Quotation of the Day…

by Don Boudreaux on December 11, 2011

in Myths and Fallacies, Seen and Unseen, State of Macro, The Economy, The Future

… is from page 112 of Joseph Schumpeter‘s much-praised – but still-not-praised-enough – 1942 book, Capitalism, Socialism, and Democracy:

There is surely no such gulf between Marx and Keynes as there was between Marx and Marshall or Wicksell.  Both the Marxist doctrine and its non-Marxist counterpart are well expressed by the self-explanatory phrase that we shall use: the theory of vanishing investment opportunity.

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{ 59 comments }

Daniel Kuehn December 11, 2011 at 7:59 am

Out of curiosity – are you writing something on Keynes? You seem to be collecting a huge pile of anti-Keynes quotes in these “Quotation of the Day”‘s, and you’ve obviously got your nose in the books looking for this stuff – you’re not just stumbling across Keynes references randomly.

For any that are interested, Keynes acknowledged Marx as keeping on top of Say’s Law but otherwise he downplayed any connection with Marx in the general theory. The reason is fairly obvious from what he didn’t downplay – Malthus and the underconsumptionists which were much more similar (though not identical) to his own underinvestment view. Marx had an overinvestment view of recessions, which you can read about in his Theories of Surplus Value (should all be online), so while Keynes rightly acknowledged Marx’s rejection of Say, his understanding of what was going on was fairly polar opposite of Marx’s.

Marx thought that what was going on was an inexorable drive of profit rates to zero due to overinvestment inherent in the capitalist system.

Keynes thought that what was going on was underinvestment in a world with plenty of investment opportunities and wanted to see more investment so that profit rates would be driven near zero.

Perhaps Don can explain how there is “no such gulf” between the two. I’m a little puzzled myself.

John Papola December 11, 2011 at 8:35 am

Someone should cue in all of the actual Keynesian practitioners today that his theory is an “underinvestment” theory, because there seems to be an overwhelming focus on encouraging and subsidizing CONSUMPTION from our Keynesian overlords. Whether its cash for clunkers, temporary employee-side payroll tax cuts or the cacophony of keynesians who have talked about the higher “multiplier” of giving money to low income people even as you take it from the “rich”. Are “the rich” the ones who tend to investment? Hmmm. I’ve seen and heard countless proclamations that UI benefits are GREAT stimulus because the unemployed generally HAVE to spend it all. No investment there.

Krugman has proclaimed that taxing the rich is better because they just save most of their money. Alan Krueger just made a similar claim regarding the use of increased taxes on “the rich” to “pay for” the payroll tax cut, claiming that workers have a higher “marginal propensity to consume” (a ridiculous term in my view). Again, no investment there.

If Keynes the man and his theory is focused on stimulating investment, which is spending on productivity improvements, keynesians in practice are nothing more crude Malthusian cranks pushing people to use up as many resources (aka consumption) as possible. Production and investment are the OPPOSITE of consumption, just a reminder. And Mill was right to proclaim that the demand for commodities is NOT the demand for labor. Increased consumption demand need not lead to a single increased dollar of investment or a single new hire.

Keynes focus on nominal spending flows and nominal demand is best handled by a hayekian / friedmanite view on monetary economics. If people demand more money, produce more money. Deficit financing political boondoggles and consumption is unlikely to do anything more than waste resources. It won’t necessarily equilibrate the supply and demand for money, the heart of the macro problem.

Krugman and the rest handwave away monetary issues due to the so-called “liquidity trap” but that idea is little more than an institution failing of the central bank to meet money demand, NOT an economic law. Have the fed target NGDP. I bet that had Keynes lived, he would have become a friedmanite monetarist, probably of the Sumnerian variety.

Greg G December 11, 2011 at 8:54 am

John

“Krugman has proclaimed that taxing the rich is better because they just save most of their money. Alan Krueger just made a similar claim regarding the use of increased taxes on “the rich” to “pay for” the payroll tax cut, claiming that workers have a higher “marginal propensity to consume” (a ridiculous term in my view). Again, no investment there.”

I understand why you reject here the idea that fiscal stimulus will lead to more production in an unproblematic way. But why do you reject the idea that workers have a higher marginal propensity to consume? Won’t someone living paycheck to paycheck be more likely to consume additional income than someone who is already saving regularly?

And aren’t production and consumption things we want to be in some kind of balance rather than being opposites that necessarily undermine each other?

