Keynes' Legacy

[John Vertegaal <vertegaa@xxxxxxxxx>]

Gunnar Tomasson wrote:

>I don't equate Keynes with either his "legacy" or "followers".

>In the post-Bretton Woods era, his "legacy" has been transformed by
>self-proclaimed "followers" into the notion that the U.S. performs a
>useful function as World Engine of Growth through the spill-over of
>Excess Domestic Credit Creation into a Deficit on External Goods and
>Services account now running at about $500 billion on an annual basis.

Interesting comment Gunnar, that at least may have put me back on your
wavelength.  In a circuitist paradigm: capital creation = credit creation
= potential growth, that is realized through the subsequent resolution
of capital/credit (which can only happen on the retail level).
  This circuit reflects a dynamic equilibrium potential.  Bringing in
foreign trade doesn't really matter, as this is not going to change the
above principle.

So a growth in living standard, the indisputable goal of all economic
endeavour, requires the _resolution_ of capital/credit.  Furthermore,
this resolution has to proceed within the time frame set by creditors;
thus whether this is happening via the round-about way of foreign trade
is critical.  And if it isn't, a paradigm that identifies capital/credit
as an engine of growth doesn't recognize that it's robbing Peter to pay
Paul.  *Capital is nothing but resolvable debt*

Without going into a lot of extraneous details, but just relating the
principle to your comment; it should be obvious enough that if capital/
credit creation is no direct engine to growth domestically, neither can
it be so abroad.

John V