What-ifs and Whatnot

Two friends are sitting by a pool on a hot day.  One of the friends, Joe, casually says to Smith (the other): “Smith, it sure is a hot day today.  I hope the sun doesn’t dry up all the water!”

“Don’t be stupid!” says Smith.  “The sun doesn’t cause water to evaporate.  It causes the water level to go higher!”

Joe looks at his friend perplexed.  Smith continues:

“It’s real simple.  The sun hits the water, water gets warmer and starts to evaporate, right?  So the pool master comes out and adds more water to the pool.  On net, the water rises!  Ergo, the sun causes a higher water level!”

Joe, still confused, says “No, that’s not true.  The effect of the sun is to evaporate the water.  The pool master coming in is serendipitous; it’s a ‘what-if’.”

Smith laughs.  “Oh Joe.  Don’t be so dogmatic in your thinking!  Always insisting that the sun causes evaporation!  But I have clearly proven that wrong.  These chemists who constantly insist evaporation occurs because of the sun are just ideologues.”

Joe, rolling his eyes, goes back to his book.

 

And so it is with minimum wage, too.  Minimum wage advocates love to construct all kinds of “what-ifs” to explain why minimum wage has no effect (or even a positive effect) on employment.  But by doing this, they hide the effect of minimum wage behind all sorts of stories and claim, then, they have turned theory on its head.  But constructing what-ifs are easy.  Any storyteller can do it.  But what-ifs and serendipity make poor bases for public policy.

 

4 thoughts on “What-ifs and Whatnot

  1. I think a better analogy would be similar to the arguments I hear that raising the minimum wage increases everyone’s incomes by putting more money in circulation.

    “The sun hits the water and causes it to evaporate. This puts more water vapor in the air, and it comes down as rain, so the sun causes more water to fall into the pool.”

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  2. “But by doing this, they hide the effect of minimum wage behind all sorts of stories and claim, then, they have turned theory on its head.

    That is a very good point!

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  3. You will sometimes hear Democrats make similar claims about deficit reduction that, in effect go like this: when Democrats take over, they spend like drunken sailors. This precipitates a Republican takeover of the House (as in 1996 and 2010), which then enforces greater fiscal discipline. Ergo, Democrats are responsible for deficit reduction tht occurred after 1996 and 2010.

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