Re: Uncertainty and Liquidity Preference

["Jack O'Donnell" <jackodonnell@xxxxxxxx>]

Ted Winslow wrote:

<<SNIP>>

> Moreover, on Keynes's premises isn't it practically certain that holding
> money for a long time (the only way of using money to avoid the invariant
> fundamental uncertainty of long run future yields on capital assets) will
> be a losing proposition since the only practical way, according to Keynes,
> of preventing the claims of accumulated rentier wealth from becoming, in
> the long run, an unbearable burden on the "active classes" is through
> inflation?

"Only" is a bit generous.

First, money has its own fundamental uncertainty of future value and
provides no avoidance of "the invariant fundamental uncertainty of long
run future yields on capital assets." Second, inflation is not a
preventative, neither practical or impractical, for the burdens of
rentier accumulations.

To correct the uncertainty in the future value of money requires both a
viable standard of value and the political will to maintain the value of
money to that standard.

To correct the burden of rentier accumulations requires that the rents
be collected by the society that makes those rents possible and a
reduction in the return to wealth to that level that sustains the
progress of wealth accumulation at whatever level produces the greatest
rate of growth in capital formation.
--
			-- jbod

		Tax Privilege, Not People
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