Re: Keynes' Legacy

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

John:

I like the following:

*Capital is nothing but resolvable debt*

It is a succinct restatement of (a) classical "value" theory, and (b)
Keynes' thinking in those parts of the 'General Theory' where he reasoned
(correctly) that change in the "value" of the economy's work in progress is
always and necessarily commensurate with change in the net factor content of
such work in progress.

Gunnar




----- Original Message -----
From: "John Vertegaal" <vertegaa@xxxxxxxxx>
To: "Gunnar Tomasson" <gunnar.tomasson@xxxxxxxxxxx>
Cc: "POST KEYNESIAN THOUGHT" <pkt@xxxxxxxxxxxxxxxx>
Sent: Thursday, May 15, 2003 8:22 PM
Subject: Keynes' Legacy


>
> 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
>
>
>