Economics Of Discrimination

If we were rational logical people living in a neo-classical world there would be no discrimination. People would only be judged according to their productivity and nothing else. All races would receive equal pay and job opportunities. In fact Milton Friedman even developed a theory in which racist firms would be driven out of business by inclusive firms. Yet discrimination does exist. For generations many businesses would only hire white people. Even today ethnic minorities are paid less than white people and suffered from higher unemployment. The perfect neo-classical utopia does not exist. Social norms determine action just as much as pure economics. We need government to right the wrongs of the free market. Continue reading “Economics Of Discrimination”

The Market Is Never Free

It is common to hear people call for the removal of the government from the market or launch defences of the ‘free’ market. It is asserted that governments always get things wrong and that regulations only make things worse. Conservatives proclaim that if the economy was only left in the hands of the free market everything would be better. However there is no such thing as the free market. It doesn’t exist and probably never did. Every market has some rules and regulations that even conservatives admit are necessary. We have grown so use to them that we don’t see them but they are still there. The market is never free. Continue reading “The Market Is Never Free”

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”