What are the ten most popular economic myths?

Miscellaneous General
21

Nope. Any amount of money is optimal.

22

Point 6 should read: profits are bad and should be taxed out of existence.

You can pick other fallacies from the following list:

  1. Right wing governments support the free market hence “free market is fascist”
  2. An entrepreneur should not start a business to earn a living and grow rich if successful but to give people jobs
  3. Regulations have nothing to do with manufacturing jobs migrating to China: it’s all down to greed
  4. The market isn’t self-regulating so it must be guided through taxation and regulation, the more the better
  5. Tariffs are good when protecting “our” jobs but bad when hurting “our” exports
  6. Inflation is not caused by an increase in the money supply but by greedy speculators
  7. Government spending produces wealth
  8. Government intervention cannot fail: at best politicians and bureaucrats are just not bold/energetic enough
  9. Marxism, Socialism and Communism are dead and buried
  10. Government deficits don’t matter since the government cannot go bankrupt
  11. Some economic sectors (tobacco, spirits, porn etc) are inherently immoral and should be punished through heavier taxation
  12. Some businesses are just too big to fail and should be helped out to save jobs
  13. The “rich” should shoulder a bigger share of the burden

Have your pick and enjoy! [;)]

23
24

How about something a little more controversial perhaps - at least amongst some Austrians and related “hard money” types [maybe even some in the “mainstream” ?:

“Increasing the money supply automatically causes inflation [ that is, a reduction in the relative per unit value of the currency unit ]”

Regards, onebornfree.

25

Favorited. Kakugo, I think you nailed it. When talking to supporters of mainstream economics, or to people who vote, we can simply select the fallacy they have accepted and challenge it. Economists and politicians make a living off these fallacies. Voters go to the polls to assure that politicians don’t waiver from these fallacies. It is striking how your list explains the otherwise incomprehensible political / economic system.

26

I think my favorite one, which is already listed here, is that private individuals are greedy, but people who work for the government are not.

27

Sat. 10/03/13 13:16 EST
.post #08

How about: “People exchange things of equal value.”

I know this is the same as what Praetyre said: “The economy is a zero-sum game,” but I doubt that many people know what that means. But almost everyone I talk with believes that “people exchange things of equal value.”

28

[url]Cause of Today's Economic Crises: Too Much Thrift]

29

  1. There would be no economy, if there was no government

  2. It is a zero-sum game

  3. Destruction creates wealth

  4. Public works projects create wealth

  5. Capitalism hurts the working class

  6. Regulations protect consumers

  7. Labor unions have a net benefit for the working class

  8. Minimum wage laws stop people from paying subsistence wages

  9. GDP is an accurate measure of wealth

  10. Without anti-trust laws every business would be a monopoly

30

What about this one?:

Myth: The government protects your liberty and your property.

Reality: The government is by far the biggest violator of your liberty and your property. It has the power to make laws and to enforce laws. This inevitably leads it to wage legalized war against your liberty and your property for their own gain, and for the gain of their economic partners.

31

The thing about the government being a violator of property and liberty is that for some people, this is a voluntary trade off. So I think it’s more accurate to say that the government violates the liberty and property of certain people. Not everyone.

32

There is such a thing as a public good.

33

That’s not a myth.

34

Thank you for catching my error. I’ll repost that under the “top ten economic lies” thread.

35

I don’t even think it makes sense to call it a lie.

36
  1. Capitalism will destroy itself and communism is our destiny.

a little elaboration on this myth:

  1. Free markets concentrate wealth in the bourgeois and make conditions worse for the proletariat.
37

Fifteen years wasted in politics taught me something useful! [;)]

38

Mon. 10/03/15 21:13 EDT
.post #9

I realize some of these have already been stated.

More popular economic myths:

  1. booms and busts are inevitable
  2. booms are “good,” busts are “bad”
  3. the Fed ameliorates booms and busts
  4. some things “have” intrinsic value
  5. people exchange things of equal value
  6. there can be a “shortage of money,” just like there can be a shortage of other commodities
  7. your money is “in the bank”
  8. the government can provide what the market can’t
  9. the government can, on net, create jobs
  10. inflation is a rise in prices
  11. the amount of wealth in society is fixed, so when some people enjoy an increase, others must suffer a decrease
  12. wealth can be “equalized” by robbing some people and giving to others
  13. socialism is about equalizing wealth
Why is Africa Poor?
39

Generalize your number 6: “Economics is a zero-sum game”. This should be number 2 in my opinion. Many people hold this view, although it is cleverly disguised in many forms.

Generalize your number 3: “Deregulation/not enough regulation causes economic crises.”

Generalize your number 1: “The broken window fallacy”. Keep this as number 1, Hazlitt deserves his place in all of this.

Generalize your number 2: “Minimum wage/welfare/social security/medicare/medicaid/what have you helps poor people.”

40

I don’t want to generalize them; at least, not in the listing. The point is to find that belief that people hold. That’s what grabs people’s attention.

In the explanations we will abstract and generalize of course.