Hayek Argument That Employees Make Up The Majority Of People Today

Question 1

Hayek argues that employees make up the majority of people today. As such, employees have a great deal of power to vote for their interests. He argues that they should not vote in their own interests however. Explain Hayek’s argument. Do you agree with his argument? Explain.

With the expansion of market, the number of employees largely grows. The majority of people are employees today. Because they also have the right to vote, they have a great amount of political power. However, they can only see their own perspective and vote for their own interests. For example, they look for higher wages, and have few thoughts on innovation and creating job opportunities. Their votes can only satisfy the needs of people like them. On the other hand, the opportunity to sell labor power for a wage is considered as employees’ freedom and independence. Hence, increasing freedom and independence for employees needs a lot of employers providing job opportunities. As employees are self-interested, they tend to make job of

“The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates” (Joseph A. Schumpeter, page 82). The process of creative destruction is key truth about capitalism. It is the process of incessantly creating a new economics structure and destroying the old one. Destruction is the starting point of creation no matter at the macroeconomic or microeconomic level. At the macroeconomic level, creative destruction apply to structural adjustment and economic fluctuations. At the microeconomic level, the process of creative destruction appears in many decisions to create and destroy structure or arrangements of