City Journal’s Propositions of Economics
Mark Thoma asks for comments on a set of supposed propositions of economic science that ran in the City Journal, a/k/a the glibertarian Manhattan Institute’s house organ. I thought the best thing I could do would be to fill in some ellipses from Mark’s extended citation:
1. The market economy is the most efficient of all economic systems.
Some market economies are more market, and more efficient than others. (At the same time? Hey, is that an underpants gnome over there?!)
2. Free trade helps economic development.
Unless it’s trade in intellectual property.
3. Good institutions help development.
However, we have no idea what exactly those are.
4. The best measure of a good economy is its growth.
Growth is also acceptable as a measure of a not-so-good economy.
5. Creative destruction is the engine of economic growth.
So is non-creative destruction (see also #4).
6. Monetary stability, too, is necessary for growth; inflation is always harmful.
Especially wage inflation.
7. Unemployment among unskilled workers is largely determined by how much labor costs.
Because some sectors of the economy only have supply curves.
8. While the welfare state is necessary in some form, it isn’t always effective.
1. Freedom. 2. ??? 3. Dinner on the table!
And don’t take away our cars.
9. The creation of complex financial markets has brought about economic progress.
In the finance and/or litigation sectors.
10. Competition is usually desirable.
But we’re flexible on this in surprising ways.