Re: James A. Baker III

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

Gunnar Tomasson wrote:
>
> John:
>
> Schumpeter wrote:
>
> "I have not been able to convince myself, for example, that such questions
> as THE SOURCE OF INTEREST are either unimportant or uninteresting.  They
> could be made so, at all events, only by the fault of the author."
>
> What do you make of Schumpeter's question?

Without benefit of context, my first inclination is that
he's addressing the cause of interest not from whence
payment comes. If that is the case, the best I have seen is
Henry George's explanation from _Progress and Poverty_, Book
III, Chapter 3 "Interest and the cause of interest"
available on line at:
http://www.taxreform.com.au/HG/main.htm

_P and P_ also provides an excellent introduction to many
economic problems and their resolution. It has the advantage
of being written by a thinker rather than an expert
regurgitating the thoughts of others. He even includes a
good account of the "technique of thinking" you quote below.
Unfortunately, I haven't located the specific location.

> IF you regard it as "either unimportant or uninteresting", THEN, for what it
> is worth, Schumpeter would place the "fault" with you.

Then I suppose I'm at fault because I find George's
explanation convincing and find no reason to pursue it any
further.

> More generally, Schumpeter's view that the question was an important one
> reflects the classical view that, as Keynes put it, "The theory of economics
> is an apparatus of the mind, a technique of thinking".

Yes, but when one finds an acceptable explanation one just
moves on. At least one does so until someone refutes the
explanation or by other occasion one finds reason to doubt
the explanation.

> The fact that this view of "the theory of economics" is Greek to most modern
> economists is evidence (a) that Keynes and Schumpeter were deficient in
> their mental apparatus and technique of thinking, or (b) that their modern
> successors have gone off the track.

Probably a bit of both, with most fault falling to the
latter. However, this is not in any way to fault the mental
apparatus of Keynes, Schumpeter or any of their predecessors
that didn't have available to them results of the reasoning
they provided.

The quotation "The theory of economics is an apparatus of
the mind, a technique of thinking" applies to much more than
economics; it is a good starting point for any
investigation.

At least that's been my experience.

--
			-- jbod

		Tax Privilege, Not People
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