The foundations of economic freedom are personal choice, voluntary exchange, and open markets. As Adam Smith, F. A. Hayek, and Milton Friedman stressed, freedom of exchange and minimally regulated markets provide the fuel for economic progress. Without exchange and entrepreneurial activity that is coordinated through markets rather than by governments, modern living standards would be impossible. Cato scholars explore policy reforms that could increase growth by strengthening property rights and the rule of law, safeguarding the value of money, reducing excessive taxes and regulations, scaling back government interference with trade and immigration, and reducing federal spending on programs that harm economic productivity.
Economics
Pandemics and Policy Series
Abolish Price and Wage Controls
The disruption that COVID-19 has wrought includes unusually pronounced changes to labor markets with huge, ongoing depressions of demand in some sectors. In this environment, elevated minimum wage rates risk creating yet more unemployment, both because the wage rates will be more damaging in sectors where market wages have fallen and because companies have fewer opportunities to adjust their cost base right now. As time moves on, we will need the large supply of currently unemployed workers to transition into new roles. High minimum wage rates at the state and local levels may act as a barrier to this.
The Costs of Biden’s Big Minimum Wage Boost
The minimum wage debate is rekindled as the Biden Administration plans its push for $15 an hour. Chris Edwards and Ryan Bourne discuss the side‐effects and drawbacks.
Don’t Freak Out About Gamestop
The market isn’t broken—it’s working.
Team Biden and the Means to “Full Employment”
What new government programs would be justified in pursuit of a target of “full employment” in the economy? Ryan Bourne discusses what the Biden economic team might be planning.
It Is Rational for the General Public to Avoid Acquiring Economic Knowledge
A 1,665-person YouGov survey undertaken in co‐ordination with the ONS’s think tank found that less than half of the public could correctly define GDP in a multiple‐choice question, while participants in 12 focus groups showed little to no understanding of it.
Take Price Controls Off the Menu
Introducing price controls will disincentivize delivery services from partnering with low‐volume or remote restaurants, from increasing contractor pay, or from improving service.
American Compass Shouldn’t Reject the Economics of Immigration
There is a large body of evidence rebutting the assumption that immigration drives down wages.