The left makes a lot of mistakes. They have many fundamental misunderstandings of how the world works and that is why they are so wrong so often. Here are ten things they need to understand.
1. Profit is good
The great insight every free market economist has, is the coordinating power of prices. Those simple numbers coordinate all the goods of an economy with all the consumers of an economy, to make sure those goods are put to their most efficient uses. Applying this theory to profits, profits are signals of where consumers want something. An industry with high profits signals that consumers want more from that industry incentivizing new companies to join. On the flip side, an industry with low profits signals that consumers do not care for it, meaning that companies go elsewhere.
2. Medicare for all will not save lives or makes people healthier
Back in 2013, a study came out in the New England Journal of Medicine. Because Oregon wanted to expand Medicaid but could not afford to take everyone, they had to use a lottery system and this allowed a rare phenomenon, random-assignment social science research—the gold standard. The results? There were no health benefits. The only thing that changed is that participants felt better.
3. Healthcare is a commodity and calling it a right does not stop that
We all know the left has a thing for feelings. They think just because you call something a right means it will magically appear if you let government sprinkle fairy dust on it. The thing is, healthcare is not a right. In truth, health care is a commodity. I know many on the left are aghast that I would dare characterize healthcare in the same way I would characterize a chair but guess what? Facts do not care about your feelings. Just because people’s lives depend on health care does not change it from being a commodity.
4. Yes the temperature is raising, yes there is a human component but extend is not known
This question comes down mostly to climate sensitivity, something the left likes to ignore. The Intergovernmental Panel on Climate Change estimated in their last report that for every doubling of surface carbon, average temperatures would change by 1.5 Celsius to 4.5 Celsius—a difference of five degrees Fahrenheit. That is a huge range to consider.
5. Even if humans were completely responsible for climate change and it was completely reversible, that does not mean we should
The fact is this requires a debate of values and costs. The climate getting unnaturally warm is not bad by itself. We actually need to explore the costs of climate change (both financial and subjective) and compare them to the costs and benefits of our current path.
6. Raising prices lowers demand. That applies to labor. The question is, how elastic or inelastic demand is
The left complains about deniers of science so much, you think they would care about the law of demand more. It is unbelievably economically illiterate to say raising the minimum wage would not cause employers to demand less labor. But, in defense of the left, the right needs to learn about elasticity. Too often people assume changes in price are accompanied by a percent response by demand. More often than not, demand is inelastic, meaning the change in price is greater than the change in demand.
7. Production drives economic prosperity, not spending
Sorry to break it to you, but increasing aggregate demand does not make people better off. What makes people better off is increased investment, which creates new technology for consumers or allows increased production of goods for consumers. Either way, it is the production which makes us better off by lowering prices.
8. Banning what you do not like does not stop people from doing it or having it
The government cannot actually ban anything. They can only drive the cost up so high for the consumer that people do not want to buy it, or so high for the producer that no one wants to provide the product, or even both. The right can also learn this lesson.
9. People respond to incentives, and when you enact public policy because of your feelings, people will respond
This one is self-explanatory. People act on the margin and respond to their circumstances. When you jack up prices they look for new goods to replace the higher prices. Every day, we change our behavior to conform to the world around us. The same thing applies to things like taxes on investment or minimum wages.
10. As a general rule, rich people are rich because they provide lots of value to society, and poor people are poor because they do not provide a lot of value to society
This one hurts the left, but it’s true. Sure, people who work hard can fall into temporary poverty but they will also rise out of it quickly. As long as you get a high school education, do not get arrested, and do not have a child prematurely you will do fine at life. And, to be clear, a person’s productivity does not equal physical labor. Digging holes and filling them up is a lot of work but it does not produce value.