usually enjoy economics because economics say a lot about human behaviour and how government behavior influences human behavior.

That said, economics don't always "get it right". They rely on theory and statistics, and us humans tend to aim for other things than pluses and minuses.

However, it would benefit us a lot if more people would understand the basics of economics. For example, why do prices rise or fall? Why does a fixed salary not buy as many things today as 10 years ago? Why are people unemployed when there is plenty of work to do?

And actually, there are many people who actually benefit from this economic ignorance. Politicians are a prime example. Many of them have actually studied economics and know very well that many of their policies hurt us in the long run. However, in the short run the economic ignorance benefits the politician.

A good example is the minimum wage. In this informative article on fee.org, this is explained very well. Some years ago, the motive behind the minimum wage was outright racism. It was considered a benefit to throw out the minorities from the job market by raising the minimum wage above their usual salary.
And even today, such dubious motives color the politicians. The minimum wage is a tool, and it is applied despite the lessons of economics.

Be aware when a politician promises something for nothing. The minimum wage is such an example.