Re: Surplus Value or Profit

[Bruce McFarling <ecbm@xxxxxxxxxxxxxxxxxxx>]

On Mon, 26 Nov 2001 11:11:47 -0500, Gunnar Tómasson
<gunnar.tomasson@xxxxxxxxxxx> wrote:

>Keynes prefaced his above summary statement (3) with the following
>paragraph:

... (long quote) ...
"But it can only exist when, by accident or design, current
investment provides an amount of demand just equal to the
excess of the aggregate supply price of the output resulting
from full employment over what the community will choose to
spend on consumption when it is fully employed."

>Here, Keynes holds it to be a condition of full-employment
>equilibrium that D_2 be "just equal" to the difference between
>"Aggregate Supply Price" and D_1.

But this is not an equilibrium condition, it is just a
condition for there to be full employment in the
equilibrium.

>In other words, the ONLY kind of "finance" envisaged is that
>whereby community savings out of current income are re-cycled
>into investment in the amount of D_2.

No, this is a gross misrepresentation of the quote.  You
are confusing finance and funding here ... in this system,
community savings out of current income will always be
recycled to fund the lending (this is not an open economy,
after all), but the investment occurs first, and the saving
occurs as a side-effect.  This is why there is only full
employment when INVESTMENT is sufficient to full the gap
between the Aggregate Supply Price AT FULL EMPLOYMENT and
what will be consumed at full employment.

How can you take a quote which EXPLICTLY states that it
is sufficient investment that is a constraint, ignore the
fact that is says that it is sufficient investment that
is a constraint, and proceed as if it said something else.
Note that I gave the statements in REVERSE order, and the
statements that INCOME acts through CONSUMPTION and
INVESTMENT is determined by INDUCEMENTS TO INVEST without
ANY dependence on income precedes the long quote that
you give.

Now, it is true that Keynes' description is not the
clearest possible description.  But even when relevant
passages are pointed out to you, you persist in saying
"in other words" and then contradicting the passage that
you just quoted!  Its as if you started with Samuelson's
hydraulic Keynesianism in your head, and thought that the
General Theory was the same theory in more obscure prose,
even as you copy out passages which make it clear that
Samuelson's model and Keynes' are only loosely associated
with each other.



Virtually,

Bruce McFarling, Shortland, NSW
ecbm@xxxxxxxxxxxxxxxxxxx