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> It's not a natural condition. The natural condition of a free market is an equilibrium between supply and demand. That's the natural condition of a theoretic

• pdonis 11y ago
  > real markets are not theoretical They very often aren't, that's true. And in many cases, that's because real markets are not free markets; they are skewed by government intervention. The market for labor in the US, and indeed in most countries, certainly fits that description. > As Keynes said, the market can stay irrational longer than you can stay solvent. Yes, and he did his level best to make that prophecy come true by getting governments to intervene to keep markets irrational. > poor people have more children than rich people How is this relevant?
  • hoopd 11y ago
    It's almost ridiculous to bring up government intervention in labor markets, and I'm not just saying that for effect. A million things skew the labor market away from the theoretical: people are irrational, information is wildly asymmetric, wages are sticky, there aren't an "arbitrarily large number of firms", the factors of labor (people) aren't liquid or mobile, etc. To pick 'price floor' from the long list of things that distort the labor market while ignoring the rest is strange enough that I chalk it up to politics any time I hear it.