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Quotation of the Day…

… is from page 70 of the 1978 edition of the late Ludwig Lachmann‘s 1956 book Capital and Its Structure; here, Lachmann is discussing Keynes’s cramped and inadequate understanding of the role of capital markets, including the role of stock exchanges:

Keynes not merely failed to realize the real nature of the specific problem he was facing, viz. intertemporal price inconsistency expressing itself in divergent expectations.  He was probably unaware of the importance, perhaps even of the existence, of the class of problems of which this is one: problems of the transmission of knowledge.  There is very little evidence that he grasped the economic function of the market as an institution through which people exchange knowledge with each other.