Re: Savings fallacy redux (was Re: Method)

[John Vertegaal <vertegaa@xxxxxxxxx>]

"Dr. Bruce McFarling" <ecbm@xxxxxxxxxxxxxxxxxxx> wrote:

>... it is invalid to conflate financial wealth and real wealth.
>Which implies that seperate terms are needed for the seperate
>values.

In the real-world, or in the world as sketched by the GT; or are
they the same?  Is there any purpose or determinable value for
"financial wealth", other than eventually being able to turn it
into "real wealth"?
  What does it mean in the real-world? where as a rule of doing
business the retail sector has to assume all disbursements made,
both higher up in the economy and on their own level, and depends
on a return for survival.
The real-world economy, while producing real wealth, is thus always
out on a limb.  It's both in disequilibrium and in debt (regardless
of outstanding loans!); and equilibration and the resolvability of
debt are only a potential ongoing possibility in a dynamic sense.
Is this the world of the GT?


>The GT points out the connection between finance for EXPENDITURE,
>the use of income to finance EXPENDITURE, and the use of income to
>accumulate FINANCIAL wealth, that is, the SAVING that takes place
>in the period.

Yes but, as far as I understand it's a comparative static depiction
of a dynamic reality.  Assuming for a moment that it's possible to
turn the GT dynamic, would there still be a positive meaning left
for the term "SAVING"?


>There is no point in claiming to have found a "flaw" in Keynes'
>reasoning if you first replace the definitions for the terms used
>with entirely different definitions.

If there is a "flaw" in Keynes' reasoning, it would be because he
is at odds with reality. i.e. the GT cannot be turned "dynamic"
without some of its definitions losing their original meaning.

John V