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. The main argument is that if a workers marginal productivity is 5 euro, they cannot be paid 6 euro. Now this presumes that the boss knows what the … Continue reading “The Advantage Of The Minimum Wage”

July 27, 2012EconomicsEconomic Theory, Economics, Free Market, Labor Market, Labour Market, Minimum Wage, Politics, poverty Leave a comment

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 … Continue reading “How Rich Countries Got Rich . . . And Why Poor Countries Stay Poor”

July 1, 2012BooksBook, Books, Comparative Advantage, Development, Economic Theory, Economics, Economy, Free Trade, History, poverty, Protectionism, Review, Wealth Leave a comment