Thinking at the margin is much more crucial than it seems to non-economists when it is first explained to them. Only by thinking at the margin can we correctly understand, for example, why the wages of life-saving first-responders are lower than are the wages of NFL players and of Hollywood starlets and why this fact is a good thing for society. Only by thinking at the margin can we understand the error of those who assert that firms that have lots of money stashed away in reserve, or that are currently earning higher-than-normal profits, will respond to a hike in minimum wages simply by raising the pay of all of their affected workers. And only by thinking at the margin can we come close to fully understanding why there is no objectively correct minimum standard of drug safety, workplace safety, food safety, or of any other kind of safety.
Don Boudreaux, “Quotation of the Day…”, Café Hayek, 2016-08-30.
October 1, 2016
QotD: Thinking at the margin
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