Re: The Axiom of Gross Substitution

["Gunnar Tomasson" <gunnar.tomasson@xxxxxxxxxxx>]

Paul:

Re. the following, which caught my eye this morning:

> >I agree, although I would say it differently.  The gross substitution
axiom
> >says everything may POTENTIALLY be used as a substitute for everything
else.
> >It does not require that everything is CURRENTLY being used as substitute
> >for everything else.

Comment:

On Gang8, I suggested - and Geoffrey Gardiner agreed - that Money is a
"claim" ON rather than "store" OF "value".

The "store of value" concept is a carryover from the world of Commodity
Money which has no place in the contemporary world of paper/electronic
"money".

And, once the "claim on value" view of Money is admitted, the Gross
Substitution Axiom goes out the window - for Money is then to "value" what
Laundry Ticket is to Laundry.

Or, to put the point differently, Money is to Value what an IOU is to Value
supplied/received.

Gunnar


----- Original Message -----
From: "pdavidso" <pdavidso@xxxxxxx>
To: "Harry Veeder" <eo200@xxxxxx>
Cc: <pkt@xxxxxxxxxxxxxxxx>
Sent: Thursday, March 13, 2003 12:07 AM
Subject: Re: The Axiom of Gross Substitution


> >===== Original Message From Harry Veeder <eo200@xxxxxx> =====
> >>Paul:
> >> I can not believe you are so wrong Harry.  All I said is that the gross
> >> substitution axiom implies everything is a substitute for everything
else
> --
> >> whether it be in production, co9nsumption, finance, etc..  Accordingly,
all
> >> one has to do is to point to any sector where things are not gross
> >> substitutes.
> >
> >Harry:
> >I agree, although I would say it differently.  The gross substitution
axiom
> >says everything may POTENTIALLY be used as a substitute for everything
else.
> >It does not require that everything is CURRENTLY being used as substitute
> >for everything else.
> >
>
>
> >>Paul:
> >> This does not mean that other things can NOT be substitutes harry --
after
> all
> >> no one will deny that coffee and tea are substitutes, or bonds are
> substitutes
> >> for money (and stocks) for liquidity purposes.
> >
> >Harry:
> >Sorry, I am not very good at expressing myself in words.
> >Let me say... even when something produced does not serve as a substitute
> >for money, there always other another thing, another valuable,  which is
not
> >produced and does serve as substitute for money. e.g. land and labour are
> >often regarded as substitutes for money.
>
> No labour cannot be used as a store of value -- unless you are talking
about
> slaves.  But both labour and land have high carrying costs and hence in a
word
> where there are financial assets with low carrying costs-- land and slave
> labour is not a good substitute for money.
>
> Paul
>
> Paul Davidson
> Editor, Journal of Post Keynesian Economics
> University of Tennessee
> SMC 503
> Knoxville, Tennessee 37996-0550
> phone # (561)369-1951; fax #(561)369-1951;
> email pdavidson@xxxxxxx
> http://econ.bus.utk.edu/davidsonextra/Davidson.html
>
>