John Papola December 11, 2011 at 9:16 am

I don’t reject that low income people who live paycheck to paycheck save less than those with higher incomes who can cover essential expenses and leisure with room to spare. Rather, I find it fake-science technocracy to slap a numerical estimate on this highly personalized and diverse scenario and then I reject the use of it in Keynesian terms as a way of justifying the allocation of so-called “fiscal policy”. That’s a minor point, though. It’s a style point. When I hear Alan Kreuger invoke it, I think it smacks of trying to dazzle voters with lingo rather than simply saying “poorer people don’t save, and our policy doesn’t want them to”. Less appealing, isn’t it?

As for the consumption and production, I have a Say’s law view of it. Consumption is constituted by production. They happen in series. I must produce something of value to another so that I can use it to trade and consume. They are not autonomous. Production comes first. It must. Yes, you can consume by drawing on savings, but those savings came about by production.

And no, consumption doesn’t drive production. Production is fundamentally entrepreneurial. There was no demand for iPods when Apple embarked on producing it.

This is especially important for sustainable job growth during a recovery. New firms are the ones who do most of the hiring most of the time, but especially after a recession. So the whole Keynesian story of existing firms seeing demand rise and then hiring workers is simplistic to the point of uselessness. It’s the static world of circular flow. Time, savings and entrepreneurial calculation are the heart of economic growth and they’re essentially missing or denigrated by Keynesianism.

Greg G December 11, 2011 at 9:32 am

Thanks for that explanation John. I have got a much better idea where you are coming from now. I’d be more inclined to say that expected consumption drives production but that stuff does all famously sort out in the long run.

Daniel Kuehn December 11, 2011 at 9:48 am

re: “And no, consumption doesn’t drive production. Production is fundamentally entrepreneurial. There was no demand for iPods when Apple embarked on producing it.”

Entrepreneurship is the anticipation of future yields. Future yields come from consumption and demand. Entrepreneurship is the anticipation of future demand.

re: “It’s the static world of circular flow.”

First – is it just me or is this an oxymoron?

More importantly – there is nothing static about Keynesianism. What are you talking about???

re: “Time, savings and entrepreneurial calculation are the heart of economic growth and they’re essentially missing or denigrated by Keynesianism.”

You’re joking, right? You realize decision making over time, channeling savings into investment vs. other uses, and entrepreneurial calculation are the heart of Keynesianism, right?

Methinks1776 December 11, 2011 at 10:15 am

Entrepreneurship is the anticipation of future yields. Future yields come from consumption and demand. Entrepreneurship is the anticipation of future demand.

You’re restating what John said and ignoring that he’s talking about current consumption. Current consumption says nothing about what demand will be for a new product entering the market.

Daniel Kuehn December 11, 2011 at 10:21 am

Methinks –
Nobody is disagreeing with John that entrepreneurship doesn’t concern itself with current consumption. That is not the controversial thing that John said.

If you want to find someone to address that point critically, I suggest you look for someone that thinks entrepreneurship is primarily concerned with satisfying current demand. I was more interested in critically assessing other points he made.

Methinks1776 December 11, 2011 at 10:27 am

Fine, but if you agree then why not address John’s first paragraph instead of nitpicking? Nobody denies that demand for a product must exist is the entrepreneur is to be successful. And, it appears, nobody disagrees that current consumption says little about what and how much we will demand in the future.

Why then do you think there is all the hand-wringing of prominent Keynesians over changes in current consumption?

Daniel Kuehn December 11, 2011 at 10:37 am

I don’t see a whole lot of Keynesian handwringing over this, Methinks. I think there is a lot of concern about it from politicians. That’s a problem… or more accurately, it’s a lack of focus on what’s important.

Maintenance of consumption is in a lot ways a humanitarian issue at a time like this more than a macroeconomic issue. I don’t think consumption is “the main point”, and I think very few Keynesians think that either. But you’re not going to find me loudly denigrating consumption-oriented policies because (1.) they have tremendous humanitarian value, and (2.) they increase the deficit – which is beneficial.

John touched on the marginal propensity to consume and these policies too – and that’s perhaps a third point to raise. When we talk about increasing the MPC we’re talking about the responsiveness of income to expenditures – not the level of consumption. John seems confused on this. You want a higher MPC because it makes increased investment spending and government spending more effective. John is treating the multiplier as a question of the level of consumption. That’s not really right. We can think of a situation with exactly the same level of consumption as before but a higher MPC. That’s good because of what it does to the fiscal multiplier and investment multiplier, completely independent of the level of consumption.

