Welcome to the newest edition of my ‘free market double standards’ series! Strap yourselves in and enjoy the ride – this one actually contains a couple of contradictions in economic theory, but since I consider the free market a neoclassical construct, and it’s my blog, it’s OK.
1. Dimishing Marginal Utility is an important cornerstone of economics. But increases in production and consumption are always desirable, no matter the stage of development.
2. Cantillion effects are an argument against government spending, but not capital controls or large firms.
3. Keynesianism is stupid and wrong! Wait, no it isn’t. I didn’t say it was.
4. We need monetary stimulus, but no capital controls to keep it in the domestic economy.
6. Aggregates are meaningless. But not the aggregates I constructed. They are better.
7. I champion individual responsibility. But when banks exploit government guarantees/policies by blowing up the economy, it’s the latter that’s to blame.
8. We need to encourage businesses to invest by reducing taxes and regulations. But let’s also increase their costs by raising interest rates.
9. Consumer sovereignty! But consumption taxes are the best (presumably because they are regressive).
10. The government should enforce property rights, and should pay for it with taxation. Taxation is theft.
12. High tax rates punish success, but we should increase tuition fees.
13. As Austrian economists, we will side with market monetarism, but not Keynesians saying similar things.
14. Economics is the study of how we allocate scarce resources, but the fact that the economy is ultimately constrained by scarce resources does not factor into it.
15. The division of labour is a phenomenon that allows people to work together to produce far more than any one person could. But it’s all my income, I earned it!
17. Intellectuals are unaccountable, imperious, have big egos and value verbal beauty over logic or evidence. As such, they shouldn’t be allowed to comment so much on society. Except me. (HT to Daniel Kuehn)
20. The market is the best judge of risk. But ignore what it’s saying about government debt levels, we need austerity NOW!
22. Perfect competition is defined as a state where everybody is a price taker. But there is still a price, despite the fact that nobody made it.
23. Raising taxes on the rich will achieve nothing because they will avoid it. But it will simultaneously destroy the economy, don’t do it!
We can safely abandon the doctrine of the eighties, namely that the rich were not working because they had too little money, the poor because they had much.
– John Kenneth Galbraith
Or maybe not.