Some claim "the rich" will be fine—or even better off—after the COVID panic destroys the economy for most of us. But there's a problem: the wealthy depend heavily on an economy fueled by the production and consumption of all workers and entrepreneurs.
David Gordon reviews Janek Wasserman's "The Marginal Revolutionaries" and finds some concerning errors and misunderstandings.
Buyers and sellers in the free market do indeed act from self-interest, but Adam Smith never argued that this excludes friendly feelings for those they do business with.
Some claim "the rich" will be fine—or even better off—after the COVID panic destroys the economy for most of us. But there's a problem: the wealthy depend heavily on an economy fueled by the production and consumption of all workers and entrepreneurs.
Buyers and sellers in the free market do indeed act from self-interest, but Adam Smith never argued that this excludes friendly feelings for those they do business with.
Far from being a sign of alleged capitalist brutality, the spread of international trade and market freedom is a sign of greater global cooperation and solidarity.
Landlords invest their stored labor—savings—at a risk and with the knowledge that they won't recoup it for some time. In creating or renovating rental properties, they aid those who can't store their labor yet—tenants and laborers.
Government restrictions on production are driving prices up as unemployment drives them down. It's impossible to say now whether price inflation or price deflation will be the predominant factor in the crisis's next phase.
Even though the official unemployment rate is probably not quite as high as it was in 1933, there are reasons to believe that our labor market is currently in even worse shape economically than it was at the lowest depths of the Great Depression.
Capitalists and entrepreneurs serve distinct functions in the real economy. Capitalists save money that then maintains production processes until final goods are produced. Entrepreneurs adjust the capital structure in light of uncertainty to produce the most desired goods. Capitalists are rewarded with interest, entrepreneurs with profit.
