And just as I was being driven to despair by people spouting 19th Century nonsense about labour markets being oppressive this and impoverishing that, along come Donald J. Boudreaux and Bryan Caplan, with an extra appearance by Don Bellante, to cleanse the palate.
Boudreaux maintains a wonderful blog called Cafe Hayek where he shares what's on his mind re economics and history. Boudreaux is one of two guys who can be found giving academic-level lectures on the most common objections to the existence of the capitalist mode of production.
Between him and Timothy D. Terrell the case in favour is made with reference to such things as the EFW Report, the hockey-stick graph, and the price in terms of work hours of goods and services over the last however many decades.
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| EFW results showing the superior performance - at least after several decades of consistent application - of less government involvement in trade as opposed to more. A more detailed look at the basis for these graphs can be found here. Image courtesy Wikipedia. |
Back to labour markets. The contention by many ridiculous people is that labour markets are examples of so-called buyers' markets, or monopsonies, the mirror image of monopolies. in which the buyer's enjoy some kind of market power. Just look at the unemployment measure above; the correlation between unemployment and economic freedom (free trade, free prices) is negative. More freedom, more jobs.
Don and Bryan agreed that "while there aren’t many upsides to being a low-skilled worker, one upside is that your skills aren’t highly specialized – and, so, you are quite flexible in moving..." between jobs. This makes it unlikely even for low-skilled workers - absent a minimum wage - to spend long periods of time unemployed.
I shall, as a burgeoning econ buff, explore the questions raised by Don Bellante's forebear Joan Robinson re monopsony power and marginal economic exploitation another day.
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