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Comment by ttoinou | Hacker News Reader

   Anyway, the pure theory approach leads to a general conclusion/assumption that markets are the same. The market for labour, barbie dolls, whatever.

Proof needed. Have you ever read Hayek or Friedman you're talking about ?

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Go to your whiteboard and draw supply-and-demand curves for a couple derpy markets of widgets and other goods. Then, draw one for labor. Note how the curves are reversed; if you draw it "backwards", then it goes back to behaving like a normal market. Now, try adding employment policies, like minimum wages, to the market; what happens to the curves?

To be fair, the labor market does have some gotchas. In particular, there's the phenomenon of "price stickiness", which is a big deal in labor (i.e., wage stickiness), but doesn't have nearly so much effect with other goods.

Don't bring Keynes into this! We're way to far in the weeds already.

"Pure theory" or Hayek / neoliberal theories don't seem to be just about perfect S/D curves and reasoning with S/D curves doesn't prove anything, it's just a visualization tool. I didn't understand why the curves are reversed ?

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