Re: General Theory Seminar --Savings and Investment

["Harry Veeder" <veed0001@xxxxxxxxxxxxxxxx>]

Title: Re: General Theory Seminar --Savings and Investment

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>From: Paul Davidson <pdavidson@xxxxxxx>
>To: POST-KEYNESIAN THOUGHT <pkt@xxxxxxxxxxxxxxxx>
>Subject: Re: General Theory Seminar --Savings and Investment
>Date: Fri, Feb 18, 2000, 11:45 pm
>
>
>Yhis is not a question of logic it is a question of taxonomy.  You are hung
>up on the accounting definition of savings -- but accounting definitions
>are ex post. As Keynes pointed out (p.64-5) "clearness of mind on this
>matter is best reached, perhaps, by thinking in terms of decisions to
>consume (or refrain from consuming) rather than on decisions to save. A
>decision to consume or not to consume lies within the power of the
>individual."  See page  52, Figure 4.1 of my POST KEYNESIAN MACROECONOMIC
>THEORY book.
>
>Paul

Thank you. I have pondered your diagram on and off over the
last two years and it has both intrigued and frustrated me.

• It is now apparent to me that before income and time preference
  

there is the issue of time's availability.  Is time available for
us *to use* or is it simply available for us *to be*? If and
when we are *certain* time is useful, we divide our time, ie. our
income, between spending or not-spending.  This is where your
chart becomes applicable. (Note:  monetary-income facilitates
coordinated production because it makes the division of time
socially regular and orderable.)

• However, if and when we are *certain* time is simply for us to be,
  

then we have a choice between producing or saving out of
whatever personal resources or gifts God or Nature gave us.
As producers/savers we either work for "now" (no income)
or we work for the "future" ( an anticipated income). The latter
represents the popular conception of the entrepeneur.

• I am not hung up accounting defintions of savings.
  

I don't know much about such definitions. What I know about
the nature of saving comes from my own experience. I know
that I sometimes deliberately save butter.  I know that sometimes
deliberately save gas. I know that I sometimes deliberately
save paper.  I even know I sometimes deliberately save money.
Am I to deny my own experience and conclude from Keynes
that I am suffering from a delusion of power?

• It seems to me Keynes has it backwards or inaccurate at anyrate.
  

We are born to consume. For better or worse we are hopeless
*consumers* but not necessarily hopeless *spenders*.
Plus we enjoy the ability to save without investing.
All this is common sense and has nothing to do with
"accounting  definitions".

• Keynes' view is partially correct in that it applies to those who
  

are in the midst of *using* time.

This may be nit-picking regarding the above quote, but as a philosopher
Keynes is offering poor advice if he believes that "clearness of mind"
can come from thinking. Either that, or he is engaging in intellectual
posturing to hide his uncertainty about his own supposition.

Contrary to the prevailing 20th century view of science, one of
the marks of a good scientist is not his or her uncertainty.
Rather, it is their sense of certainty based on their own experience.
After that, what counts is how they communicate their certainty
while being able to experience doubt and grace if others
present them with logic and evidence that suggests their certainty
was misplaced.

Harry Veeder