This turned out pretty interesting.
I think David Stockman first used the term “trickle down”
We had a discussion on an Australian libertarian blog about the relationship between Say’s Law and Austrian economics.
My feeling on the matter is that the phrase “Money is a veil over barter” gives the same meaning in a way that is probably easier to understand. Deep down all economic activity is exchange of goods for goods, but money helps to facilitate that and (like any veil) may obscure what’s underneath.
I would avoid the expression “Supply creates its own demand” because that does not emphasise the reciprocal nature of a transaction… the individual creating goods is doing so for the purpose of exchanging and obtaining other goods. Supply in and of itself is necessary but not sufficient,
because it still requires that someone wants your goods and has something you want in return.
Paul Cwik restated Say’s Law to “We produce in order to consume” and I find no easier way of conveying it in one sentence.
I like to think of Say’s Law as “Each person’s supply IS their demand. ”. Keynes used the garbage term “aggregate demand” to muck up that concept. He also it to muck up concepts of private property and private property legitimately acquired. “Aggregate demand” includes your supply of goods, services and money that you legitimately acquired and control plus your supply of goods, service and money that were stolen from others and which you acquired illegitimately from the government.
On related topic, Keynesianism is fundamentally based upon the concept that the market fails and the government needs to constantly supply illegitimate aggregate demand “stimulus” to prevent that failure. Since Keynesians can never locate that historical market failure, there is no need for their illegitimate cure which is transparently immoral has an immoral impact upon society.
Much of America was acquired by war and confiscation of the land by Europeans from people who lived there beforehand. A great deal of the capital stock in the South down to at least 1861 was developed by slavery.
How is this legitimate under your ethics?
I don’t think it is. Regardless, it doesn’t change the fact that the market does not fail, it does not need Keynesian or “market monetarism” stimulus and emissions of new funny money amount to unethical theft of purchasing power which distorts the price, investment and capital structure in an unsustainable configuration.
lol.. large parts of the capital stock of the US south wasn’t built up by slave labour? Tell me more, Bob.
Keynesianism would conclude that an increase in capital due to violations of property rights is a good thing, to the extent it “increased aggregate demand.”
Doesn’t answer my question.
Your response doesn’t address my point.
Doesn’t he mean that he doesn’t think its legitimate ?
Was Southern slavery for tobacco, rice, indigo and cotton production just a myth invented by evil liberals and wicked Keynesians?
Why, it’s conspiracy to oppress poor old Bob!:
Slavery is based on the very same violation of individual property rights as is the whole Keynesian dogma.
Translation: you admit real world American capitalism was based on violations of the ethical principles you claim you support, but mysteriously slave owners were 100% entitled to their property derived from their slave labour.
Translation: You admit that slavery is inconsistent with capitalism, and you admit that what you call “real world capitalism” is not capitalism but violations of capitalism, in which case it could be called “real world democracy”, or ” real world anything else.”
All of which are not attacks against capitalism at all, but rather admissions that capitalist ethics of absolute private property rights are violated, and you admit that this is with your expressed sanction and support.
Not that it needs to be said, but this round goes to M_F. Sorry LK.
Markets benefit from trustworthy private property laws, which in turn require both some agreement between individuals AND some sort of enforcement.
War is what you get when the agreement breaks down and as a consequence property rights are also destroyed.
As for slavery, it’s a very old institution, going back at least to the ancient empires, and quite likely before that. It was tanks to a mix of Christian values and a belief in free market forces and individual rights that led to the end of slavery. I don’t believe it’s possible to go back to the Roman Empire and accurately compensate the victims… nor do I believe it is the responsibility of the current generation to do that.
You are not actually against imperialist conquest. You support it. You cherish it. This is the “powerful institution” you have praised since day one as benevolent and necessary to the whole Keynesian program of forcing “aggregate demand” in a non-individual liberty manner.
It is rather amusing watching you try and fail to goad Roddis into a morality play about imperialist conquest, since in order for a Keynesian “stimulus” to even take place, it is necessary that there exists that very imperialist conquest derived “powerful institution” that can print money ad infinitum to force aggregate demand up or down.
Keynesianism is STATIST, and States are formed on the basis of conquest and war against private property created by non-violent homesteading and free trade.
What you are doing LK is engaging in reaction formation and projection. By writing down you alleged disagreement with war and conquest, by pretending Roddis is the guilty one for replying on it, you hope to experience catharsis by distancing yourself from it.
Your morality is IMMORAL not only on the basis of individual reason, but by your own virtue signalling ethics.
Every time you call upon a government to “stimulate”, every time you blame a problem on a government insufficiently ” stimulating”, you are sanctioning and advocating for the very theft and conquest you pretend to pin on Roddis.
Roddis doesn’t support war and conquest. YOU DO.
If world history contained zero war and conquest, then there would be no governments and no meaning to Keynesian activity. Keynesianism would not exist without war and conquest, and that is precisely why states have adopted Keynesianism as the economics school of choice.
Says the guy who supports Rothbard’s argument for police *torture* of suspects.
LK: How is this legitimate under your ethics?
Me: I don’t think it is.
LK is trying desperately to convince you, or maybe more himself, that the very same attacks against peace and productivity that he depends on, is also what you depend on, so that he is as equally immoral and corrupt as you are.
I read books like this and post the pictures from those books in order to celebrate the joys of European dominance, right?
I love the way “Lord Keynes” hides behind his anonymity so that he can defame his opponents to his heart’s content.
Tel, you wrote:
“I would avoid the expression “Supply creates its own demand” because that does not emphasise the reciprocal nature of a transaction… ”
Ah but if you continue to view all transactions, including transactions for money, as really transactions for goods and services, then the other side of that transaction, the guy with the money, he too can only demand goods to the extent he has a supply to trade for to get that money (I’m excluding theft and coercive redistributions and focusing on markets here).
I would agree that “create” is the wrong word. I would use the term “constitute”. Supply really does constitute demand. For without supply, there would be nothing to demand. In a free market, demand for goods is constituted by the demander’s supply of goods. Without offering any supply, there can be no transactional demanding of supply.
And without demand their would be no point to supply. Watch while Major_Moondance’s head implodes.
False. Without demand the supply would simply be consistent with self-sufficiency.
In other words, productivity can exist without any demand at all, but demand cannot exist without productivity.
Watch NOW as LK’s head explodes.
Interesting question as to how much of the economy exists OUTSIDE the world of transactions, and whether this should be treated separately.
A person enjoying a day on the beach is consuming hours (presumably counts as demand), but no one actually produced that (and there’s no transaction generated).
(I’m excluding theft and coercive redistributions and focusing on markets here)
Thus also excluding all fiat currency regimes… and that’s pretty much the world economy right now (for better or for worse).
Without offering any supply, there can be no transactional demanding of supply.
It’s a necessary but not sufficient condition.
Venezuela is the example of a country with plenty of demand but nothing being supplied. Doesn’t work too well.
LK’s trolling is falling below my levels.
True. Even his language is falling apart. He seems in need of a “their-there-they’re” lesson.
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