SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Mish's Global Economic Trend Analysis
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: mishedlo who wrote (35707)8/23/2005 12:20:38 PM
From: gpowell  Read Replies (2) of 116555
 
Keynes argued that workers suffer from money illusion, thus a greater nominal money supply stimulates demand. Of course, he was correct, but Keynes’s economics in the General Theory is an economics where no real scarcities exist, save for the artificial scarcity created by the determination of people not to sell their services and products below certain arbitrarily fixed prices. These prices were in no way ever explained, but were simply assumed to remain at their historically given level (except at rare intervals when "full employment" is approached and goods begin successively to become scarce and to rise in price). Nevertheless, that quote is taken out of context, as the paragraph following the one quoted by “trotsky” is:

"The analogy between this expedient and the goldmines of the real world is complete. At periods when gold is available at suitable depths experience shows that the real wealth of the world increases rapidly; and when but little of it is so available, our wealth suffers stagnation or decline. Thus gold-mines are of the greatest value and importance to civilisation. just as wars have been the only form of large-scale loan expenditure which statesmen have thought justifiable, so gold-mining is the only pretext for digging holes in the ground which has recommended itself to bankers as sound finance; and each of these activities has played its part in progress-failing something better. To mention a detail, the tendency in slumps for the price of gold to rise in terms of labour and materials aids eventual recovery, because it increases the depth at which gold-digging pays and lowers the minimum grade of ore which is payable."

Keynes always tried to make his detractors look foolish by pointing out their contradictions; the point he is making is that an economist who thinks digging up gold is different from digging up bank notes doesn't know what money is, and probably shouldn't be making any comment.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News