Socialist Economic Reasoning: Idiotic or Dishonest?

by | Sep 22, 2015 | Economics

Many people argue that liberals, socialists and progressives do not understand basic economics. I am not totally convinced about that.

Many people argue that liberals, socialists and progressives do not understand basic economics. I am not totally convinced about that.

Take the law of demand, for example, one of the fundamental principles of economics. It holds that the lower the cost of something the more people will take or do of it. Conversely, the higher the cost the less people will take or do something. By their actions, liberals fully understand the law of demand. Let’s look at some proof.

The Seattle City Council voted unanimously to establish a tax on gun and ammunition sales. Hillary Clinton has called for a 25 percent tax on gun sales. In Chicago, Cook County Board President Toni Preckwinkle proposed “violence taxes” on bullets to discourage criminals from buying guns. Let’s ignore the merit of these measures. They do show that gun grabbers acknowledge the law of demand. They want fewer gun sales and thus propose raising the cost of guns.

NBCBLK contributor Danielle Moodie-Mills said, “We need to stop misgendering people in the media, and there needs to be some type of fine that’s put into place for … media outlets … that decide that they’re just not going to call people by their name.” What Moodie-Mills wants is for us to be obliged, if a man says he’s a woman, to address him as her and, if a woman says she’s a man, to address her as him. The basic point here is that Moodie-Mills acknowledges the fundamental law of demand when she calls for FCC fines for media people who “misgender” folks. By the way, if I claimed to be the king of Siam, I wonder whether she would support my demand that I be addressed as “your majesty.”

In the Ohio Legislature, Rep. Bill Patmon, a Democrat from Cleveland, introduced a bill to make it illegal to manufacture, sell or display toy guns. The ban would apply to any toy gun that a “reasonable person” could confuse with a real one. A $1,000 fine and up to 180 days in jail would be imposed for failure to obey the law. That’s more evidence that liberals understand the law of demand. You want less of something? Just raise its cost.

Even San Francisco liberals and environmentalists understand the law of demand. They’ve proposed a ban that over the next four years would phase out the sale of plastic water bottles that hold 21 ounces or less in public places. Violators could face fines of up to $1,000.

Former U.S. Secretary of Energy Steven Chu once said, “We have to figure out how to boost the price of gasoline to the levels in Europe” in order to make Americans give up their “love affair with the automobile.” If gas prices rise high enough, Chu knows that Americans will drive less.

There you have it — abundant evidence that liberals, socialists and progressives understand the law of demand. But wait a minute. What about raising the cost of hiring workers through increases in the minimum wage?

Aaron Pacitti, Siena College professor of economics, wrote that raising the minimum wage “would reduce income inequality and poverty while boosting growth, without increasing unemployment.” The leftist Center for Economic and Policy Research has written a paper whose title tells it all: “Why Does the Minimum Wage Have No Discernible Effect on Employment?” The U.S. Department of Labor has a page on its website titled “Minimum Wage Mythbusters” (http://tinyurl.com/lt47co9), which relays a message from liberal economists: “Increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers.”

What the liberals believe — and want us to believe — is that though an increase in the cost of anything will cause people to use less of it, labor is exempt from the law of demand. That’s like accepting the idea that the law of gravity influences the falling behavior of everything except nice people. One would have to be a lunatic to believe either proposition.

Walter Williams (March 31, 1936 – December 1, 2020) was an American economist, commentator, academic, and columnist at Capitalism Magazine. He was the John M. Olin Distinguished Professor of Economics at George Mason University, and a syndicated editorialist for Creator's Syndicate. He is author of Race and Economics: How Much Can Be Blamed on Discrimination?, and numerous other works.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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