Monday, February 11, 2013

Minimum Wage and the Hawaii State Capitol

Dr. Ken Schoolland, best-selling libertarian author of The Adventures of Jonathan Gullible discussed earlier this week the proposed minimum wage law that's being heard before the Hawaii State Capitol. There was also some curious discussion on the House floor regarding that bill which you can view here.

Because politics is such a fluid thing, when it comes to elected officials one can never really tell whether or not what they are saying is what they actually believe or whether they are just strategic positioning, but I have the sense that for the majority of people the minimum wage discussion goes completely over their heads at Mach 5 and Angels 60 because while the politics is simple the economics of minimum wage is not. This is one of the reasons that I don't like politics because it has the tendency to water everything down and simplify it when in fact things are not as simple as one might think.

Mises Blog has an outstanding explanation of what's going on behind minimum wage and I highly suggest you read it before forming your opinion about Hawaii's proposed law. Read and learn friends, read and learn. I leave now you with a very heavy quote from Bastiat's 1850 Ce qu'on voit et ce qu'on ne voit pas:

"In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause - it is seen. The others unfold in succession - they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference: the one takes account only of the visible effect; the other takes account of both the effects which are seen and those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favourable, the ultimate consequences are fatal, and the converse. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, at the risk of a small present evil."

So. The big question. What kind of elected official or policymaker will you be? Will you be the kind that takes account of the visible effect or the kind that pursues the "great good to come"? I'll leave that to you to answer.

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