Laying the Groundwork for Thinking about Liberty. As we know, there are known knowns . There are things we know we know. We also know there are known unknowns. That is to say, we know there are some things we do not know. But there are also unknown unknowns:
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We also know there are known unknowns. That is to say, we know there are some things we do not know.
But there are also unknown unknowns:
the ones we don't know we don't know.
—Feb. 12, 2002, Department of Defense news briefing
~ or ~
One misguided zealot can wreak more havoc than a roomful of idiots.
Things students believe are true.
33% of UK adults believe that Mount Everest is in Europe.
– National Geographic, 2007
61% of American adults either do not believe in evolution or have no opinion.
– Gallup, February 2009
(a real conversation)
As wages rise, more people enter the labor market.
As wages rise, firms cut back on hiring.
Therefore, price floors create surpluses.
So, a minimum wage causes unemployment.
But we need a minimum wage because companies would pay zero if we let them.
Find a firm willing to hire you at whatever price you can negotiate.
Goal: Get the highest wage you can.
Hire workers at whatever price you can negotiate.
Goal: Maximize profit.
Each firm gets a chart like this. The chart is the firm’s factory.
Each unit the firm produces is automatically sold for $4.
All the workers will be hired 0% unemployment.
Only half of the workers will be hired 50% unemployment.
This demonstration can be done in 20 minutes and students immediately “get” two important lessons:
Demonstration and data remove misconceptions, opening the mind to more knowledge.
Economic misconceptions are usually the result of pride and prejudice.
Dispel misconceptions with data and demonstration.
Inoculate by warning against pride and prejudice.