Re: Keynes's Cockamamy Economics

[Bruce McFarling <ecbm@xxxxxxxxxxxxxxxxxxx>]

I don't think I can do anything except try to state the
basic mistake more clearly.


On 01 November 2001 15:19 UTC, Gunnar Tómasson
<gunnar.tomasson@xxxxxxxxxxx> wrote:

>5.  Considering that "the income of the rest of the community
>is equal to the entrerpreneur's factor cost [such that] aggregate
>income is equal to A - U", it follows that, for the current period,
>A - U = F

Assumes, exactly, that there is no entrepreneurial income in
order to reach the conclusion that A-U=F.  The reason is that
entrepreneurial income is clearly part of aggregate income.
If the income to the rest of the community is F "such that"
*aggregate* income is equal to A-U, then it follows that
A-U = F + entrepreneurial income.

Thus, reading the term A-U as equal to the term F is to
equate entrepeneurial income to zero.  Zero entrepeneurial
income follows from *Keynes* shema *if* we assume that
aggregate income does not include entrepeurial income, so that
factor cost is no included in the difference of A-U, but is
rather equal to the difference of A-U.

In summary, the shema states that "A-U" is aggregate income.
The shema states that Factor Cost "F" is all income other than
entrepeneurial income.  Therefore to equate A-U to F is to
implicitly assume that entrepenteurial income is zero.  It
is therefore assuming its main conclusion, pure and simple.


Virtually,

Bruce McFarling, Shortland, NSW
ecbm@xxxxxxxxxxxxxxxxxxx