I hope it's a deception, but I fear it's a misconception.
The latter is more dangerous.
It reminds me of a critical article I read a few years ago, that explains a lot of economic policies.
(thread)
The latter is more dangerous.
It reminds me of a critical article I read a few years ago, that explains a lot of economic policies.
(thread)
https://twitter.com/WhiteHouse/status/1449768417309958153?s=20
This article has an interesting thesis: the false belief that prices have an allocative function but merely a redistributive one explains most of the economic BS heard over the past decades.
An example in the next tweet 👇
(🇮🇹 source: Noisefromamerika.org/articolo/perch…)
An example in the next tweet 👇
(🇮🇹 source: Noisefromamerika.org/articolo/perch…)
One implication of the false belief above is that taxes and minimal wages don't affect the price of labor and thus employment. Under such false belief, of course taxes and minimal wages are a no brainer! 🤦♂️
Another implication of the false belief above is that, if a state wants to make a good cheaper, it can just cap its price with a law. Because the false belief implies that prices don't affect supply, doing that has no externality other than capping company profits: good! 🤦♂️
The Italian article linked above provides more examples, but the thesis is simple: neglecting the allocative function of prices (i.e., their influence on supply and demand) is enough to explain most economic BS of the past decades.
And, perhaps, of future ones.
And, perhaps, of future ones.
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