Thursday, February 21, 2013

The Great Economic Delusion of the Left

I enjoyed this story. A great deal. When it comes to economic reality, European socialists/unions are fundamentally delusional. In fact, their opinions are often actively absurd. They simply don't understand that businesses will allocate capital to the locale of greatest prospective profitability. And they won't accept that in the 21st century, capital is inherently movable. These are basic truths. But in rejecting the facts; in embracing un-reality, leftists harm themselves and the rest of society. I've written many times about why I believe modern unions are bad news (a few examples below), but it's great to hear a senior business leader affirm that sentiment in such an overt and deliberate manner.

4 comments:

  1. I think you really overstate the effects of Unions on the economy. I could easily cite various periods of American history where Union power was strong, but so was the American economy. You could very easily say that correlation doesn't equal causation, and you would be correct. But I could also reverse the proposal and say that Unions shouldn't necessarily be blamed for our current dismal recovery.

    It's similar to the minimum wage. You could use the convincing argument that minmum wage acts as a price floor. This would create a surplus of labor and as a result, there would be more unemployment, particularly for the poor and the young. However, we all know that the economy is more complicated than a simple supply and demand graph, and there are plenty of theoretical arguments for a minimum wage (Take a "monopsony" as an example).

    The point here is, Union effects on the economy vary. Sometimes there effects can be good. Sometimes what they do can certainty be bad, just take Teacher's Unions as an example. But to blame them for the dismal recovery of the U.S. economy, give me a break (Not saying that you do this, but the right loves to unfairly scapegoat Unions).

    I do agree with your point that European Socialists are somewhat economically delusional. But let's not forget the shortcomings of Uncle Milty, particularly on his confusing views on inflation.

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    1. Thanks for another great comment. I'm certainly not trying to blame unions for the economic recovery - simply to argue that they actively hamper long term economic growth (and economic equality). Put simply, I'm just not a fan of them. But you make a legitimate point on Friedman (I prefer his broad ideas on ideology) and again, a strong rebuttal from a liberal point of view. I appreciate it.

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  2. It's a pleasure to comment here. Although I disagree with you on many things, I can always be sure that I will have a good, honest exchange on your blog. This is the sort of debate that is desperately needed, not the whining in Washington and cable news outlets.

    However, I want to clear, I didn't claim that you said our slow economic recovery should be blamed on Unions. Rather, I just think that the Republican Party unfairly points the finger at Unions when we should be focusing on other things, with the possible exception of Teacher's Unions (Which I believe cause real, serious harm to our education system).

    Friedman is an weird one. On the surface, he looks like a typical Libertarian, free market economist with nothing interesting to say. Even his more advance economic theories leave much to be desired. But then again, he's constantly misrepresented by some, so I'm not really sure if I'm getting a clear portrait of what he really thinks. I've heard great things about his book, "A Monetary History of the United States." I really need to read that to get a better picture of his ideas. Unfortunately my book stack is pretty big right now, don't know if I want to add that large book just yet.

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    1. Agreed- open, honest exchange is crucial. Thanks again.

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