John is jumbling together a lot of different things here – and tossing in economically unsophisticated statements by politicians into the mix too.

Daniel Kuehn December 11, 2011 at 10:40 am

Another way to say it is this – consumption is obviously – to anyone that has any reasonable understanding of Keynes at all – not the main problem. Nevertheless, just because it isn’t the problem, increasing consumption isn’t going to make things worse, and it’s also beneficial for millions of families that are unemployed or underemployed right now. For both those reasons of course you’re not going to have Keynesians marching in the streets protesting consumptionist policies. But there’s a big difference between “not marching in the streets” and “thinking the politicians get it”.

Methinks1776 December 11, 2011 at 11:08 am

I don’t see a whole lot of Keynesian handwringing over this, Methinks<.

You don’t see. I see.

You don’t see the things John Papola mentioned. You don’t see Bush’s stimulus checks. You don’t see the incentive effects of paying people to be unproductive. You don’t see the incentive effects of the wealth transfers for would-be entrepreneurs who aren’t engaged in the magical thinking that governments can run deficits to fund all this for free ad infinitum. You don’t see the effects of rising regulation. There just seems to be a lot you don’t see.

I hope one day you’ll see. Maybe like McCloskey, in time you’ll drift.

Sam Grove December 11, 2011 at 1:17 pm

You realize decision making over time, channeling savings into investment vs. other uses, and entrepreneurial calculation are the heart of Keynesianism, right?

The heart of Keynesianism or the heart of economic growth?

Ubiquitous December 12, 2011 at 12:29 am

@ Greg G:
expected consumption drives production

Expected consumption as viewed by the entrepreneur, not the consumer. The consumer of electronics hadn’t a clue about a tablet-computer, so obviously could not expect to demand it going forward. It’s the entrepreneur who believes the consumer will want the good in the future.

And do you need to be reminded that the entrepreneur is often wrong?

Greg G December 12, 2011 at 12:44 am

Ubiquitous

Yes I was aware that it is the producer who decides how much to produce. I thought that was obvious to everyone.

Gee I never thought that an entrepreneur could be wrong though. Does that really happen sometimes?

GiT December 11, 2011 at 9:03 am

Funny, I would have thought production and investment were the complements to consumption.

John Papola December 11, 2011 at 9:16 am

See my reply above.

GiT December 11, 2011 at 5:10 pm

I don’t see how it does anything to defend that production and consumption are ‘opposites’ in any meaningful sense of the word opposite.

Further, I think the whole question of whether production is serially prior to consumption is pretty ridiculous.

Production and consumption are mutually constitutive. There is no serial priority.

(one could certainly try to argue for one or the other, but it seems to me this would get us into some ridiculous German Idealist style rumination – which is fine with me but not really to the point.)

John Papola December 11, 2011 at 11:04 pm

GiT,

Consumption consumes/eliminates/destroys. Investment draws on savings which are that which is NOT consumed. Production creates. Creation is the opposite of destruction.

Production does not assume the sale of said product. Hence we have risk, need savings and need interest and profit.

Production comes first. There is no German Idealist style (whatever that means) necessary.

Imagine you and I land on a dessert island with nothing but the cloths on our backs. I go pick bananas. You go pick fish. That’s production. It came first. Prior to the production, there was no economic demand because neither of us had the means to trade.

A complex economy makes this root source of purchasing power and demand more difficult to recognize and the ability for money to be demanded on its own adds in complexity. But it doesn’t change anything. I have to be productive before I can consume. My production comes first before I can demand.

Ubiquitous December 12, 2011 at 12:39 am

I don’t see how it does anything to defend that production and consumption are ‘opposites’ in any meaningful sense of the word opposite.

Wow. You believe cultivating wheat and eating a slice of bread are the same sort of economic activity. Amazing.

Homework assignment: review Roger Garrison’s little graph of a Production Possibility Frontier from his PowerPoint presentation contrasting Keynes and Hayek on capital theory and the business cycle. You can crib from Danny Kuehn if you wish.

Ubiquitous December 12, 2011 at 1:06 am

Prior to the production, there was no economic demand because neither of us had the means to trade.

In a sense, the only “thing” one had to trade for a hoped-for future good via the production process was one’s own labor. The pure need by itself — hunger or thirst — won’t produce a thing.

