Friday, May 11, 2007

The natural economic tendency

The natural economic tendency is for resources to move to where they are most productive. Market prices act as signals to bring about these shifts. The market price for computer programmers has soared in recent years. Small, specialized software companies are more effective than the Dilbert sector at using programmers. Thus, they can afford to pay programmers higher wages, while the Dilbert sector cannot. The more complaints that one hears from such firms of a shortage of technical workers, the more confident one can be that market forces are working to allocate technical workers to their most productive uses.
- Arnold Kling

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