Raising the Minimum Wage Is the “Free Market” Thing to Do
January 14, 2014
by Joshua Holland
America’s unrivaled inequality will be center stage in our political discourse this year, as lawmakers debate raising the minimum wage, extending unemployment benefits for the long-term jobless and the Affordable Care Act’s Medicaid expansion leading up to November’s elections.
But in one sense, these debates are more about partisan politics and the interests of the major parties’ constituencies than ideology.
There is, at least in theory, broad agreement across the political spectrum that it is both proper and necessary for the government to intervene in the economy to correct market failures –- assuring that the private sector functions as it is supposed to is the “free market” thing to do. And one would be hard pressed to identify a more destructive market failure than that which keeps one in three Americans –- including tens of millions of full-time workers –- living at or below the poverty line.
According to economic theory, a free market transaction is one between two parties who both have perfect information about the state of the market – what others are paying for the same goods. Operating on a level playing field, free from explicit or implicit coercion, they each pursue their own interests, and in the end agree to a price that’s no higher than what the market will bear.
more
http://billmoyers.com/2014/01/14/raising-the-minimum-wage-is-the-“free-market”-thing-to-do/
