ECON103: Principles of Austrian Economics I

Before watching this lecture, answer this question: is the minimum wage coercive? If you think it is coercive, who is it being coerced: the eimployee or the employer? Now imagine that the state had the technical means to produce "smart money" that could made it impossible to pay an employee less than the minimum wage, should the state intervene? While many economists, even from the Austrian school, will disagree with this political viewpoint, it is important for you to understand how Mises approached the solution to the problem of political authority. As you watch the video, consider the negative consequences to intervention supposedly directed at improving the lives of citizens.

KEY POINTS

• There are three different types of intervention as identified by Rothbard: autistic, binary, and triangular.