Re: Capital, saving, investment, and befuddlement.

[Harry Veeder <eo200@xxxxxxxxxxxxxxxxxxx>]

>
> My following Gang8 message of today's date may be of interest.
>
> Gunnar
>
> ********
>
> It is now close to 70 years since Keynes, in collaboration with the Cambridge
> Circle, wrote The General Theory.
>
> And, for close to 70 years, the concepts of "capital", "saving", and
> "investment" have remained befuddled.
>
> I say "befuddled" because there is NO intellectual excuse for conceptual
> confusion with respect thereto.
>
>
> Let's begin with "investment" in the Production Process.
>
> It means - and can only mean - one thing: Mobilization of Factor Resources for
> transformation into Work In Progress > Final Output.
>
>
> What is the meaning of "saving" with respect to such "investment"?
>
> It means - and can only mean - Supply of Factor Resources for transformation
> into Work in Progress > Final Output.


Saving is consumption in progress.
Consumption like production is a process rather than an event, although
economists usually treat it as an event.

The plan behind a delay in gratification (spending) is to receive more
pleasure in the future than can be had in the present.


Harry Veeder




> And how does "capital" relate to "saving" and/or "investment"?
>
> It means - and can only mean - Factor Resources supplied to the Production
> Process for transformation into Work in Progress > Final Output.
>
>
> Finally, what is the meaning of "financial capital" with respect to the above?
>
> It means - and can only mean - what Adam Smith termed the Great Wheel of
> Commerce which, while making no Factor Contribution to the Production Process,
> yet "picks" up Supply of Factor Resources at the Alpha point of the Production
> Process and "delivers" Final Output for disposition by Suppliers of Factor
> Resources at the Omega point of the Production Process.
>
>
> Period.
>
> Gunnar