Nobel Prize in Economics ǀ Socialists in Stockholm! – Friday

by time news

The neoliberals are generous people. Their mastermind, the Nobel Prize winner Friedrich August von Hayek, did nothing and wanted to allow everyone in society a “minimum of food, shelter and clothing”, as he did in his book Way to bondage stressed. But then it really has to be over, at the same time it shouldn’t be. And anyway: The market cannot be planned, it only functions as a “spontaneous order”, as a “catallax”, as Hayek called it, as a large barter in which you can “make a friend out of an enemy”.

Decades later, FDP leader Christian Lindner, who admittedly was less likely to be a Nobel Prize winner, came around the corner and gave Hayek’s market radicalism an empathic touch. From then on, the politician spoke of “compassionate liberalism”: Well, the markets are still free, but if that doesn’t work so well for some people, Lindner is incredibly sorry. Oh, everything could be so beautiful in the liberal Eldorado, everywhere flourishing trade in goods and ultra-talented entrepreneurs – if it weren’t for the state-loving leftists who drum for statutory minimum wages.

In the sights of Nahles

And while in 1974 the Nobel Prize Committee in Stockholm still awarded honorable liberals like Hayek with the Alfred Nobel Memorial Prize for Economics, today socialist minimum wage agitators like the Canadian David E. Card get this honor. Until recently, you could easily defend yourself against this demand with the argument: minimum wages pulverize hundreds of thousands of jobs! In 2011, Lindner, at that time still general secretary of his party, spoke of “concrete labor market policy” in connection with a statutory lower wage limit. After the crooks in Berlin had introduced a nationwide minimum wage of 8.50 euros in 2015, despite his prophecies of doom, he continued to warn of “risks on the labor market”: all of the mini-jobs for students would be eliminated, craft businesses would be “targeted by Andrea Nahles “(She was still Minister of Social Affairs at the time), everything was terrible.

Today the minimum wage is a staggering 9.60 euros. This did not trigger mass unemployment: despite the pandemic, the rate is just a little over five percent, youth unemployment is at its lowest level since reunification and experts even expect a shortage of 400,000 skilled workers in Germany in the future. And as if it weren’t already hard enough for the liberal soul to cope with that legally fixed wages did not lead to long queues in front of the job centers, they now also fall the Swedish Academy of Sciences in the back. In addition to Card, she also honored the researchers Joshua Angrist and Guido Imbens with the Nobel Prize for Economics on Monday. The media focus, however, was quickly on Card: I.In the 1990s, the now 65-year-old had proven that minimum wages can have a positive effect on the employment rate. Do you feel it? Damn collectivism, it’s getting more and more on us.

Minimum wage nobility

In 1994, the professor at the University of California examined and compared no fewer than 410 fast-food restaurants in the US states of New Jersey and Pennsylvania. In New Jersey, the minimum wage had previously been raised from $ 4.25 to $ 5.05, but not in Pennsylvania. In his study entitled “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania”, which Card created together with Alan B. Krueger, who died in 2019, the two researchers came to the following conclusion: “We found no evidence that the increase in the minimum wage reduced the number of employees.” In New Jersey, even more people were hired, and improved purchasing power made it possible.

Left economists in this country are happy about such research results, the Düsseldorf professor Jens Südekum tweeted that he was “super happy with the selection “ of the Nobel Prize Committee. Fortunately, there are still libertarian opinion-makers like the one at that Neue Züricher Zeitung (NZZ)who immediately took up their pens after the winners had been announced to warn against the “ennobling of minimum wages” and to defend the “economic principle”, which states “that there is less demand for something when it gets more expensive”. Jobs gone, simple calculation – Nobel Prize or not. The colleagues in Zurich went so far as to cast doubt on the research results of Card and Krueger as a whole. In Stockholm, on the other hand, the technical errors of the study were deliberately swept under the carpet. The message was Clearly: No minimum wage debate in Switzerland, where a referendum in 2014 decided against a statutory lower wage limit.

And in this country? Hopefully Olaf Scholz, who is calling for an increase in the minimum wage to 12 euros and who will probably be the next Chancellor of the Federal Republic of Germany, will find the article in the NZZ studied just as meticulously as David Card has studied any fast food restaurant in the eastern United States. Otherwise Sodom and Gomorrah will be here soon.

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