Tag Archives: bastiat

Broken website code? Or just Paul Samuelson?

{d/dA} FL[L, T; A] =FLA[L/T; 1; A] < 0 (A12)
{d/dA} FT[L, T; A] = FTA[L, T; A] > – (L/T) FLA[L, T; A] > 0, from (A11)
FLA[L, T; A] > 0, FTA(L, T; A] < 0 (A13)
FLA[L, T; A] > 0, FTA(L, T; A] > 0 (A14)
FLA[L, T; A] < 0, FTA(L, T; A] < 0: not viable. (A15)
Your browser is probably fine, even though this looks like malfunctioning HTML code or something.
It’s just Paul Samuelson “disproving” Bastiat and Mises.
He continues:
That (A12) is manifestly possible makes it laughable that Ricardo or McCullough should ever have thought differently. Only ignoramuses or zealots like Bastiat or von Mises, could believe that laissez faire always makes each of us better off.
A12 shows that a new production technique can lower wages for laborers in that line of production. Some assumptions made to get there include:
  1. no money (just an output numeraire),
  2. no heterogeneity of labor,
  3. no heterogeneity of land,
  4. no substitution into producing other goods (one-sector model),
  5. no competition for laborers among different lines of production (since there’s only one sector),
  6. no time,
  7. no production time (no competition for laborers among stages of production),
  8. no interest,
  9. no produced factors of production (because that would be another sector, and because then increases in K could increase MPL, and we can’t have that), and
  10. laborers only ever get a subsistence wage (later added to show how such a new production technique like this results in people dying–we all remember the genocide that resulted from the invention of the washing machine).

Source: Paul Samuelson (1989), “Ricardo was Right!” Scandinavian Journal of Economics 91(1), pages 58-59. (emphasis mine)

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The Broken Window Fallacy, Broken Down

Published on Medium.

It’s a longer piece, but with pretty pictures and some humor sprinkled in.

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