[jmherbener]

The classic works in this area are by Frederic Bastiat, especially Economic Sophisms and Harmonies of Political Economy.

https://mises-media.s3.amazonaws.com/The%20Bastiat%20Collection_4.pdf

Milton Friedman’s book, Free to Choose, has a few relevant chapters:

http://www.proglocode.unam.mx/sites/proglocode.unam.mx/files/docencia/Milton%20y%20Rose%20Friedman%20-%20Free%20to%20Choose.pdf

Robert Higgs’s book, Against Leviathan addresses the issue:

https://www.goodreads.com/book/show/1033406.Against_Leviathan

F.A Hayek grappled with the issue in two famous articles, The Use of Knowledge in Society and Competition as a Discovery Procedure:

https://home.uchicago.edu/~vlima/courses/econ200/spring01/hayek.pdf

https://mises.org/library/competition-discovery-procedure-0

Israel Kirzner’s works discuss the issue. For example, Competition and Entrepreneurship:

https://books.google.com/books/about/Competition_and_Entrepreneurship.html?id=E9DAt745zhIC

For some modern “spontaneous order” works, you might consult the article by Peter Leeson, “Anarchy Unbound: How Much Order Can Spontaneous Order Create,” in Handbook of Contemporary Austrian Economics.

https://www.elgaronline.com/view/9781847204110.xml

Also, take a look at the book, Out of Poverty, by Ben Powell in which he explains how markets give the proper social context for helping the poor and how state regulation makes their condition worse.

https://mises.org/library/sweatshops-way-out-poverty

[jmherbener]

Say’s law covers all outcomes in a market economy, whether progressing normally or experiencing boom, crisis, bust, and recovery.

The import of Say’s Law is that there can be no general overproduction on the market economy as a whole.

Here’s Murray Rothbard on Say’s Law:

https://mises.org/library/says-law-markets

The cluster of error occurs during the boom as cheap credit makes certain lines of production unsustainably profitable. Investment, then, is the locus of errors that must be corrected during the bust. As you say, consumption declines tend to follow declines in investment during the bust.

One can look for asset price bubbles during a credit expansion as evidence of an underlying cluster of error. Of course, these are easier to see after the fact.

Here’s Frank Shostak on asset price bubbles:

https://mises.org/library/can-asset-price-bubbles-be-harmless

[jmherbener]

Raising the minimum wage does not affect overall price inflation. It merely shifts entrepreneurial demands away from low-wage labor and toward capital equipment and higher-wage labor. To the extent that the reduced production of output increases price of goods produced by minimum-wage labor, consumers must demand less of other things to maintain their demands for such output. Prices go up on some goods and down on other goods.

Monetary inflation which causes price inflation will, as you suggest, reduce the impact of a particular level of the minimum wage over time. As the general purchasing power of the dollar falls, a given level of minimum wage declines relative to the rising prices of other inputs. As a result, the unemployment generated by a particular level of the minimum wage is reduced over time.

Here’s a wiki on minimum wages:

https://wiki.mises.org/wiki/Minimum_wage

[jmherbener]

The PPF is usual thought of as the maximum potential output of the economy, given its resources and technology. If so, then a free market (with its array of prices) will result in production at a point on the PPF. Prices distorted by government intervention will result in production at a point interior to the PPF. The economy will produce less than its potential.

[jmherbener]

You’re most welcome. I hope to meet you at MU some day. They do have low cost housing and scholarships:

https://mises.org/events/mises-university-2019

[jmherbener]

You can track such data from the Bureau of Labor Statistics, Consumer Expenditure Survey:

https://www.bls.gov/cex/

Here is a BLS study using such data:

https://www.bls.gov/cex/anthology/csxanth6.pdf

[jmherbener]

Economists tend not to go beyond the general claim that entrepreneurs can use the technique of either withdrawing or augmenting some of the labor service and then note the decrease or increase in overall revenue. Of course, the entrepreneur does not have to actually conduct such an experiment, he can anticipate what would occur and then compare the result to the wage he must pay to hire that labor service in deciding whether or not to hire.

You might take a look at Book 3, Chapter 10 of Eugen von Bohm-Bawerk’s book, The Positive Theory of Capital:

https://mises.org/library/positive-theory-capital

[jmherbener]

Here are a few pieces on syndicalism:

https://mises.org/library/syndical-syndrome

https://mises.org/library/anarcho-syndicalism-recipe-ruin

Here is Peter Klein on CSR:

https://mises.org/power-market/stakeholders-and-corporate-social-responsibility

[jmherbener]

The economic calculation argument is that socialism, defined as state ownership of the means of production, does away with monetary prices for the means of production entirely. There are no money wages, no land prices, no prices of capital goods. Without such prices, there cannot be an economizing arrangement of resources.

