Economics for Occupiers Pt. 5: Wage Controls.

In part 3 we discussed labor as a commodity to be auctioned on the market like any other commodity and how the individual can enhance the value of his or her labor by acquiring skill sets for which the market is paying a premium. In part 4 we discussed labor unions, and how they changed the perception of labor from a resource to a commodity and then proceeded to interfere with how that commodity is contracted in the market.

An axiom of free-market economics is that any attempt to dictate how commodities are priced or traded by a governing agency will have adverse and often unanticipated effects on the market in question, to the ultimate detriment of both parties in a trade contract. The market does not like to be tampered with and will ultimately punish the beneficiaries of any tampering.

Attempts at artificial price controls never accomplish the task they’re designed for and always generate unintended and often unforeseen consequences. This is true for labor as well as any other commodity.

Read more about this in chapter 6 of Economic for Occupiers, now available on Amazon.com.