I have to be productive before I can consume. My production comes first before I can demand.

Don’t you tire of pointing out the obvious? You have the patience of a saint, professor.

Ubiquitous December 12, 2011 at 1:09 am

Further, I think the whole question of whether production is serially prior to consumption is pretty ridiculous.

Genius!

“Further, I think the whole question of whether ’cause’ is serially prior to ‘effect’ is pretty ridiculous.”

Very good.

vikingvista December 12, 2011 at 3:26 am

Well said, John.

What GiT, DK, and the whole cabal of keynesiacs don’t understand, is that for wealth to be consumed or demanded or traded, or for many people even contemplated, it must first be produced.

Put it that way, and they will all deny it. But a long history of keynesiacs misinterpreting Say demonstrates it. Aggregate demand isn’t stimulated, per se (since nothing so general can be addressed, or even given any economically useful meaning), and government stimulus creates no wealth (and contrary to DK, it does do harm).

Rather, the demand for gidgets is stimulated by the *production* of widgets.

And whether that production turns out to be a mere voluntary but undesired transfer of wealth gratis investors and entrepreneur, or genuine de novo wealth creation, is critically dependent upon the skill, judgement, self-interest, and luck of the entrepreneur and the investors who agree with and enable him.

But to the keynesiac, that skill, judgement, and self-interest are irrelevent (or nothing but animal spirits). Place incompetent corrupt politicians forcefully putting OTHER people’s interests at risk, into the roles of entrepreneur and investors, and we are to believe the same results can be achieved–or as DK puts it, it at least “isn’t going to make things worse.”

GiT December 12, 2011 at 5:07 am

John – I’m not sure how a scenario which starts with people wanting to do things and then producing those things to fulfill their desires starts with production. It seems like it starts with desire to me. Desire starts with the consumption of energy.

That things exist certainly precedes people wanting things to exist.

But wanting things to exist certainly precedes people producing things into existence. (assuming production is something intentional)

Ubiquitious –

‘Not opposite’ does not equal ‘the same.’ Complement, look it up. I believe cultivating wheat complements eating bread, and eating bread complements cultivating wheat. What’s amazing is that you seem to disagree with that.

More generally, I believe that sometimes people cultivate wheat because people eat bread and sometimes people eat bread because bread has been cultivated.

Viking – I have no idea what you’re raving about. Thinking that people produce things because they want the things they produce does not lead to any economic or political policy in particular.

Keynesian policy does not at all depend upon whether supply by definition precedes demand or vice versa. It depends on whether governmental executives can use money more wisely than individuals in aggregate. That has nothing to do with this inane chicken/egg question.

Greg G December 12, 2011 at 7:49 am

I understand why production is necessarily prior to consumption in the sense of the parable often cited about two people beginning to trade on a desert island.

But once you evolve into a modern economy the whole point takes a the character of the controversy over which came first, the chicken or the egg. By this point production and consumption are both dependent on each other with lots of feedback running between the two.

vikingvista December 12, 2011 at 10:00 pm

“It seems like it starts with desire to me.”

Desire is ubiquitous and insatiable. The question was about stimulating demand. Demand refers not only to what people desire, but what they are prepared to trade for. Ergo, they must have something to trade. That something–wealth–is considerably more limited than desire. So what makes new demand possible, in the sense that everyone uses it as referring to realizable trade, is new wealth. It is new wealth that stimulates demand. And new wealth is the result–not the cause–of new production.

And as Say recognized, it isn’t the demand for what is being produced that is necessarily increased, but the demand for OTHER things. The very act of production puts wealth in the hands of people, e.g. laborers, who then present their desire to trade that wealth as increased demand. Although imprudent production will only increase demand of those involved in production, at the expense of the investors.

“Thinking that people produce things because they want the things they produce does not lead to any economic or political policy in particular.”

Who thinks that?

“Keynesian policy does not at all depend upon whether supply by definition precedes demand or vice versa. It depends on whether governmental executives can use money more wisely than individuals in aggregate. That has nothing to do with this inane chicken/egg question.”

It has everything to do with it. To be a keynesian is to believe in economic growth (stimulating demand) without actual wealth creation (production). It is the belief that greater economic frontiers can be achieve merely by pushing money around. It is the belief that the incentives that are required to achieve the production of real wealth (those of private investors and entrepreneurs) aren’t really required at all, and can be left to bureaucrats and politicians utterly lacking in those incentives.

