The Advantage Of The Minimum Wage

There is a lot of debate over the minimum wage. An internet search of the topic will return with almost unanimous condemnation of it. It is blamed for unreasonably pushing wages too high and causing unemployment. It is decried as a major cause of economic problems rather than the solution. However, these arguments are based upon over simplified ideas and graphs. Now, most of them look nice and are easy to understand, but they should be judged on how well they describe the real world. The simple fact is they don’t really. Continue reading “The Advantage Of The Minimum Wage”

Rich Get Richer – Poor Get Poorer

It is often claimed that this recession is hitting all of us. It is said that the rich suffer just as much as anyone else, if not more. It is argued that we all must make a sacrifice as we are all in this together. However this simply isn’t true. In fact this crisis is resulting in even further increases in the gap between rich and poor. Inequality and poverty are rising to even higher heights. Austerity is making the poor suffer the most while leaving the rich untouched. Quite simply the rich are getting richer while the poor are getting poorer. Continue reading “Rich Get Richer – Poor Get Poorer”

Nationalise The Banks

Recently I was sitting in my economics lecture trying to figure out what to do about the banks so that we never have another financial crisis. After much thought, I came to the conclusion that banks are too important to be left to the bankers. The only way to avoid future financial crisis and massive bank bailouts is to nationalise the banks. Now I’m no out-and-out Communist driven by ideology alone. I don’t believe in one size fits all, in that everything should be privatised or nationalised, rather it depends upon the situation. Listen to my explanation with an open mind and you might find a certain logic in this seemingly drastic proposal. Continue reading “Nationalise The Banks”

Legalise Cannabis

The policy of banning drugs has failed. It is time to face the facts and legalise cannabis (also known as marijuana). This would have numerous benefits. It would deprive criminal gangs of their main source of revenue. It would raise large amounts of revenue for the government. It would ensure the safety and health of users is protected. It would free up large police resources and ensure they are focused on more serious crimes. There would be minimal negative effects as cannabis in its natural state is not a dangerous drug. People should be free to make choices about their lives and live with the consequences. Continue reading “Legalise Cannabis”

How Rich Countries Got Rich . . . And Why Poor Countries Stay Poor

I have just finished reading How Rich Countries Got Rich . . . And Why Poor Countries Stay Poor by Erik Reinert. The book is interesting for it engages what should be the main question of economics, why are some countries rich and other countries poor? This crucial question is woefully under researched and barely discussed in mainstream economics. I have completed two years of economics study in university without yet having heard an explanation for this phenomenon.

Reinert’s main argument is that the wealth of a nation is based upon the economic activities it specialises in. Poor countries are poor because they specialise in agriculture and the production of raw materials. This is an economic dead end as it does not allow for increases in productivity or innovation, which is how countries get rich. On the other hand, rich countries got rich by industrialising and building up a manufacturing base. Continue reading “How Rich Countries Got Rich . . . And Why Poor Countries Stay Poor”

Pay More, Get More

Once upon a time there was a car manufacturer. One day he proposed to double his workers wages. The business community was stunned. Was this man insane? A socialist? Did he not understand the laws of economics? Surely his business would instantly go bankrupt and nothing more would be heard of him. In response he simply pointed out that with a wage increase his workers could now afford to buy the cars they made. Business boomed, profits rose and the company redesigned the entire car industry. The man’s name was Henry Ford. Continue reading “Pay More, Get More”

Why Black People Are Paid Less Than White People

Decades after the Civil Rights Movement, Black workers earn significantly worse than White workers. The gap is either 40% or 25% depending on whether the average or median census data is used, but the fact remains that there is a large gap. Why is this the case? Is it due to discrimination or is it because of better skills and education levels among White people? Continue reading “Why Black People Are Paid Less Than White People”

Why Austerity Isn’t Working

Einstein once defined insanity as doing the same thing over and over again and expecting different results. For four years the government has being cutting spending and raising taxes. For four years we have been told it is the only way to reduce the deficit, restore growth and create jobs. Yet four years later we still have a large budget deficit, high unemployment and the economy is still contracting.  Continue reading “Why Austerity Isn’t Working”

How To End The Recession

We are in the midst of the worst recession since the Great Depression. It is therefore logical that we should see how that recession was ended for solutions to our current problems. It was solved by Continue reading “How To End The Recession”