tag:blogger.com,1999:blog-1740670447258719504.post6608793600183243858..comments2024-03-27T03:00:27.024-04:00Comments on Facts & other stubborn things: Harberler on Keynes and aggregationEvanhttp://www.blogger.com/profile/12259004160963531720noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1740670447258719504.post-50297595371380179952012-05-13T16:44:38.587-04:002012-05-13T16:44:38.587-04:001. I'm sorry, but the quote sounds like a pink...1. I'm sorry, but the quote sounds like a pinky's up version of my narrative: The purpose of Keynesianism is simply to trick average people into accepting lower real wages and prices without them understanding what hit them. And that the "problem", such as it is, only arises as the result of prior Keynesian-style or fractional reserve banking policies. <br /><br />2. My problem with the terms "aggregate demand" and "effective demand" is that they are presumptuous. They baselessly imply that the "economy" is mechanical and that "demand" is a thing (and a unitary thing at that) which can be properly pumped up with wise government action. People who are steeped in Keynesian jargon then cannot begin to comprehend what has really happened: An entire society has been misled and duped into thinking that they were all more wealthy (due to money dilution) than reality ultimately demonstrates that they actually were. The terminology is designed to make incomprehensible to the Keynesian the explanation that reality-based pricing is the solution to the problem .Bob Roddishttps://www.blogger.com/profile/17263804608074597937noreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-43369011951631617772012-05-13T14:43:35.991-04:002012-05-13T14:43:35.991-04:00This is more or less what I was trying to imply wh...This is more or less what I was trying to imply when I decided to quote Harberler this weekend. The only thing I would add is that everyone seems to be arguing past each other, and this goes both ways. Wrt to Keynes and modern Keynesians (of whatever particular strand) I would say that the Austrian argument is not against effective demand, but it's about the idea that there is a specific pattern to higher effective demand that is sustainable. I'm not saying they're (we're) right; I'm just saying that our story can be construed as an effective demand one, as well (even though, unfortunately, too many Austrians are insubstantially opposed to using "Keynesian" terminology, as if every single detail of another school's body of theory is wrong).<br /><br />Economists like Krugman simply don't engage it, even if they would still disagree with it.Jonathan Finegold Catalánhttps://www.blogger.com/profile/16710256011291680376noreply@blogger.com