John was absolutely correct in that it gets to the heart of keynesiac fallacies. But it seems, in reading your responses to him, that you still don’t understand what he’s getting at.

Daniel Kuehn December 11, 2011 at 9:42 am

- I have a hard time taking posts that start with talk of “overlords” seriously enough to finish them.

- The investment multiplier is a function of the MPC. Why are you acting like these are unrelated?

- This is simply wrong:“Production and investment are the OPPOSITE of consumption, just a reminder.”

- On this: “If people demand more money, produce more money.”, do you even read what Keynesians or what Keynes said about this? They agree. It’s a stretch to call it “Hayekian” but I’ll bite. But it’s clearly the Keynes/Friedman/Hayek approach. Can I take this to mean that John Papola supports expansionary monetary policy?

- re: “Krugman and the rest handwave away monetary issues due to the so-called “liquidity trap” but that idea is little more than an institution failing of the central bank to meet money demand, NOT an economic law.” This is a doozy. You may have to explain this to me. Nobody has “handwaved away” monetary policy, they’ve just noted certain limits to it. But nobody – looking at those limits – has said we should stop an expansionary monetary policy. I don’t know what you mean by “institution failing”. There is a quite obvious reason to take the liquidity trap seriously. If the interest rate is near the zero lower bound or some non-zero bound that incorporates a risk premium, people are indifferent between an asset that bears no interest and an asset that bears interest but whose interest rate is zero. If push the interest rate below zero people are going to prefer the non-interest-bearing asset. You continue to supply cash, yes. You don’t stop at that zero lower bound. But you recognize that the impact of monetary expansion on investment is going to be limited at that point.

- re: “I bet that had Keynes lived, he would have become a friedmanite monetarist, probably of the Sumnerian variety”. Well you don’t need to speculate. He already said a lot that was very similar to Friedman and Sumner, even during his life. I bet that if he lived we wouldn’t have had this massive schism between Keynesianism and monetarism – a schism which was largely unnecessary, as we can see today with the Keynesians and market monetarists largely getting behind the same rallying call of NGDP targeting.

John Papola December 11, 2011 at 11:12 pm

Daniel,

“I bet that had Keynes lived, he would have become a friedmanite monetarist, probably of the Sumnerian variety”

You do realize that by writing this, I recognize that maintaining nominal income via monetary policy adjustments to money demand was something that Keynes supported. I also wrote this:

“Stimulus both… the monetary and fiscal..”

I don’t reject everything Keynes has ever said. I reject government fiscal expansion as “stimulus”. It’s clear from the examples I’ve given above what kind of policy ideas I consider to be nonsense.

Keynes, Friedman and Hayek ALL favored a flavor of maintenance of nominal spending as a macroeconomic ideal. But that is NOT what comes out of the mouth of most “Keynesians” most of the time. Not the policy makers. Not the policies. And Scott Sumner spent two years railing against Delong, Krugman and the rest of the Keynesian establishment for claiming that monetary policy had “run out of bullets” (due to the alleged “liquidity trap”).

I reject the liquidity trap and reject fiscal policy as being a substitute for monetary policy. I have my concerns with monetary policy conducted by central banks at large due to the relative price impacts of monetary injection effects. But that’s small potatoes next to the utter politically allocated waste that is so-called “fiscal policy”.

Dances with Wolves December 11, 2011 at 10:03 am

John Papola is trying to become the chief propagandist for an extreme fascist view of the economy in my opinion. It is disturbing to me. He can’t say the rich with put “the rich” in quotes. What I want to know is who is funding him and his contorted rap propaganda videos? I want to know if “the billionaire” Koch brothers are one of his backers. Papola puts himself on the line with his anti-poor and anti-middle class, pro-rich and pro-vested interests understanding of economics. His is obviously self-taught, doctrinaire, and doesn’t understand the scientific method. He is gullible and borderline loony and will be discredited and fall like a house of cards eventually. I suggest that he branch out into mainstream advertising and music videos. That is his where his talent lies and where the money is to be made. Fronting for “the billionaire” Koch brothers or as a wise and thoughtful economist is a losing game for him, and will only subject him to continued ridicule, and marginalization as an advocate for extremist discredited economic views. His parents can’t possible be proud of him either.

Daniel Kuehn December 11, 2011 at 10:13 am

Fascist is not right at all, but the fact that he thinks these things and is taken as a sort of authority on the “Keynes/Hayek debate” is indeed extremely disturbing.

