At the simplest level, economics can better show us the consequences of our actions. Less simple are cases in which we don't have the knowledge to predict the full consequences. Global warming and climate change are examples.
Edmund PhelpsRead
There would be plenty of justification to raise revenues in order to subsidize businesses that employ low-wage workers. But there can be no justification for pandering to the economy's entire bottom half merely to attract its votes.
Interpretation
What this quote means
The quote emphasizes the importance of responsible economic policy over populism.
Edmund Phelps argues that while it is reasonable to consider raising revenues to support businesses that pay low-wage workers, it is not acceptable to lower standard economic practices just to gain favor with voters from the lower economic strata. He suggests that ethical governance should prioritize effective economic policies that benefit society as a whole rather than resorting to tactics aimed solely at appealing to those in the lowest economic positions for political gain.
Themes
EconomyPolicyLow-WageBusinessGovernment
In practice
Example use cases
During a public policy debate, this quote can highlight the need for sustainable economic strategies.
More from Edmund Phelps
All quotes →If every effect of any new products or methods were required to be known before they could be produced and marketed, they would not be true innovations - and thus not represent new knowledge of what people would like, if offered.
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The good life, as it is popularly conceived, typically involves acquiring mastery in one's work, thus gaining for oneself better terms - or means to rewards, whether material, like wealth, or nonmaterial - an experience we may call 'prospering.'
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The epic story of the West is the development in the 19th century of a mass prosperity the world had never seen and its near-disappearance in one nation after another in the 20th.
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Entrepreneurs have only the murkiest picture of the future in which they are making their bets, and also there is ambiguity: they don't know when they push this lever or that lever that the outcome is going to be what they think it is going to be - there is the law of unanticipated consequences.
Edmund PhelpsRead
When the word 'morality' comes up in connection with economics, income distribution and financial stability are usually the issues. Is it moral for rich countries to use such a high proportion of the world's resources or for investment bankers to earn large bonuses?
Edmund PhelpsRead
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