Don Boudreaux at his excellent Cafe Hayek in his Quotation of the Day, finds an excerpt from Armen Alchian from a textbook, University Economics in 1972.

This excerpt points out several economic fallacies, many of which are still common today, and it points out that understanding competency in addressing our personal business and lives does not readily transfer into understanding the dynamics of economics on the greater society.

the excerpt

Although many of us solve our personal problems, we may still be grossly ignorant about how our actions and laws affect the rest of society. Comprehension of these larger effects requires economic theory, even if virtually none is required to for individual decisions. We can be sure, as we shall see later, that economic analysis is ignored when the following incorrect assertions are proposed: the rationale of the capitalistic system requires a “harmony of interests”; customers must take what producers offer them; minimum-wage laws help the unskilled; discrimination can be stopped; pollution of air and water unquestionably should be stopped; automation reduces available jobs; tariffs protect domestic wage earners from foreign labor; our otherwise unlimited productive capacity is curtailed by monopolistic capitalists who arbitrarily set prices high; unions protect workers from greedy employers; inflation hurts the wage earner and benefits the employer; private firms serve private interests while publicly owned agencies serve public interests; used-book markets must reduce the royalties of textbook authors; social conscience and civic sensitivity are or should be the guides to business corporate behavior; unemployment occurs because not enough jobs are available or because some people are shiftless and lazy; or American agriculture produces a surplus of wheat because it is so productive. And that’s only a tiny sample!

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