Dances with Wolves December 11, 2011 at 10:28 am

If you don’t like “fascist” then you’ll have to accept anti-democratic. I heard Nick Hanauer on NPR on my ride home. He is “a near billionaire with an 8 figure income.” He made a huge fortune from investing in Amazon. He say that he pays around 11% of income in taxes because of tax advantages available to rich investors like himself. He advocates higher taxes on the wealthy because of the ongoing destruction of the middle class, which he says isn’t good for the economy or for his bottom line.

Hanauer wrote about about democracy:
http://www.amazon.com/Gardens-Democracy-American-Citizenship-Government/dp/1570618232/ref=sr_1_1?ie=UTF8&qid=1323617170&sr=8-1

Dances with Wolves December 11, 2011 at 10:30 am

His personal website is here:
http://www.nick-hanauer.com/

John Papola December 11, 2011 at 11:19 pm

Daniel,

I don’t know who’s taking me as a sort of authority on Keynes/Hayek debates… but that’s very flattering immaterial of its accuracy. If only anyone on earth was taking any of us on the Hayek side seriously in terms of ACTUAL POLICY, you may have something to worry about. But fear not, the spending just keeps flowing.

I stand by my words but remain open at all times to improving my understanding. I will say this: I believe that I’m more honest in my views than the far more influential Brad Delong and Paul Krugman, both of whom spew utter nonsense about Hayek and ad hominem bile on a regular basis. Delong called Russ the “lyingest economist alive”. That kids are paying a small fortune to be taught by such a man… THAT is disturbing.

JoshINHB December 11, 2011 at 10:58 am

John Papola is trying to become the chief propagandist for an extreme fascist view of the economy in my opinion.

Only because you are an ignorant idiot.

Papola is an effective advocate for free market ideas, which are the opposite of fascism.

Dances with Wolves December 11, 2011 at 11:20 am

Josh,
Stop the killing of innocent animals in the wild. Outlaw hunting and trapping. That my message to you today. Please spread it wide and far. Free markets shouldn’t allow animal pelts to be sold. Animals have lives to and deserve to be left to pursue them unharmed and unhindered from hunters and trappers who pursue their heinous activities for fun and profit. It must be stopped. I am anti-democratic myself when it come to the senseless, unjust murder of innocents and wholesale, wanton environmental destruction.

See there. I got through my comment without calling you an ignoramus, an idiot or a troll. It was possible with concerted effort on my part. Try to control your nasty, rude impulsivity to demean in the future. Try to gain a wider understanding of world that you live in. Be a better person.

El Diablo December 11, 2011 at 11:58 am

Foolish, Fat, Old White Man with Fake Indian Name for Fictitious White Man,

LOL! I’ll be grilling some delicious steaks this afternoon for dinner with friends. You should try some red meat. It will make you feel better and take you right out of that perpetually bitchy and whiny state you are in. Come on, try a steak. After all, the Indians of whom you are pretending to be one of loved grilled meat.

Also, you should turn off the fascist broadcasting of NPR. It is simplistic propaganda.

Dan J December 11, 2011 at 12:03 pm

I shoot and kill animals for fun. Leaving their carcasses for the earth to recapture.

Dances with Wolves December 11, 2011 at 12:05 pm

Try to control your nasty, rude impulsivity to demean in the future. Try to gain a wider understanding of the world that you live in. Be a better person. I know that it’s hard.

Dances with Wolves December 11, 2011 at 12:09 pm

Dan J,

You should be in jail doing hard labor. You should be made part of the prison-industrial complex.

http://en.wikipedia.org/wiki/Prison-industrial_complex

Greg Webb December 11, 2011 at 12:37 pm

Reconcile this: “Try to control your nasty, rude impulsivity to demean in the future. Try to gain a wider understanding of the world that you live in. Be a better person. I know that it’s hard.”

With this: “Dan J, You should be in jail doing hard labor. You should be made part of the prison-industrial complex.”

LOL! DwW is off her schizophrenia medication. Time to lock up the looney left.

Greg G December 12, 2011 at 8:32 am

GW

Yes, you have caught Dances with Wolves in a contradiction. This would be a victory for you if his comment had some purpose other than making a joke out of this thread.

You should consider the possibility that his purpose was simply to yank your chain and that everyone else could also see the contradiction.

