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Go to your whiteboard and draw supply-and-demand curves for a couple derpy markets of widgets and other goods. Then, draw one for labor. Note how the curves are
by DonbunEf7 9y ago
Go to your whiteboard and draw supply-and-demand curves for a couple derpy markets of widgets and other goods. Then, draw one for labor. Note how the curves are reversed; if you draw it "backwards", then it goes back to behaving like a normal market. Now, try adding employment policies, like minimum wages, to the market; what happens to the curves?
- CWuestefeld 9y agoTo be fair, the labor market does have some gotchas. In particular, there's the phenomenon of "price stickiness", which is a big deal in labor (i.e., wage stickiness), but doesn't have nearly so much effect with other goods.
- dalbasal 9y agoDon't bring Keynes into this! We're way to far in the weeds already.
- ttoinou 9y ago"Pure theory" or Hayek / neoliberal theories don't seem to be just about perfect S/D curves and reasoning with S/D curves doesn't prove anything, it's just a visualization tool. I didn't understand why the curves are reversed ?