Re: The “Low Unemployment Causes Inflation” Fallacy
According to phony (Keynesian) economics, low unemployment means that workers can demand higher salaries, causing inflation. This is false.
Indeed it is false, and Keynes theories on employment and inflation were thoroughly refuted by the happenings of the 1970s in America. That period underwent stagflation, or rising prices and rising unemployment, two things that were not meant to happen simultaneously under the Keynesian theory, even though Keynes himself acknowledged that condition as a potential consequence of central banking and a domestic policy of price controls.
I find this is the most effective point to make when debating with a Keynesian, or anyone who has been indoctrinated in their public education to believe the numerous macro-economic fallacies promoted by the state. Unfortunately, due to the Religious Fervor of Socialism many people do not take to debates based on fact or proof, and thus caveat emptor if you wish to employ this approach.
Of course Neo-Keynesians will talk about cost push inflation, but as per Austrian theory, we know that inflation cannot occur in the absence of increases in the money supply. Cost Push and Demand Pull are used to obfuscate increases in pricing, to attribute them to any factor but changes in the supply of money. I don’t have the book in front of me, but Peter Schiff devotes a little space in “Crash Proof” to dismissing these terms.
If you’ve got any other quick and simple arguments for attacking Keynesian or Statist fallacies, leave them in the comments.
Tags: cost push, demand pull, fallacy, fsk, keynes, stagflation
Posted in Economics |
