On February 27, 2015, members of ‘Liberty Discussion Group’ got together to discuss ‘markets and politics’ during the 27th Liberty Discussion Session. The participants read “How Markets Tell the Truth and Politics Tells Lies,” by Gary M. Galles and discussed the arguments presented by the writer – for and against.
The participants used the ‘minimum wage’ debate as a window into understanding the costs and benefits of letting markets or politics in-charge of the economy. Disagreements were floated about the writer’s take on politics and markets: how politics rewards dishonesty and how political tools like price controls, taxes and subsidies misinform the economic actors about the true cost of resources. Serious concerns were raised about how, in an unrestrained environment, employers could manipulate their employees and treat them unfair.
Some supporters of markets then argued that the writer is very true in being skeptical about politics by highlighting the fact that for politicians, their main agenda is making and selling popular promises and winning votes. Despite the wrong information the policies that follow thereafter carry, there will still not be an incentive for next generation politicians to scrape such policies off because that would mean that they take a big political risk and jeopardize their possibility of winning elections later.
The discussion then moved towards how the market mechanisms keep the malpractices at check through tools like reputation, prospect of repeat-business and understanding of opportunity costs.
To read Galles’ full article, click here