Markets don’t just get value a little bit wrong; left to their own devices they make fundamental errors and fail in catastrophic ways. The market cannot operate without the state and not purely in the sense of a minimal state guaranteeing property rights etc but in the sense of the state taking significant action to prevent the market destroying itself.

Tim and others at the Adam Smith Institute are now very seriously on the defensive because empirical evidence has shown their fundamental beliefs to be wrong. They will develop increasingly elaborate explanations of the financial crisis to defend their world view (just as revolutionary marxists did after the failure of revolution in Western Europe) but their star is now dimming.

on employers I mean.

“If the original sentence was recast as “market prices are determined by markets” then it would a be statement of the trivially obvious, wouldn’t it?”

I think maybe you’re being a bit disingenuous here, Tim. It’s that word ‘worth’. If you really do only use it to mean monetary value, then as you say all you are really saying is along the lines of ‘a price is what something costs’. But as you say with that reading it is a statement of the obvious, but as such it can’t actually bear any weight in terms forming your argument.

But in the context of the para in which the sentence appears, and given your openly-stated viewpoint, the sentence comes across as implying that the market price is a fair one. You go on to say that you oppose interventions that seek to put a floor under prices, for example.

My limited understanding is that the experience of the minimum wage has actually been that there was some give in terms of wages for unskilled workers, since it took some time from its introduction before the NMW actually had a significant impact – contrary to the predictions of many opponents. It’s notable in this regard that you have picked stats from 2003, rather than any earlier.

PS. If you want to speak to someone who knows the detail of the impact of the minimum wage on jobs, I know the TUC has a very knowledgeable policy officer who you could speak to

Two things: the second next sentence is “It’s also true that we often don’t like the values that markets come up with so we intervene to change them.”

Which is indeed what we often do. If the original sentence was recast as “market prices are determined by markets” then it would a be statement of the trivially obvious, wouldn’t it? So I don’t as above, understand the hissy fits.

The moral poitn is of course not that market prices are determined by markets. Rather, that if we societally wish to intervene to change them then we as the entire society have to be willing to pay for them. Thus we don’t load the costs onto one subset of society, we all pay for it through the tax system.

And in financial markets the situation is surely way more complicated, not least because the impact of price on demand can be completely reversed (investors buy shares that are increasing in value), the fact that price is based on future expectations etc.