someone on pen-l (was it David?) suggested that Say's discredited "law" was irrelevant. To which I answered that the money libertarians make the assumption all the time (without telling us or maybe even knowing it, of course). To wit:
from FORBES, a magazine which should be described as "the capitalist idiot." >>But there is an even more fundamental problem with the logic of Keynesian >>economics, besides the magic fairy dust problem. Demand can never be >>inadequate in a free market economy. Demand is insatiable in fact. [Verify >>that with a talk with your teenage daughter, or son]. If the demand for any >>particular good or service is inadequate for the supply produced, the price >>will just fall for that good or service, until demand equals supply. >>Consumers can never consume more than is produced, no matter what policies >>the government follows to increase “aggregate demand,” and they will never >>consume less, as the market price system will see to that.<< This ideological idiot's teenaged daughter or son knows better: demand doesn't exist in a "free market" if it's not backed by purchasing power. And that teenager thus wants _money_. "Consumers can never consume more than is produced" but aggregate demand hikes can lead to _increases_ in employment and the uses of other resources and thus _increases_ in the amount that's produced. This is true up to potential output, i.e., the level of real GDP where the labor employment ratio is similar to what it was in 2007. Don't FORBES columnists have to study economics? or does that magazine represent the employer of last resort for Phys Ed. majors? -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