Dances with Wolves December 11, 2011 at 11:36 am

So-called free markets were present in Hitler’s Germany, Mussolini’s Italy, Saddam Hussein’s Iraq, etc. Free markets are present in “Communist” China, “Communist” Vietnam, etc. Fascism and so-called free markets can co-exist just fine. So you don’t have any idea what you are talking about.

Emil December 11, 2011 at 11:53 am

I think that was probably the most stupid and ignorant comment I’ve ever read…

El Diablo December 11, 2011 at 12:00 pm

Stick around, Emil. The Foolish, Fat, Old White Man with Fake Indian Name for a Fictitious White Man will out do his previous stupid and ignorant statements in short order.

JoshINHB December 11, 2011 at 12:31 pm

@Dances with Wolves

So-called free markets were present in Hitler’s Germany, Mussolini’s Italy, Saddam Hussein’s Iraq, etc. Free markets are present in “Communist” China, “Communist” Vietnam, etc. Fascism and so-called free markets can co-exist just fine.

That phrase (free markets) does not mean what you think it does.

Sam Grove December 11, 2011 at 1:42 pm

You do not seem to understand the meaning of the term fascism.

If anything, libertarians and free markets are the opposite of fascism.
Fascism is but a form of collectivism differing structurally from communism and socialism, but to latter two necessarily incorporate certain elements of fascism in that they require obedience to authority and vest absolute power in the state (which communism supposes will whither away).

John Papola December 11, 2011 at 11:39 pm

Shhhhhh… you’ll wake him.

John Papola December 11, 2011 at 11:15 pm

Mr. Wolves
I’m a “fascist” am I?

Here’s the only answer such a post deserves:
http://www.youtube.com/watch?v=G2y8Sx4B2Sk

Ubiquitous December 12, 2011 at 12:43 am

@Dances with Wolves:
John Papola is trying to become the chief propagandist for an extreme fascist view of the economy in my opinion.

(Yawn) Fascism is just another form of socialism, and Papola is certainly no socialist.

Here’s my own opinion:

Go jump in a lake.

GAAPrulesIFRSdrools December 12, 2011 at 11:07 am

His is obviously self-taught, doctrinaire, and doesn’t understand the scientific method.

Wow. That’s some projection, there fictitious caucasion.

Dances with Wolves December 11, 2011 at 10:31 am
Troy Camplin December 11, 2011 at 12:13 pm

Keynes did call for the complete nationalization of capital, which became the central platform for the market socialists, the Marxists who emerged after the idea of central planning was defeated, so yes, Keynes was closer to Marx than to Marshall or Wicksell. This fact alone points to Keynes’ closeted socialism.

Daniel Kuehn December 11, 2011 at 3:50 pm

No he didn’t Troy.

Troy Camplin December 12, 2011 at 11:18 am

Yes, he did. I read it with my own eyes. Keynes argued for the socialization of investment, which he argued would lead to the elimination of capital scarcity. The latter, of course, is utter nonsense — whether investment capital is private or socialized.

Troy Camplin December 12, 2011 at 11:22 am

Further evidence: http://personal.denison.edu/~kaboubf/Pub/2008-IESS-Vol-7-Socialization-of-Investment.pdf

In which the author points out that Keynes says this in the General Theory.

GAAPrulesIFRSdrools December 12, 2011 at 11:13 am

I wish somebody would point out the obvious. Keynes was neither perfectly right, nor perfectly wrong, but at some point after he had obtained credibility as an adisor to governments, he had an incentive, like any court astrologer, to conjure up ritual incantations that provided moral cover for governments to do what they do naturally, taxing and spending.

Troy Camplin December 11, 2011 at 12:21 pm

And of course national socialism is free markets. An oxymoron stated by a moron.

Sam Grove December 11, 2011 at 1:46 pm

Investment is foregone/postponed consumption.
Does not promoting current consumption conflict with investment?

Ubiquitous December 12, 2011 at 12:03 am

Does not promoting current consumption conflict with investment?

Of course it does. But Kuehn & Co. ignore the time element that distinguishes current consumption vs investment and they simply pigeon-hole both concepts together as “Aggregate Demand”. Thus, there’s AD for consumer goods, and there’s AD for investment goods. It’s all one big mish-mash for them.

You might as well not distinguish between present and future and simply call both of them together “Aggregate Time.” True, it IS aggregate time, but it’s also a useless concept . . . as is Aggregate Demand.

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