"The cave-dwellers' language of characteristics would not have suddenly become nonsensical: shadows are not forgeries" - Michael Oakeshott on Plato's cave
Friday, April 15, 2011
Two good quotes
"There is no possibility of balancing the budget except by increasing the national income, which is the same thing as increasing employment." - John Maynard Keynes, 1932
Subscribe to:
Post Comments (Atom)
Posts
"Giving money and power to government is like giving whiskey and car keys to teenage boys." – P.J. O'Rourke
ReplyDeletePrecisely why power and money ought to be monitored and restrained, just like teenagers.
ReplyDeleteBut I'd no more tell people they can't govern themselves and provide for the common welfare than I would support the absurd drinking age in this country.
Let the government spend money and the teenagers drink, and restrain and monitor them both.
No need to be Puritanical in any facet of life, in other words.
ReplyDeleteWhiskey _and_ car keys; P.J. isn't saying that teenage boys shouldn't be able to drink legally.
ReplyDelete"But I'd no more tell people they can't govern themselves and provide for the common welfare..."
The more power and money you give to the state, the less a people govern themselves and the less they have to provided for the common welfare (whatever the hell that is). That is the fundamental flaw with government; the insiders rule and have the resources to do so.
"No man is great enough or wise enough for any of us to surrender our destiny to." - Henry Miller [Note how his books were at one time banned in the U.S. so as to provide for the common welfare.]
National income and employment are not at all the same thing. You would have to stretch the spirit of the words "national income" quite far for me to even agree it has anything to do with budget crises.
ReplyDeleteJust another example of Keynes assuming strict functional relationships between social phenomena.
Nice Miller quote - I can't comment too much longer, but it reminded me of this one:
ReplyDelete"One blames politicians, not for inconsistency, but for obstinancy. They are the interpreters, not the masters, of our fate. It is their job, in short, to register that fait accompli."
Mattheus - I agree they are not the same thing. The point is that at this point increasing national income amounts to increasing employment. Your second sentence I would disagree with (although I supposei t depends on which budget crisis you're talking about). The short term deficit absolutely has to do with it, particularly at the state level - the long term debt crisis does not.
re: "Just another example of Keynes assuming strict functional relationships between social phenomena"
Where is the strict functional relationship? I swear, you guys spend more time inventing areas fo disagreement than you do addressing the actual areas of disagreement.
Henry Miller was one of my gateway drugs to libertarianism.
ReplyDelete"There is no possibility of balancing the budget except by increasing the national income, which is the same thing as increasing employment." - John Maynard Keynes, 1932
ReplyDelete"Woolf once said that you know a true economist when he believes that there is no relation between employment and aggregate demand" - Friedrich Hayek, in an interview late in his life
Now, while Virginia Woolf's father may have been a tad bit arrogant in deciding who is or is not a true economist, I can imagine that when Keynes wrote that, jaws of his peers must have dropped. "He said what?!"
Where is the strict functional relationship? I swear, you guys spend more time inventing areas fo disagreement than you do addressing the actual areas of disagreement.
ReplyDeleteIn the beginning of the GT, Keynes makes explicitly functional equations between output and employment (and since Keynesians, just as a rule, don't disaggregate between any kind of ouput - it all becomes "national income.")
Mattheus...I agree in principle with your criticism, but to be fair, the standard classical model (ie. Sargent) has explicit functional relationships between labor and output and the Keynesian (ie. IS/LM) model does not. The Keynesian model assumes that labor equilibrium returns to its natural level when output is at potential. This carries its own set of problems of course....
ReplyDeleteEdit: labor supply and demand (not equilibrium) return its natural level
ReplyDeleteThere's also an extent to which you can't criticize people simply because they made the effort of constructing a model.
ReplyDeleteDoes a model depend on the strict functional relationship, or is the function illustrative?