Re: S=I, an old debate.

[Chas Anderson <chasna@xxxxxxxxxxx>]

At 07:25 PM 8/16/98 -0400, you wrote:
>William B. Ryan wrote:
>
>> Money is introduced both to finance investment and consumption as per
>> the increase in Bank Card "Credit". All money introduced in this way is
>> debt and bears an interest charge. The theory of Savings and Investment
>> was wrong when Keynes first introduced it and it still wrong and
>> therefore not worthy of discussion. The chicken and egg argument is just
>> as fallacious as has been pointed out the flow of money in and out of
>> the system is not static but is a continuous flow. In this sense money
>> is a "rate" and this is a concept that has eluded economists for
>> decades.
>>
>> I would suggest that the operative factor is debt not credit. There is
>> no such thing as debt in nature only real credit. The debt is a creation
>> of man in the form of money allegedly representing the real credit.
>> Unfortunately there is no correct accounting procedure in place to
>> reflect the truth of this.
>
>It may be interesting to survey those attending to these discussions as
>to what Money is.  Despite the many offerings of definitions, there
>doesn't seem to be a universally understood or accepted notion of the
>nature of money.
>
>I personally see it as a "function" of society.  An affirmation of a
>society's alpha entity (government, bank, monopoly, religous body,
>trader, army).  But these are only initial thoughts on a subject that
>has been tustled with by some spectacular thinkers.
>
>Needs more discussion.
>
>Bob Williams

You're absolutely right about this. But, you must understand that any
money definition, to be useful, must be constructed towards some
end. In doing this, one really commits themselves to a definite
theoretical position, that is, as Schumpeter says either a monetary
theory of credit or a credit theory of money. I view it as a super-structure
with definitive money forming the base upon which money substitutes
are predicated, that is, a monetary theory of credit.

You will notice that very few on this list will really engage in what
Davidson has accurately pointed out, i.e., you must begin with a
taxonomy. Maybe this should be required as part of our new strident
policy.

Chas

>