Re: Liquidity Preference and State Theory of Money

["Forstater, Mathew" <ForstaterM@xxxxxxxx>]

I don't see why J. S. Mill's statement that the "demand for commodities
is not the demand for labour" need be thought of as an "anti-General
Theory dictum".  Certainly not an anti-Keynesian dictum, anyway.

Keynes held technological change (and other factors) constant in the
General Theory, not because he believed these assumptions reflected the
"economic society in which we actually live" but for ease of exposition
writing in a time of great crisis. There are a number of other places
where Keynes expressed concern about technological unemployment, which
is what I take Mills dictum to be about.

Technological unemployment and Keynesian unemployment are complementary,
not opposed.  Look at Pasinetti's work, e.g.  They can even be related,
as labor-displacing technological change can result in an effective
demand shock.

As Lerner pointed out, with a full employment policy, we can welcome
technological change, instead of lamenting it because we allow
unemployment to result from technical advances.

-----Original Message-----
From: Gunnar Tomasson [mailto:gunnar.tomasson@xxxxxxxxxxx]
Sent: Sunday, May 04, 2003 1:38 PM
To: Harry Veeder; post keynesian thought
Subject: Re: Liquidity Preference and State Theory of Money

Re. the following:

> When you say this, do you have in  mind Keynes' type of saving
> (where saving = income - consumption spending)...

Yes - (where saving = income - consumption spending = Net Factor
Investment
in the Economy's Work in Progress).

> Also, if THAT TYPE of saving and investment are one and the same
thing,
then
> a boost in consumption spending does not boost that type of
investment.

Agree.

Hence John Stuart Mill's anti-General Theory dictum:

"Demand for commodities is not demand for labour."

Gunnar

----- Original Message -----
From: "Harry Veeder" <eo200@xxxxxxxxxxxxxxxxxxx>
To: "post keynesian thought" <pkt@xxxxxxxxxxxxxxxx>
Sent: Saturday, May 03, 2003 8:31 PM
Subject: Re: Liquidity Preference and State Theory of Money


> Gunnar wrote:
>
> <SNIP)
> >
> > For, by joining Ohlin et al. in debate on a NON-issue insofar as
"the
> > process of capital formation" is concerned, Keynes overlooked the
BIG
> > issue - namely, that the "equality between saving and investment:"
is
NOT a
> > function of "the level of income".
> >
> > That "saving" - 'finance' provided by suppliers of factor services -
and
> > "investment" - net factor content of the economy's work in progress
-
are
> > one and the same thing at ALL levels of income.
>
> When you say this, do you have in  mind Keynes' type of saving
> (where saving = income - consumption spending) or the alternate type
known
> as the flow funds account as described in my recent post 'NIPA and
saving'.
> If you have in mind the former, then I agree.
>
> Also, if THAT TYPE of saving and investment are one and the same
thing,
then
> a boost in consumption spending does not boost that type of
investment.
>
>
> Harry Veeder
>
>
>