“Unfortunately, neither laudable intentions nor widespread support can alter one simple fact: although minimum wage laws can set wages, they cannot guarantee jobs.” (Linda Gorman, quoted by Foundation for Economic Education) Linda Gorman does not realize that microeconomic effects do not generalize. This is the Fallacy of Composition. The axiomatically correct macroeconomic Employment Law (⇓ AXEC62d) tells one how ― in the elementary case ― the employment L depends ― under the condition of product market clearing ― on ρE and ρF. The factor cost ratio ρF is composed of wage rate W, the inverse productivity R, and price P. The ratio ρE depends on (public/private) deficit-spending/money-creation, i.e., deficit-spending ρE>1 is Keynes's pseudo-revolutionary idea; ρE=1 means budget-balancing. The Law consists of measurable variables and is testable if generalized. The macroeconomic price mechanism is embodied in ρF. An increasing price P means falling employment L, and an increasing wage rate means increasing employment. A falling price increases employment. A rising price decreases employment. The closer ρF is to 1, the higher is employment. This is contrary to the microeconomic Austrian microbrain logic. For more on the correct employment theory, see Cross-references: Employment https://t.co/RfA1hj72qQ Foundation for Economic Education is an inexhaustible source of proto-scientific garbage.
— AXEC (@EgmontHandtke) October 27, 2026
This blog connects to the AXEC Project which applies a superior method of economic analysis. The following comments have been posted on selected blogs as catalysts for the ongoing Paradigm Shift. The comments are brought together here for information. The full debates are directly accessible via the Blog-References. Scrap the lot and start again―that is what a Paradigm Shift is all about. Time to make economics a science.