August 03, 2015

Slapped by the Unseen Hand

Anyone with a basic knowledge of sound economic principles would have seen this coming: CEO who set his firm's minimum wage to $70K hits hard times

Which raises the question: How did such an economic imbecile become so wealthy in the first place? 

That I don't know. But I do know this: the laws of economics don't care about social justice or political correctness. The so-called dismal science is no respecter of persons. Economist Adam Smith wrote of an invisible hand which governs the market. As a Bible-believing Christian, I believe Smith's metaphor was on point. The laws of economics describe the way things work in God's world. They are what they are because the world is what it is, and the world is what it is because God has decreed it so. God providentially guides the market process with an unseen hand.

There are plenty who see the absurdity of a $70,000 a year minimum wage who fail to draw the obvious conclusion. This is actually a reductio ad absurdum of the entire concept of the minimum wage. (Not convinced? See here and here for explanation.)

I don't doubt the good intentions of those who advocate minimum wage laws, but good intentions often make for bad policy. Minimum wage laws are based on a poor understanding of economics  Minimum wage laws, then, are based on a poor understanding of the way things actually work in God's world. As the aforementioned CEO found out, those who flout the laws of economics are in danger of getting slapped by the unseen hand.

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