[...]... the community be better off? In order to compensate families B–F for the higher rent, the rent increase could simply be rebated back to them by the other families This would leave these families and their landlords just as well-off as they were before the abolition of rent control, but the rest of the community—families A and G and the landlord of family G—would all be better off The landlord would... that comes after goods are produced and sold But it is the distribution of income that determines what and how much will be produced in the first place, and an unequal distribution of income often leads to a decrease in the size of the economic pie One example is the production and distribution of AIDS drugs Poor people in developing countries cannot afford these drugs not because they are objectively... bread was controlled everywhere in Europe, but today the price of bread is not controlled anywhere 10 Why? The answer is that in medieval times there wasn’t enough food to satisfy the demands of both rich and poor people, but today there is Of course, the controls did not make more bread available, but they did make more bread available to the poor (They also forced everybody to stand in line When the. .. redistributed? The constitution of 1793 did not say, and the political process that would have determined it was thwarted before it started A group of citizens, The Conspiracy of Equals,” demanded that the constitution be implemented, but the group was disbanded when its leader, François Noël Babeuf, was sent to the guillotine The question was addressed theoretically, however, by a contemporary of Babeuf, the. .. it would exceed the cumulative losses, regardless of whether the losers would be compensated for their losses Otherwise the policy should not be implemented: There is no need for the economist to prove—as indeed he never could prove— that as a result of the adoption of a certain measure nobody in the community is going to suffer In order to establish his case [that the measure should be adopted], it... dollar What would happen if all of a sudden the rich and the poor traded places, and the rich became poor and the poor became rich? In this case the curves in figure 1.3 would stay the same, but their labels would change: the lower curve would become the utility function of the rich and the upper curve would become the utility function of the poor In this case, transferring money from the rich to the. .. price of a good is so low that the poor can afford it, but the quantity supplied is less than the quantity demanded, a line is formed.) Thus price controls are imposed on a free market when poor consumers believe that the free market allocates to them less than their fair share of a good, and when they are able to demand that the situation be rectified (In the Middle Ages the poor did not have a venue for. .. can’t raise the rent, I won’t make repairs.” And they don’t Williams: Short of aerial bombardment the best way to destroy a city is rent control.11 Landlords “won’t make repairs”? Wasn’t Williams just told of posh rent-stabilized apartments of the rich and famous, and shouldn’t Stossel have concluded that what determined the condition of the buildings was not rent control but the wealth of the tenants?... Cambridge and Oxford was limited to students who belonged to the Church of England When University College London opened in 1826, it was open to all Bentham was considered the spiritual father of University College and his embalmed body is to this day displayed as a public sculpture there (The head is now wax because pranksters stole the real head several times.) But Utilitarianism as a yardstick for. .. efficiency calls for abolishing a redistributive policy only when the poor would be compensated for their losses, Kaldor and Hicks call for the abolition of redistributive policies regardless of what happens to the poor Economists call the calculations of whether a policy passes the Kaldor-Hicks tests cost-benefit analysis For example, in the analysis of whether rent control should be abolished, the “benefits” . NOT? “IS IT GOOD FOR THE ECONOMY?” Part II - THEORIES OF WAGES INTRODUCTION: CLASSICAL AND NEO-CLASSICAL THEORIES OF WAGES Chapter 9. - THE CLASSICAL THEORY OF WAGES ADAM SMITH DAVID RICARDO (1772–1823) RICARDO’S. (1772–1823) RICARDO’S THEORY OF LAND RENT VMP IN INDUSTRY THE VMP OF INDIVIDUAL WORKERS THE GIANT TURNIP Chapter 10. - THE NEO-CLASSICAL THEORY OF WAGES: JOHN BATES CLARK CLARK’S THEORY OF WAGES Chapter 11. -. but because they are poorer than people in developed countries. The drug companies choose to price drugs for AIDS beyond the reach of the people of the Third World because it is more profitable