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Maybe we’ll get less of this economic nonsense? Here’s the latest from Vox:

The simple danger is that monopolies tend to charge high prices.

I am sure lay readers don’t see the problem with it. But if I actually put a single question on a Intermediate micro final exam that asked, “what is wrong with this comment?” I am almost sure to get 100% of the students getting this 100% correct. Of course, they only get this correct because the roosters do not yet run the henhouse. This is not something to “disagree” about. It is not something that one can have a charitable view about. Does anyone out there know what it means to “disagree” about something? Because the comment above is flat wrong. And when the most very basic economic insights about “the problem of monopoly” are wrong, what are, even thoughtful, readers supposed to guess about what else is right or wrong. Is the author vetting all of the material in all articles to see if it makes sense? If not, why? And what material, then, is vetted, and for what kind of content is it being vetted.

For those wondering, the “problem” of ANY economic outcome is not a high price or a low price, it is that the quantities are wrong. And the problem with “monopoly” is restricted output. The prices reflect that at best, and are merely distributional. By the way, I love how people pick and choose when consumers matter and when they don’t.

UPDATE: goodness, if we need more evidence that Vox (or us) is doomed, here it is. Is this the same Yglesias that we used to read on Slate and elsewhere? 

In a market economy, however, we often show appreciation for people’s work by paying them money

No we don’t. Is this serious? And then he goes on to show just how “appreciated” teachers are in “liberal” states. By the way, “states’ can’t possibly be liberal. They are governmental entities. People can be liberal. But states? And are these real, purchasing power adjusted measures? Oregon is as liberal as New York (to use his lingo), are they less appreciative of teachers there? This article is bordering on committing the total value / marginal value fallacy. Bordering? No, it’s there. By the way, I think a bigger irony is that the more and more folks like Yglesias laud the wonderfulness of teachers, and the more and more we have “teacher appreciation week” the lower teacher wages need to be, since all of this loving on teachers is as much a form of compensation as cash. If you really “cared” for teachers, you should be scrutinizing the heck out of them, and if you want to get money out of the legal profession, a small step to take is “legal profession appreciation day.” Again, this is understandable by every single one of our micro students. 

But I think the biggest question of all is this: how do we show appreciation for teachers in non-market economies? 

3 Responses to “When Students Take Over the Economics Profession”

  1. RIT_Rich says:

    In all seriousness, why do you read Yglesias, Vox, Slate or these other outlets? Unless its for comic relief. But, I would think my blood pressure is a lot more valuable than whatever lack of insight one would get from reading such jokers as Yglesias.

    I don’t mean to imply that not reading “the other side” isn’t a worthy endeavor, but these people are at the same level as Jon Steward.

  2. blink says:

    Okay, the “problem” of monopoly is inefficient underproduction. But we can ameliorate that by price discrimination. Let the monopolist perfectly price discriminate and — poof! — no more quantity distortion. I think it is reasonable to say that a competitive solution with P=MC is *better*. Are you really going to throw up your hands and say we cannot compare the outcomes? Will you allow no normative comparisons at all?

    Second, Yglesias clearly got your dander up, but isn’t that his intent? Yes, his comparisons are very misleading. Even on Yglesias’ own terms, he neglects many basic facts that skew the comparison: number of hours worked, educational costs, job licensing, variance of earnings, ignoring “drop outs”, different ages/stages of life, etc., etc. Why focus on his use of “appreciation”? It is just a word!

    • Gabriel Wittenberg says:

      Beyond all of the issue Yglesias has with controlling employment factors, I can tell you exactly why teachers in New York are so well compensated; look no further then Bill De Blasio’s pandering to the teachers union and attacking charter schools on their behalf. If you promise a large group of workers job security, lifetime healthcare, and a defined benefit pension plan, you can bet your ass they’ll vote for you. The only way to offer those things is to get rid of those pesky charter schools and allow the city to operate it’s schools in a completely consequence free environment (that is, free from the consequences if competition). But hey, at least he won the election. Who cares that he’s against children from poor districts getting a “better education”. Poppycock! We must make everyone equally poor by making them equally poorly educated.

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