Our Economic Illiteracy
“Economics,” wrote Henry Hazlitt, “is haunted by more fallacies than any other study known to man.”
True. No epoch is immune to the scourge of economic illiteracy.
Yet, we find ourselves in a moment of especially unprecedented economic ignorance. We’ve come a long way since the days of Hazlitt’s editorializing in the New York Times. In the 1930s, believe it or not, the Times held the line on economic orthodoxy in the face of emergent quackery.
Fast forward and here are but a few favorite examples of economic illiteracy, ripped from the headlines of our most prominent rags:
- Corporate greed causes inflation
- Price controls are an effective way of “controlling” said inflation
- The minimum wage is a free lunch to low-skilled workers
- Racial discrimination is costless to the discriminator
- China is “beating” us at trade
- Profits are a wealth “transfer” from consumers to producers
- Prices are arbitrary and “set” by sellers
- Rent control expands housing availability for the poorest
- Trade or immigrants “steal” domestic jobs
- Women earn less than men for performing the same work
- Capitalism degrades the environment
- Material standards of living are falling in industrialized societies
- Monopolists can charge whatever they want
- Our economy is positively bristling with said monopolists
- Socialism generates higher living standards and more equitable economic outcomes than capitalism
Where to begin? Each of these statements is demonstrably false—economists propounding them are in a small minority—yet each also boasts many fervent exponents, not to mention shrill Twitterati advocates and an apparent majority of the public.
Take the first vapid claim. It possesses all the analytical horsepower of an engineer proclaiming that a plane fell from the sky due to gravity. For those of us taking our cue from Moses or Solzhenitsyn, we believe greed is a constant running through the center of every human heart. And a basic causal principle holds that explaining variation (changing prices) by appealing to a constant (greed) is a scientific non-starter. The econom
Article from Mises Wire
