ECONOMICS, as we have now seen again and again, is a science of recognizing secondary consequences. It is also a science of seeing general consequences. It is the science of tracing the effects of some proposed or existing policy not only on some special interest in the short run, but on the general interest in the long run.
Even a relatively mild inflation distorts the structure of production. It leads to the overexpansion of some industries at the expense of others. This involves a misapplication and waste of capital. When the inflation collapses, or is brought to a halt, the misdirected capital investment – whether in the form of machines, factories or office buildings – cannot yield an adequate return and loses the greater part of its value.
What inflation really does is to change the relationships of prices and costs.
Rent control, however, encourages wasteful use of space.
The most frequent fallacy by far today, the fallacy that emerges again and again in nearly every conversation that touches on economic affairs, the error of a thousand political speeches, the central sophism of the “new” economics, is to concentrate on the short-run effects of policies on special groups and to ignore or belittle the long-run effects on the community as a whole.
Saving” in short, in the modern world, is only another form of spending.
Taxation for public housing destroys as many jobs in other lines as it creates in housing.
The thing so great that “private capital could not have built it” has in fact been built by private capital – the capital that was expropriated in taxes.
Inflation itself is a form of taxation. It is perhaps the worst possible form, which usually bears hardest on those least able to pay.
So the government launches on a gigantic housing program – at the taxpayers’ expense.
Eternal vigilance is the price of an open mind.
No one could think that the destruction of war was an economic advantage who began by thinking first of all of the people whose property was destroyed. Those.
What is prudence in the conduct of every private family,” said Adam Smith’s strong common sense in reply to the sophists of his time, “can scarce be folly in that of a great kingdom.
If, therefore, the X industry is driven out of existence by a minimum wage law, then the workers previously employed in that industry will be forced to turn to alternative courses that seemed less attractive to them in the first place.
So government policy should be directed, not to imposing more burdensome requirements on employers, but to following policies that encourage profits, that encourage employers to expand, to invest in newer and better machines to increase the productivity of workers –.
There is no more certain way to deter employment than to harass and penalize employers. There is no more certain way to keep wages low than to destroy every incentive to investment in new and more efficient machines and equipment.
It is typical of government price-fixing schemes that they escape one undesired consequence only by plunging into another and usually worse one.
One of the worst results of the retention of the Keynesian myths is that it not only promotes greater and greater inflation, but that it systematically diverts attention from the real causes of our unemployment, such as excessive union wage-rates, minimum wage laws, excessive and prolonged unemployment insurance, and overgenerous relief payments.
Just as there is no technical improvement that would not hurt someone, so there is no change in public taste or morals, even for the better, that would not hurt someone.
The typical political ploy was to load up benefits in the present and push costs into the future. Yet that future always arrived;.