Here is a podcast on basic economics from Dr. Jennifer Roback Morse.
Dr. Morse is the founder of the Ruth Institute, a global non-profit organization focused on keeping the family together, protecting the rights of children and helping the millions of people who have been harmed by family breakdown.
She has authored or co-authored four books and spoken around the globe on marriage, family and human sexuality. Her work has been translated into Spanish, Chinese, Korean and Polish. Her newest book is The Sexual Revolution and Its Victims.
She earned her Ph.D. at the University of Rochester and taught economics at Yale and George Mason Universities.
A bit more about her economics credentials: Dr. Morse served as a Research Fellow for Stanford University’s Hoover Institution from 1997-2005. She received her Ph.D. in economics from the University of Rochester in 1980 and spent a postdoctoral year at the University of Chicago during 1979-80. She taught economics at Yale University and George Mason University for 15 years.
The MP3 file is here. (49 minutes)
- The study of economics is anti-postmodern – there is objective truth independent of what people think
- The study of economics believes in fixed principles of human nature
- Economics studies the allocation of scarce resources that have alternative uses
- Economics studies how people exchange resources
- How both people who engage in a voluntary trade always believe that they will be better off
- How both people who engage in a voluntary trade both benefit from the exchange
- How incentives motivate people to act
- Understanding supply and demand
- Understanding how “free” government services are rationed
- Understanding opportunity costs
- How prices signal producers to produce more or less, and consumers to buy or not buy
- Market-driven prices versus price controls
- The role of substitution
- The necessity of allowing failure in a free market
The requirements of economic growth:
- private property
- the profit motive
- free trade
- entrepreneurship, creativity and innovation
- the rule of law
If you want to learn more about basic economics, I recommend picking up a book or two by Thomas Sowell – the first book I usually give away is “Intellectuals and Society”, and then next “Basic Economics”. A shorter introduction is “The Politically Incorrect Guide to Capitalism” by Robert Murphy. You can find a good list of books on the website of The Institute for Faith, Work and Economics.
I think it’s important for Christians to understand basic economics, because so much of the impact we have depends not only on our personal finances, but on our ability to promote economics policies that will affect our personal finances. For example, whether you have a job or not depends on economic policy. Whether you can get food and other required resources depends on economic policy. Often, big-government regimes with poor economic policies (e.g. – North Korea) will make it impossible for you to have other liberties, like religious freedom.
Just think about how hard it would be for you to pursue a Christian life plan in a place like Venezuela, where your priorities would not be apologetics, but just finding food and avoiding death and theft at the hands of criminals. Closer to home, we are now seeing Seattle restaurant workers having their hours cut and even losing their jobs – because they decided to raise the minimum wage rate (bad economics).
This latest study from the UW team looks at the effects of both the first and second jumps. The second jump, in January 2016, raised the minimum wage to $10.50 to $13. (The minimum wage has since gone up again, to the current $11 to $15. It goes up again in January to $11.50 to $15.)
The team concluded that the second jump had a far greater impact, boosting pay in low-wage jobs by about 3 percent since 2014 but also resulting in a 9 percent reduction in hours worked in such jobs. That resulted in a 6 percent drop in what employers collectively pay — and what workers earn — for those low-wage jobs.
For an average low-wage worker in Seattle, that translates into a loss of about $125 per month per job.
“If you’re a low-skilled worker with one of those jobs, $125 a month is a sizable amount of money,” said Mark Long, a UW public-policy professor and one of the authors of the report. “It can be the difference between being able to pay your rent and not being able to pay your rent.”
The report also estimated that there are about 5,000 fewer low-wage jobs in the city than there would have been without the law.
As I blogged previously, 93% of economists agree that raising the minimum wage hurts job seekers. It actually hurts young and/or minority job seekers the most, because they are the ones looking for entry-level jobs. That is why in countries that have embraced bad economic policies, the unemployment rates for young people are at or above 50%.
Look at what the far-left UK Guardian says:
In Greece, 59.2% of under-25s are out of work. In Spain, youth unemployment stands at 56.5%; in Italy, it hovers around 40%.
[…]In the words of Enrico Giovannini, Italy’s employment minister, this is a disaster all the more shocking because it is hitting Europe’s best-educated generation: in Spain, nearly 40% of people in their 20s and early 30s have degrees; in Greece it’s 30%; in Italy, more than 20%.
Having an education isn’t what gets you a job. What gets you a job are the economic policies that make it viable for an entrepreneur to risk their capital in the hope of being able to keep more of what they earn – instead of paying it to the government so that bureaucrats can spend it on social programs.
Imagine it was you who lost your job or couldn’t find work due to bad economic policy. Think of how that would affect your ability to even drive to church on Sundays, or purchase a Bible, much less being able to organize an apologetics event at the university and pay for a speaker to fly in and stay in a hotel. Economics is important for Christians to understand, because so much of our influence and effectiveness depends on it.
3 thoughts on “Dr. Jennifer Roback Morse lectures on basic economics”
Completely true. College economics taught me to be a monetarist; reality taught me to be a capitalist. Also consider immigration’s effect on the oversupply of unskilled labor and the resulting depression of wages. Illegal immigration hurts the poor more than others. Why don’t legislators talk about that?
Amusingly, for completeness, people have already observed that there was a hasty UC Berkeley rebuttal study to the UW study that was quoted (ref: http://irle.berkeley.edu/seattles-minimum-wage-experience-2015-16/ ) where they just focus in on the food industry and make fancy handwaving.
The first two people in that blurb (Reich and Allegretto) also released this more extensive study on NY’s $15 minimum wage: http://irle.berkeley.edu/files/2016/The-Effects-of-a-15-Minimum-Wage-in-New-York-State.pdf
There are some findings with which I don’t think I can totally agree. For instance, they assume that there will be strategies for “employee turnover reduction” and “increases in worker productivity”. And also, I don’t think that automation will be cost-less (i.e., I think there is an up-front cost for automation — you have to pay for the technology — and there will be ongoing costs, but overall, this will be cheaper than the higher wages of workers).
The second study also mentions that the prices of goods will have to offset the payroll. That much is true. I don’t think it’s as optimistic as 0.14% per year and that “[t]his price increase is well below annual inflation of nearly 2% over the past five years”.
The short of the UW study and the Berkeley study goes like this:
UW study: increasing minimum wages does affect jobs slightly (9% less hours)
Berkeley study: no it doesn’t … at least with food service.
When I was in France for my honeymoon, I spent some time talking with business owners since well, I’m a friendly guy and sometimes it’s interesting to talk about random things. Business owners like winemakers/vineyard owners, restaurant owners, etc.
To emphasize your point that Christians should know something about economics, a restaurant owner and I were chatting, I found out that unlike the US that has income tax (which the employee “pays” — or rather, is withheld in most accounting systems), in France, there is an employment tax that the employer has to pay.
Thus, taking on more workers is more onerous for French business owners than taking on more workers for American business owners. And we also noticed the proliferation of automation (e.g., automated tellers at McD’s, Starbucks, apps, etc.)
The business owner mentioned that outside of high tech/research/STEM, which seems to have some extra tax breaks, starting a new business in France was very difficult. (Granted in some industries where it is more of an oligopoly — e.g., wireless providers, ISPs — in which it is harder to start a new business, in general, if you have a great idea, great business plan, the right people advising / on your board of directors, have capital and/or angel investors and/or VCs, etc. in America, it is not that difficult to launch your own business.)
Thank you for including Roback Morse on your blog. She has an amazing ministry and is a saint in my book.