Re: More money or better distribution?

["John B. O'Donnell" <jackodonnell@xxxxxxxx>]

John M. Legge wrote:
>
> Confirming Paul's point in practice:
>
> In Indonesia the ghouls of the IMF have demanded that dM be large and
> negative.  The effect is that dQ is also large and negative.

It would be easy to dismiss this with -- post hoc ergo propter hoc:
"after this, therefore because of it" -- but there is more here than
that obvious fallacy. I am not familiar with any detail of the
Indonesian economy nor the power of the ghouls to demand anything from
anyone not seeking an exchange, legitimate or otherwise.

However, I do not see any reference in your assertion of the effect to
the consequences of the obvious associated distribution change that
probably accompanies a change in money quantity. The question then
becomes -- Did the actions of the ghouls cause: (1) a net increase in
the propensity to consume; (2) a net increase in the propensity to save;
or, (3) no change in either propensity?

If case (1) cam be proven to have been caused by the action and the
result was a degradation of the economy, then it would appear that
Keynes propensity arguments are false; if case (2) then one would expect
a degradation in the economy and continue to accept Keynes propensity
arguments; if case (3) and the change caused something to happen then,
again, Keynes must be wrong.

I chose case (2) -- your choice?

In any case, I would look to distribution changes and not changes in
money supply to effectively cause improvement to an economy and keep the
supply of money as a control to maintain the value of money. Only it
would be much better to institute a monetary policy to maintain the
value of the currency before it gets so far out of hand that the
currency is just so much paper.

<<SNIP>>
> This list, and this question, is examining matters that are literally of
> life and death importance.

A bit pretentious, but I like the thought.

			-- jbod

		Tax Privilege, Not People
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