Re: A Future Economics

[Gunnar Tómasson <gunnar.tomasson@xxxxxxxxxxx>]

Re. the following:

> As a starting point I have suggested that we begin with the assumptions
that
> income =/= output and that saving =/= investment.

Comment:

The proposition that income =/= output begs a Question -

Whence Income if NOT from Supply of the Factor Content of Output?

- which Keynes must have considered before writing in 'A Treatise on Money':

"Income. - We propose to mean identically the same thing by the three
expressions:

(1)  the community's money income;

(2)  the earnings of the factors of production; and

(3)  the cost of production;

and we reserve the term _profits_ for the difference between the cost of
production of the current output and its actual sale-proceeds, so that
profits are NOT part of the community's income as thus defined."
(Vol I, Ch. 9, 'Certain Definitions')

In other words, Keynes' implicit Answer is that Income =/= Output makes NO
sense.

The contrary case is routinely asserted, implicitly or explicitly, by PKT
economists -

but, to the best of my knowledge, never actually SHOWN to be intelligible.

Gunnar



----- Original Message -----
From: "Harry Veeder" <eo200@xxxxxxxxxxxxxxxxxxx>
To: "post keynesian thought" <pkt@xxxxxxxxxxxxxxxx>
Sent: Saturday, November 01, 2003 6:39 AM
Subject: Re: A Future Economics


>
>
> > From: Gunnar Tómasson <gunnar.tomasson@xxxxxxxxxxx>
> > Date: Thu, 30 Oct 2003 11:40:27 -0500
> > To: post keynesian thought <pkt@xxxxxxxxxxxxxxxx>
> > Subject: Re: A Future Economics
> >
> > Re. the following:
> >
> >> If Say's law refers to a closed (ideal) system, then isn't about time
to
> >> draft the laws of an open (real) system?
> >
> > Comment:
> >
> > Economists have tried to do just that since the 1930s - so far without
> > success.
>
> As a starting point I have suggested that we begin with the assumptions
that
> income =/= output and that saving =/= investment.
>
> If the current relations are given by:
>
>   1.1)    Output = Consumption + Investment
>
>   1.2)    Consumption = Output - Investment
>
> and by:
>
>   2.1)    Saving = Income - Consumption
>
>   2.2)    Consumption = Income - Saving
>
>
> Qualify 1.2 as consumption directed by investors (Ci) and
> 2.2 as consumption directed by savers (Cs).
>
> When the inflation rate is zero, consumption directed by investors is
equal
> and opposite to consumption directed by savers:
>
>           Ci + Cs = 0
>
>
> When the inflation rate is greater than zero, consumption directed by
> investors is greater than the consumption directed by savers:
>
>           Ci + Cs > 0
>
>
> When the inflation rate is less than zero, consumption directed
> by investors is less than the consumption directed by savers:
>
>           Ci + Cs < 0
>
>
> Comments welcomed.
>
> Harry
>
> > Past failure has not persuaded the two Pauls - Samuelson and Davidson -
> > that, in principle, the task is impossible.
> >
> > In this respect, the Ergodicity vs. Non-Ergodicity aspect of their
> > respective research agendas mirrors the NKS distinction between
> > Computational Reducibility (as in an ideal system exemplified by Say's
Law)
> > and Irreducibility (as in real-world non-Say's Law systems).
> >
> > Keynes, in (a) attempting the task with _The General Theory_ and (b)
selling
> > the result to his peers, fudged the distinction between the two in
Chapter I
> > as follows:
> >
> > "I shall argue that the postulates of the classical theory are
applicable to
> > a special case only [one characterized by Computational Reducibility -
> > insert] and not to the general case [characterized by Computational
> > Irreducibility - insert], the situation which it assumes being a
limiting
> > point of the possible positions of equilibrium [the very concept of
which is
> > meaningless for a system characterized by Computational Irreducibility -
> > insert]."
> >
> > Gunnar
> >
> >
> >
> > ----- Original Message -----
> > From: "Harry Veeder" <eo200@xxxxxxxxxxxxxxxxxxx>
> > To: "post keynesian thought" <pkt@xxxxxxxxxxxxxxxx>
> > Sent: Wednesday, October 29, 2003 5:48 PM
> > Subject: Re: A Future Economics
> >
> >
> >> Gunnar wrote:
> >>
> >>> The most egregious example of such failure remains the construction of
> > the
> >>> Closed-System Say's Law of Markets as an Open-System proposition,
> > whereby a
> >>> strictly axiomatic or Analytical conclusion is incongruously held to
> > have been
> >>> 'refuted' by Common Sense appeal to the Empirical phenomenon of
> > non-clearing
> >>> markets.
> >>
> >> If Say's law refers to a closed (ideal) system, then isn't about time
to
> >> draft the laws of an open (real) system?
> >>
> >> Harry
> >>
> >>
> >>
> >
> >
>
>