Prices

The bottom line here is that insurance of this kind — as opposed to catastrophic insurance like car insurance, which pays for accidents and not for oil changes and general repairs — creates moral hazard.

In deciding to hire a worker, the employer does not ask himself what the worker gets as take-home wages.

If laws or business customs force the employer to make other expenditures besides the wages he pays to the employee, the take-home wages are reduced accordingly. Such accessory expenditures do not affect the gross rate of wages.

Institutional unemployment is not the outcome of the decisions of the individual job seekers. It is the effect of interference with the market phenomena intent upon enforcing by coercion and compulsion wage rates higher than those the unhampered market would have determined.

"Refusing to accept wage reductions, workers must accept unemployment."

"Because of rate busting, society as a whole will move toward greater and greater satisfaction and prosperity."

From Part I of A History of Money and Banking in the United States: The Colonial Era to World War II: “The History of Money and Bank

The argument of sticky wages does not justify the existence of a central bank. Market prices, including wages, are flexible enough to smooth out macroeconomic disturbances.

"The only possible solution to the inflation problem is an open opposition to the unions and to the idea that higher money wages are the only means for improving the condition of the masses."

Caplan's claim that the value-scale approach is inadequate for explaining these effects is simply an incorrect interpretation of Professor Rothbard's theoretical framework.