Re: Aspirations

[pdavidso <pdavidso@xxxxxxx>]

>===== Original Message From "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx> =====
>Economists use words that convey conventional meanings. It would be
>helpful if they are a bit more philosphical in their discourse.  One of
>the reason that British economists had more to say in past centuries was
>that they were less concerned with the mechanics of economic concepts
>and more concerned with the philsophical aspects of these concepts.
>
>Take for example the word spending, around which the discussion between
>Harry and Paul has been hinged.  What is spending?

When I use the term SPENDING in iscussing aggregate supply and aggregate
demand I have always explicitly state that it meant spending ON THE PRODUCTS
OF INDUSTRY!

  Surely spending
>money is only one aspect of the meaning of the term, the financial
>meaning, not necessarily the economic meaning.  When Harry talks about
>spending one's time, whether such activity is financial functional or
>not, does not negate that it is an economic act. Time is not free, and
>no one in ab economic system fully control his/her own time.  Nor does
>one need to have money before one can spend it.  Thus spending is an act
>of dispensing resources, whether currently owned by the spender or not.
>Even time can be spent economicly through borrowed time.  Robbing a bank
>with full preparedness to eventually getting caught and spend time in
>prison is an example.  Thus spending is an act of exchange, and as such
>it involves issues of value, efficiency, profit or loss, timing,
>appropriatenss, and above all luck.  Russian credit to Iraq was bad luck.
>
>Like all concepts, spending need a counterpart concept to exist.
>Spending cannot occur without another party earning.


Spending on the products of industry is the ONLY kind of spending that creates
INCOME in the NIPA sense.

Thus economically
>it is a wash.  If spending provides a profit to the counterpart earning,
>then there is growth.  It is produces a loss, then there is recession.

Spending that produces a loss means spending on the products of industry is
less than the  flow of payments that industry that industry has contracted for
in its attempt to produce goods and services.

paul

Paul Davidson
Editor, Journal of Post Keynesian Economics
University of Tennessee
SMC 503
Knoxville, Tennessee 37996-0550
office phone #;(865)974-4221; office fax# (865)974-1686 or (865)974-4601
home phone and fax # (865)692-0802
email pdavidson@xxxxxxx
http://econ.bus.utk.edu/davidsonextra/Davidson.html