Labor Economics with Walter Block - Walter Block - Mises Daily

Labor Economics with Walter Block - Walter Block - Mises Daily: 'the entrepreneur, the residual-income claimant, brings three things to the table that workers greatly value. First, he bears risk. If the items produced by the workers cooperatives do not sell, they are plumb out of luck; in contrast, if what the worker produces for the capitalist is rejected by the consumer, the capitalist may not come to the workers and demand back the wages already paid. Second, the much reviled businessman offers time, in the form of capital goods. If 100 workers band together in a syndicalist venture, and the product will not come off the assembly line for a year, they must feed and clothe themselves for this entire duration. As well, they must have among them enough savings to purchase the machinery, the raw materials, and the marketing services necessary for a final sale. In contrast, the entrepreneur provides all this to the workers, who, all too often, do not appreciate his efforts on their (and of course his) behalf. Third, the owner of the business firm provides leadership, in setting up the entire enterprise.'

'Why do we have unemployment? One major source is when wages are pegged at higher rates than productivity. Minimum-wage laws and union legislation are responsible for this situation. Another cause of unemployment is unemployment insurance. The more you pay for something, the more of it you will have. If you subsidize unemployment, its rate will rise. Yet another cause of it is the Fed, Ron Paul's favorite institution. By artificially lowering interest rates to virtually zero levels, this central bank leads entrepreneurs to invest in excessively roundabout methods of production for items that take a long time to produce (houses, cars, mines, etc.).'