Elizabeth Warren's Unwarranted Wage

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Ludwig von Mises Institute :

Elizabeth Warren's Unwarranted Wage

Mises Daily: Tuesday, March 26, 2013 by Walter Block

 

Murray N. Rothbard used to say that it is impossible to convince the economically illiterate with reductios ad absurdum. Why? This is because the very purpose of this type of logical argument is to embarrass our friends on the Left (and the Right too, sad to say, see below) by taking up the premises of their proposals and applying them to cases not contemplated by them. But suppose they are unable to be embarrassed? Suppose they cannot grasp the fallacy of their own position even when it is obvious to all of those with even half a brain? Then, while the logic of the critique is impeccable, it still cannot convince the intelligence-deprived true believers.

 

For example, to the advocates of rent controls who believe this legislation would help the poor, posit a rent control of 1 cent per month per apartment ($.01). Hopefully, these people who favor “social justice” in housing would then realize that at such a low monthly rental, no landlord could afford to pay for the expenses necessary to house tenants, and this would spell the death knell of the residential rental market. Then, the economist would point out that any rent below the free-market level would reduce, but not now necessarily to zero, the supply of apartments, and this would create a shortage, the exact opposite of what the rent control advocate supposedly wants and expects. But if this “champion of the poor” did not grasp the first point, instead steadfastly rejecting it, the second would not convince him either.

 

Something of the same sort is now occurring with regard to the debate over the minimum wage law. Obama wants to raise its level from $7.25 to $9.00 per hour. His policy is aimed, presumably, in the direction of helping the poor, by raising their compensation from the former to the latter.