Re: Keynes and competition

["Kazuhiro Kurose" <kurose@xxxxxxxxxxxxxxxxxxxxxx>]

> The trouble here is that you are (like most mainstream economists)
> confusing market clearing with market equilibrium.  As I have written many
> times (but no one bothers to read Davidson) Marshall took the term
> equilibrium from physics where it means merely a balancing of forces.
Thus
> a market can be in equilibrium WITHOUT it being cleared!!  Keynes, a good
> Marshallian followed Marshall's terminology (and generally accepted
> "scientific" terminology)  -- but it was the General  Equilibrium people
> who conflated CLEARING with Equilibrium.
>
> Let me say it again Clearing is a suffficient BUT NOT  A NECESSARY
> CONDITION FOR EQUILIBRIUM!!

OK! I used the term "equilibrium" as the same meaning as "clearing", of
course, I know its difference as you said. I'm sorry. I'll hereafter take
care of the differences.
Then I would like to ask you, again, whether or not you think that the goods
market is always cleared in Keynes' system. If you answer "yes", I can
satisfy.

I think that the following two points are  critical in considering about
Keynes' system and the condition of competition. One point is whether or not
one thinks that the goods market is cleared in Keynes' system, the other
point is whether or not one thinks that money is non reproducible asset.
If one thinks that the goods market is cleared and money is reproducible
asset, he has truly classical economic thought kept Say's law holding. If
one thinks that the goods market is cleared and money is non reproducible,
he has, at least , the similar( I don't know the same) idea as you in the
sense that involuntary unemployment can arise because of the existence of
non reproducible money. The above two cases are  consistent with the
assumption of the perfect competition. For no one can affect the price at
all since goods market is cleared. And if one thinks that goods market is
not cleared, he is in the imperfect competition world, irrespective of
whether or not he thinks  of money as non reproducible asset, as shown by
Arrow's paper titled "Toward a Theory of Price Adjustment" in THE ALLOCATION
OF ECONOMIC RESOURCES (1959).
Is my understanding correct??

**************************************
  Kazuhiro Kurose
  Graduate School of Economics and Business
  Administration, Hokkaido University
  Kita 9 Nishi 7, Kita-Ku, Sapporo, Japan
  060-0809
    TEL: +81-11-716-2111 ex:2786
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