What are the ten most popular economic myths?

This is the list now (unordered):

  • War is good for the economy
  • Minimum wage helps poor people
  • Deregulation/lack of regulation caused the financial collapse
  • An economy cannot grow if the money supply doesn’t grow
  • A free market leads to monopolies
  • Profits are a form of exploitation (there is a winner and a loser)
  • The government needs to protect industries (subsidies, bailouts, tariffs)
  • The government needs to create jobs to curb unemployment
  • The government needs to provide services that the market cannot, or would underproduce, or would provide inefficiently (lighthouses, research | fire brigade, post office, roads)
  • The government needs to regulate the market for quality and safety (doctors, food, products, etc)

The ones that didn’t make it for the top 10:

  • Saving is bad (‘hoarding’)
  • The curse of machinery

Everyone cool with that? I’m mainly interested what normal people now believe, and also those that are incorporated in current government policies. Does the govvy really do much against ‘the curse of machinery’?

The next step would be to create short and hard-hitting explanations. Also we’d need to find an ordering.

International trade is zero sum. The myth that is almost universally believed.

This is not popular. Only economists and their readers are aware of it.

I’m not so sure; it’s the universal answer you hear for why gold supposedly doesn’t work. It’s an issue even a lot of starting libertarians have trouble with.

Do you mean the belief: we are rich because other people are poor?

As I said on the previous page (which you may not have seen): I want the titles of the myths to capture the beliefs of what people think of, i.e. something that catches their attention as true.

I mean the specific belief that international outsourcing in general makes the domestic population poorer in general; buying local helps the local economy.

What are pundits refering to when they claim this? Does anyone know of a decent article on the topic?

They might mean the partial repeal of Glass Steagal, which allowed banks to use depositor money to dabble in anything at all.

Lew Rockwell [of all people!] wrote a piece in the 90’s saying this would bring on disaster.

I think I’ve heard Peter Schiff agree with him in a recent [last few months] video.

Thanks Dave.

I’ll look through Peter Schiff’s videos when I get home tonight. Could you point me toward the Lew Rockwell article? I’m having trouble finding it.

here it is:

I realized I need to put one in regarding intellectual property.

It’s more difficult to phrase than the others.

“ideas must be protected from copying otherwise people won’t generate them”

?

Public sector provides things for cheap and with compassion. (schools anyone?) while the private forces are all about greed and raising prices. Don’t believe me then just ask Bill Maher.

And what about the big one; He has a Nobel memorial, hence he knows what he is talking about.

Then the whole idiocy about how free market is unsustainable for our environment . (Actually its the only sustainable way of economic behaviour that protects the environment.)

What a great thread! This has so much material for a project I’m working on called “The Con Primer” – it’s a device for a story I’m writing. “The Con Primer” is a small book, like an early grades reading primer, for young folks to study and learn so they can avoid getting conned as they navigate life as adults.

Thanks everybody for a GREAT COLLECTION !!!

For the “Minimum Wage helps poor people” myth, this is helpful, as it explains why economists believe it is true:

People have all these justifications for government.

Breaking up monopolies, wealth redistribution, national security etc.

A violent organization established for the purpose of breaking monopoly is not a government.
A violent organization established for the purpose of stealing from the rich on behalf of the poor is not a government.
A violent organization established for the purpose of defending a large group of people is not a government.

Once a crises has been fixed, this violent organization will have lost its purpose and therefore ought to disband. Governments do not disband. You can concede all the statist arguments about how coercion is needed to poke and tweak certain aspects of humanity, but there is never any reason for ANY establishment to exist indefinitely.

I mean, if we found a cheap alternative to oil/gas, Exxon would disband, no?

A call for violence does not justify the state. Its a non sequitur.

Law and national defense cannot be produced without a State.

Clayton -

I didn’t see this one anywhere in this thread:

Big business supports laissez-faire.

QFT! “The rich are pro-free trade” “Big business fears regulation.” Just look at the Net “neutrality” debate to see that debunked!

Clayton -