The real tragedy of minimum wage laws is that they are supported by well-meaning groups who want to reduce poverty. But the people who are hurt most by higher minimums are the most poverty stricken.
Interpretation
Minimum wage laws aimed at reducing poverty can inadvertently harm the very people they intend to help.
Milton Friedman argues that minimum wage laws, while supported by good intentions to alleviate poverty, often lead to unintended consequences that can worsen the economic situation for those they aim to assist. The increased wage floor may lead to fewer job opportunities for the most impoverished individuals, illustrating the complexity of economic policies where well-meaning interventions can sometimes create more harm than good.
In practice
During a discussion about economic policy, one might quote Friedman to illustrate the unintended consequences of minimum wage laws.
The economic miracle that has been the United States was not produced by socialized enterprises, by government-unon-industry cartels or by centralized economic planning. It was produced by private enterprises in a profit-and-loss system. And losses were at least as important in weeding out failures, as profits in fostering successes. Let government succor failures, and we shall be headed for stagnation and decline.
Universities exist to transmit knowledge and understanding of ideas and values to students not to provide entertainment for spectators or employment for athletes.
There is no place for government to prohibit consumers from buying products the effect of which will be to harm themselves.
There is one and only one social responsibility of business - to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.
The great danger to the consumer is the monopoly -whether private or governmental. His most effective protection is free competition at home and free trade throughout the world. The consumer is protected from being exploited by one seller by the existence of another seller from whom he can buy and who is eager to sell to him. Alternative sources of supply protect the consumer far more effectively than all the Ralph Naders of the world.
The strongest argument for free enterprise is that it prevents anybody from having too much power. Whether that person is a government official, a trade union official, or a business executive. If forces them to put up or shut up. They either have to deliver the goods, produce something that people are willing to pay for, are willing to buy, or else they have to go into a different business.
Globalisation, for me, seems to be not first-order harm, and I find it very hard not to think about the billion people who have been dragged out of poverty as a result.
Every economy exists, no matter what the level of democracy, has elements of crony capitalism. It's - given human nature and given the democratic structures, which we all, I assume, adhere to, that is an inevitable consequence.
The Federal Reserve, like other central banks, wields powerful tools; democratic accountability requires that the public be able to see how and for what purposes those tools are being used.
Credit markets were originally created to serve human needs; to provide businesses and individuals with capital to start or expand businesses or fulfill other financial needs.
The time has come to end this charade. The debts are unaffordable. If they won't cancel the debts I would suggest obstruction; you do it yourselves. Africa should say: 'thank you very much but we need this money to meet the needs of children who are dying right now so we will put the debt servicing payments into urgent social investment in health, education, drinking water, control of AIDS and other needs.'
The desire for economic prosperity is itself not culturally determined but almost universally shared
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