The empirical evidence supporting this theory is overwhelming: West Germany v. East Germany; South Korea v. North Korean; Hong Kong v. mainland China before market reforms.

The freedom indexes show the correlation between freer enterprise and higher and faster growing standards of living. For example:

https://www.heritage.org/index/

[jmherbener]

Economic calculation is using market-clearing prices to make economizing decisions about consumption, production, and exchange. Price controls, to the extent that they are enforced, supplant market-clearing prices and therefore, impair economizing. The further price controls extend across the economy, the closer it gets https://libertyclassroom.com/member-login/to eliminating economic calculation altogether.

More on price controls:

https://wiki.mises.org/wiki/Price_controls

[jmherbener]

Here’s Bob Murphy on Robert Reich:

Bob Murphy on Thomas Piketty:

https://cei.org/blog/thomas-pikettys-false-argument-expanding-government

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2543012

Gene Epstein on Joseph Stiglitz:

https://www.city-journal.org/joseph-stiglitz-venezuela-16181.html

[jmherbener]

Here’s a brief account of claims concerning how inequality can produce inefficiency:

Inefficient Inequality

Here is brief account of the social benefits of inequality:

https://mises.org/library/social-function-economic-inequality

Here is Mises on subsistence wages:

https://mises.org/library/wages-and-subsistence

Here are a few pieces on the living wage:

http://www.econlib.org/library/Columns/y2015/Murphydisemployment.html

https://mises.org/library/living-wage-mistake

https://mises.org/library/failed-moral-argument-living-wage

[jmherbener]

Keynesian economics is, strictly speaking, a macroeconomic theory or model. Such models attempt to explain economics growth and business cycles. Neoclassical economics is, strictly speaking, a set of microeconomic theories or models. Such models attempt to explain the allocation of resources in society to particular needs. Roughly speaking, all policy issues except fiscal and monetary policy fall under microeconomics and can be addressed without any reference to Keynesianism, for example, the impact of agricultural price supports or the consequences of state-run schools. The material in textbooks (including Krugman’s), therefore, is divided into micro and macro sections in order to cover the entire ground of economic theory

These waters are muddied somewhat by the so-called neoclassical synthesis which attempts to ground Keynesian macro in neoclassical micro.

Here is an accessible summary of Keynesianism:

http://www.econlib.org/library/Enc/KeynesianEconomics.html

[jmherbener]

Diminishing marginal utility refers only to equally-serviceable, additional units of a particular good that a person could possess at a moment of time. If a person has two iPhone SE instead of one, the value he places on an iPhone SE must be lower. DMU applies to money, since money is also a good that is divisible into equally-serviceable units. If a person selects the possession of $1,000 as suitable to attain an end, then having another $1,000 in his possession he would value less highly than the 1st $1,000.

There are two problems with the claim you refer to. First, money holdings are not the same phenomenon as income. DMU refers to having additional units of a good in your possession. The MU of money is not the subjective value of the goods you can purchase by spending money. It is the subjective value of holding onto money as part of your stock of goods. Second, DMU refers to an amount of a good chosen by the person as suitable to the attainment of his end. A person may consider two iPhone SE as the unit suitable for his end if he wants his aging mother to have a phone also so that the two of them can communicate with each other. Likewise, the amount of money chosen a person as suitable for attaining his end is the unit of money. It is arbitrary, therefore, to conjecture a doubling of a person’s “income” as appropriate to think out the logic of DMU.

[jmherbener]

Here is a wiki on the Great Recession and the post-recession boom.

https://wiki.mises.org/wiki/Great_Recession

Like the Great Depression, the Great Recession was characterized by a large increase in money demand. Banks, especially, liquidated assets for cash and have been holding money ever since. That is what quantitative easing was designed to do: bailout the banks by having the Fed buy the securities they were holdings. The Fed lowered the Federal Funds interest rate to near zero during the recession (which officially ended in the summer of 2009). So, the Fed’s expansionary monetary policy, which began with QE3 in 2012 (with the economy still in recession, unofficially) could not lower short-term interest rates. Banks are still holding huge excess reserves instead of lending normally. Only in the last few years have banks begun to normalize their credit expansion. And now there are signs of another crisis.

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