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Enough to Buy Back the Product
jim.com ^ | 1979 | Henry Hazlitt

Posted on 10/21/2009 6:15:13 PM PDT by arthurus

Amateur writers on economics are always asking for “just” prices and “just” wages. These nebulous conceptions of economic justice come down to us from medieval times. The classical economists worked out instead, a different concept—the concept of functional prices and functional wages. Functional prices are those that encourage the largest volume of production and the largest volume of sales. Functional wages are those that tend to bring about the highest volume of employment and the largest real payrolls.

The concept of functional wages has been taken over, in a perverted form, by the Marxists and their unconscious disciples, the purchasing-power school. Both of these groups leave to cruder minds the question whether existing wages are “fair.” The real question, they insist, is whether or not they will work. And the only wages that will work, they tell us, the only wages that will prevent an imminent economic crash, are wages that will enable labor “to buy back the product it creates.” The Marxist and purchasing-power schools attribute every depression of the past to a preceding failure to pay such wages. And at no matter what moment they speak, they are sure that wages are still not high enough to buy back the product.

(Excerpt) Read more at jim.com ...


TOPICS: Business/Economy
KEYWORDS: economicfallacies; pices; wages
These days we call it "living wage."
1 posted on 10/21/2009 6:15:15 PM PDT by arthurus
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To: arthurus
These days we call it "living wage."

Well, unfortunately, as in other creative phrases, there is a huge gulf between what "we" mean by the words and what "they" mean by the identical words. For example:

"Transparency."
"Most ethical admnistration."
"Change we can believe in."
"Meaningful reforms."

You do see a pattern here?

2 posted on 10/21/2009 6:34:37 PM PDT by Publius6961 (…he's not America, he's an employee who hasn't risen to minimal expectations.)
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To: arthurus

“These days we call it “living wage.”

...or “social justice”


3 posted on 10/21/2009 6:55:41 PM PDT by circlecity
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