In his New York Times column Paul Krugman calls for raising the minimum wage from $7.25 an hour to $9.00 as President Obama proposed in his State of the Union address. Krugman asserts this would be good policy but acknowledges that raising the minimum wage to $20 per hour would “create a lot of problems.” (See Robert Wenzel’s critique of Krugman’s essay.)
In fact, Krugman acknowledges, “Every textbook — mine included — lays out the unintended consequences that flow from policies like rent controls or agricultural price supports.” But when it comes to labor issues, Krugman ignores his professions conclusions about interfering in markets and asserts that raising a minimum price, in this case the price of unskilled labor, would not have any adverse consequences for workers.
How does Paul reach that conclusion? He doesn’t. Krugman is using his prestige as a Nobel Laureate in Economics and his perch as a New York Times pundit to exclaim to the world that what he writes in his textbook for which he makes oodles of money is really BS, because what he really believes in is “public policy.” Will Krugman’s publisher edit his textbook with the warning? ”Paul Krugman claims to be an economist but does not believe in what he writes about markets. Read at your own risk.”
Ludwig von Mises anticipated Krugman and other “economists” decades ago when he wrote: ”There is, in fact, in the writings and teaching of those who nowadays call themselves economists, no longer any comprehension of the operation of the economic system as such.”
Paul Krugman is smart but does not believe in the principles of his own profession. He is in effect an apologist for the welfare state.
The above was republished with permission. You can visit Dr. Sabrin's web site here.