I’m going to the Ohio High School Basketball Tournament this weekend not and not just to watch the games. I like to observe the economic principles at play in the free market for tickets,(aka scalping) that takes place outside of the arena, it is a real education. This video explains whats going on.
Most of the people who participate in the free market of ticket scalping, have no understanding of the economic principles they are demonstrating by their actions. Supply and demand, subjective value, (more…)
Thomas Sowell discusses the effect of foreign aid on human capital in the countries receiving it in this interview with William F. Buckley on his show Firing Line. It is from his book “The Economics And Politics Of Race”, written in 1983, (a book I highly recommend). If foreign aid affects human capital in the countries who receive it, how much does our bloated welfare system, and Government regulations affect the human capital of our own country today?
Quotes from the video about foreign aid, “..you are simply transferring the wealth that has already been created, but you are not transferring the ability to create that wealth……too often in foreign aid you are rewarding people for doing all the wrong things….you are subsidising irresponsibility.”
Physical capital is the tools, machines, and infrastructure used to produce goods and services, which in turn increases the wealth of a country. Human capital is the knowledge and skills needed to maintain and increase this physical capital stock. (more…)
Economic theory suggests an excessive minimum wage may raise unemployment as it fixes a price above demand for labour, although a reasonable minimum wage enhances growth because when poorer workers have more to spend it stimulates effective aggregate demand for goods and services. (Photo credit: Wikipedia) Read about what is in bold print below.
MINIMUM WAGE RHETORIC
In the State of the Union address, the President called for the minimum wage to be raised to $9 an hour. Politicians who propose minimum wage laws are trying to gain the moral high ground on the “morally inferior” people who oppose these laws, they are not trying to help low wage low skill workers. These politicians think that making a law mandating employers pay their employees higher wages, will fool the public into thinking they are morally superior to their opponents. They prey on the emotion of the public and hope the public will not analyse what happens when wages are set higher than they would be under unhampered market conditions. Unfortunately the consequences of the legislation turn out to be different from the utopian promises that the public, and the media, so desperately want to believe can be delivered.
MINIMUM WAGE REALITY
Labor is supplied on the market like any other good, but the public has been brainwashed by Marxist propaganda to believe that an individuals labor is special, and should not be subject to the morally neutral forces of supply and demand. (more…)
leech (Photo credit: KCBIO)
PRODUCTION AND EXCHANGE
Government can only exist if it is funded. In the market, people produce a good or service, and exchange it for a good or service that someone else has produced. You might think that through this exchange process each of us funds each other, but that would be incorrect. Each person funds himself from what he produces. If I don’t produce anything, not only would I have nothing to use for exchange, I would have nothing to consume. If I decide not to produce, I would have to depend on other people’s generosity, or I would have to steal someone’s production (more…)
Intellectuals and Society (Photo credit: arellis49)
Read Thomas Sowell’s “Random Thoughts” column.
Here are a couple of samples.
“I can’t get excited by the question of whether Senator Robert Menendez had sex with a prostitute in Central America. It is her word against his–and when it comes to a prostitute’s word against a politician’s word, that is too close to call”.
“One of the talking points in favor of confirming Chuck Hagel as Secretary of Defense is that he was a wounded combat veteran. How does that qualify anyone to run the whole military establishment? Benedict Arnold was a wounded combat veteran!”
Now read two articles by Thomas Sowell titled “Prophets And Losses, and “Prophets And Losses II”. Dr. Sowell talks about what we have been discussing in the last few articles, (more…)
PROFITS AND LOSSES
This is a video from Libertypen.com, starring the great Walter E. Williams. He is speaking about the role of profits and losses in the free market. Many people think that free market capitalism is all about profits, but free market capitalism is a profit and loss system. Losses tell businesses to stop producing because there is not enough consumer demand to support the activity at that particular price. Because the business bears the loss, (more…)
In my previous post Federal Reserve Policy Makers Have An Incestuous Intellectual Relationship With Each Other, we talked about how our political aristocracy and the intellectual elite have no knowledge outside of their vision of the world, a vision which was inbreed into them by their education, their job, and the people with whom they associate. This video, from economicpolicyjournal.com, is an example.
SELF PROCLAIMED INTELLIGENCE
The interesting part of this video is Geithner’s inability to realize his narrow experience is a bad thing. Going from grad school directly to the Treasury, then spending the rest of your professional life in a policy job, isn’t a recipe for developing a wide base of knowledge on which to make policy decisions. The policies they come up with won’t work anywhere outside of the sterile intellectual laboratory that exists only in the minds (more…)
http://www.youtube.com/watch?v=wWkUaJId7pM
This is the kind of common sense that Americans used to be noted for. It sounds like Mr. Poilievre is battling the same socialist thinking that liberty minded people in the U.S., have been trying to hold the line against for decades. I wish more of our politicians had the kind of brass that this man has.
0-3:40 is about the U.S. problem. 4:39-6:00 is about Europe’s problems. 6:00-7:20 is a must.
Here are a few quotes from the speech. (more…)
Even though it is not planned by any particular person or group of people, the outcome of the free market process can be seen all around us in the incredible standard of living we enjoy. When our country’s main health problem is obesity and not malnutrition, and it seems that everyone owns a cell phone, we are rather well off as a country.
The main problem we face now and moving forward is, will we allow free market capitalism to continue to increase our standard of living, or because we don’t like how wealth is “distributed” as a result of this process, will we (more…)
AUSTRIAN ECONOMICS ADDICT 