Fifty Economic Fallacies Exposed

Cover......Page 1
Title page......Page 5
Contents......Page 7
The author......Page 11
Foreword......Page 13
Acknowledgements......Page 15
Introduction......Page 19
1 Regulation and markets......Page 21
Ticket touts are harmful and wicked. They should be stamped out by law......Page 23
The conduct of an industry — in particular, how it serves consumers — is improved by government regulation......Page 25
The state should step in to protect the environment......Page 27
Firms should not make profits......Page 29
2 International trade......Page 33
One country should not cut its tariffs unless others do......Page 35
Free trade should be fair......Page 37
Free trade causes unemployment......Page 40
The country should be more competitive......Page 44
3 International finance......Page 47
Foreign exchange speculation should be stopped......Page 49
A current account deficit is a problem......Page 51
EMU will eliminate turbulence in the ERM......Page 54
Interest rates and exchange rates......Page 57
Britain should join the euro at the ‘correct’ exchange rate......Page 60
4 Inflation......Page 63
Raising interest rates causes inflation......Page 65
Credit controls are better than interest rates......Page 67
Credit controls — do they work?......Page 69
Devaluation causes inflation......Page 72
Price rises above inflation are bad......Page 74
Relative price changes can be ignored......Page 77
Government-imposed price rises have worsened inflation......Page 80
Controlling prices controls inflation......Page 83
Inflation, real values and ‘government money’......Page 86
Confusion about inflation......Page 89
5 Fiscal policy: taxation......Page 93
Governments can precisely manage the economy by fiscal policy......Page 95
Employers contribute towards workers\' benefits......Page 97
Taxes should go up to slow inflation......Page 101
The government should place extra taxes on companies that make ‘excess profits’......Page 105
The Chancellor can predict the effect of tax allowances on behaviour......Page 108
6 Fiscal policy: government spending......Page 111
Investment is a good thing, and should be encouraged by every means in the government\'s power......Page 113
Government borrowing should be guided by the ‘golden rule’......Page 116
Welfare benefits should not be cut when the public finances are in surplus......Page 119
The ‘Iron Chancellor’ and government spending......Page 122
The Chancellor should reduce his spending plans......Page 125
7 Monetary policy: theory......Page 129
High interest rates are bad for the economy, and the government should reduce them forthwith......Page 131
International capital mobility has increased, so governments have little control over economic activity......Page 134
Rising bond yields will slow the economy......Page 136
A boost to demand from monetary policy will help growth......Page 139
It is sensible to judge past decisions in the light of current information......Page 143
8 Monetary policy: practice......Page 147
The Bank of England should rescue a failed or failing bank......Page 149
Monetary and exchange-rate policy can be conducted independently of each other......Page 152
Scotland should be represented on the MPC......Page 155
9 Cost, price and value......Page 159
Oil companies have been robbing the public by raising prices when they have inventories bought at previous, lower, prices......Page 161
Cutting out the middleman brings down prices......Page 163
What a good costs to produce determines its worth......Page 165
10 Labour markets......Page 169
They\'re not well paid. They should get a living wage......Page 171
‘EC gives better maternity deal to UK women’......Page 174
Social dumping is a problem......Page 176
With population growth continuing, it will be harder and harder to find jobs for everyone......Page 178
Imposing labour standards helps the poor and protects domestic workers......Page 181
Workers should hold shares in the company they work for......Page 184
About the IEA......Page 188