So here Imma just post whatever amazing VR articles I post over the course of this week and the next. Some of them might be a tad controversial so feel free to comment. If you notice any errors in grammer please let me know, that’s always been one of my weaker points.
And in what way would you say they would be in a polemic nature?
What?
Why do you consider some of the contents to utilize controversial utility?
Talk like a normal person and stop trying to be verbose and maybe you’ll find out.
You certainly are bugged by what you find to be prolixity, aren’t you?#### Let’s try this again…why do you consider some of your articles to be of a controversial nature?
Because some of them deal with Austrian Capital and Business Cycle Theory in such a way to challenge the basis of Say’s law and introduces the possibility of a free market recession. This might go down a little easier after I use capital theory to demolish countercyclical fiscal and monetary policy, however.
Most ravishing, I must avouch that I cannot bide sans fluster for the semblence of your article assemblage.
A little harsh, don’t you think? Especially when translated my statement was a compliment (when you subtract the trollface).
Second article’s up
Talk like a normal person and stop trying to be verbose and maybe you’ll find out.
LoL. I literally laughed out loud at that one. That post was nothing but net.
Can you say whose Say’s Law you are challenging? His own or the many who attempted to paraphrase it in his wake?
Thusfar I have yet to have anyone clearly explain to me what Say’s law really is, despite people like Dave trying to do so repeatedly. For this reason I am not attacking Say’s Law explicitly, but rather what Say’s Law is usually employed to express: The idea I am attacking is the idea that there can never be a “general glut”, that demand for goods in general cannot be too low. I think the answer is that they obviously can be.
You can argue that prices are just too high, and while this is true, it is merely another way of saying demand is too low. Either prices or demand can adjust to suit the other, but there can be disequilibrium between the two that results in high-unemployment.
But in cases like the housing bubble the problem wasn’t over production but rather resources being diverted to building houses that could have gone elsewhere. Do you have a solution to the supposed over production problem? (Over production and under consumption are the same thing)
Also the government and Federal Reserve are both going to extremes to keep house prices from falling
The problem of business cycles in modern macro is generally (not always) simplified to one of consumption. The problem in some (not all) Austrian explanations of the business cycle is entirely one of misallocated production. I believe the former leads to the ladder and that both are likely to be present in business cycles.
“Do you have a solution to the supposed over production problem? (Over production and under consumption are the same thing)”
I don’t think it’s fair to call it a matter of over-production. I think the description of ABCT as malinvestment is much more genuine to the problem. The problem isn’t that too much is being produced, but rather that too much of the wrong things are being produced.
Therefore I don’t agree with the bit in parenthesis. If demand and investment were evenly cut throughout the economy overnight then any unemployment would be 100% nominal, not real. This leads to the homogenized view of the production structure causes most mainstream economists to overlook the underlying cause of the recession: real factors that may lead to nominal ones. This removes most obvious problems of monetary and fiscal policy.
My proposed solution to prevent malinvestment is a relatively constant money supply. My proposed solution to prevent underconsumption is to liberalize markets, and prevent malinvestment. The issue is just a tad more complicated than this, but above is the idea in a nutshell.
The idea I am attacking is the idea that there can never be a “general glut”, that demand for goods in general cannot be too low.
Too low for what? And did you mean “demand for goods other than money”?
Why would people want to keep money, instead of ANY other goods? Because they expect the prices falling soon?
Say’s law says that overproduction is impossible. If you agree that the problem is not overproduction but rather mal-investment, then you agree with Say…
I’m in the middle of reading a different book right now but was skimming through Say’s Political Economy and typed in the word glut.
I’ll have to read the whole book some other time but here is Say’s Law
http://socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll3/say/treatise.pdf
"It is worth while to remark, that a product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value…
…But it may be asked, if this be so, how does it happen, that there is at times so great a glut of commodities in the market, and so much difficulty in finding a vent for them? Why cannot one of these superabundant commodities be exchanged for another? I answer that the glut of a particular commodity arises from its having outrun the total demand for it in one or two ways; either because it has been produced in excessive abundance, or because the production of other commodities has fallen short.
It is because the production of some commodities has declined, that other commodities are superabundant. To use a more hackneyed phrase, people have bought less, because they have made less profit;132 and they have made less profit for one or two causes; either they have found difficulties in the employment of their productive means, or these means have themselves been deficient."
Edit: LOL most people think the existance of gluts refutes Say’s law. In reality it seems that Say’s law actually explains why gluts happen
I think it depends on what you mean by “overproduction”. Overproduction is indeed impossible as such, but underconsumption is certainly possible.
I don’t think the quoted passages really sheds much light on the issue. This is why I don’t understand why so many people try to deal with Say. His basic idea is insightful, but many of the conclusions he makes just don’t seem to follow. Central to his assumptions seems to be the assumption of no hoarding or decreases in aggregate demand. In your quoted passages he just doesn’t seem to deal with the idea of net hoarding, and indeed I’ve seen passages where he just seems to state that hoarding is impossible
@Andris
Too low to generally buy what is produced. People would hoard if they are expecting prices to fall or if they expect to lose their jobs in the future or if there’s just general uncertainty in the market. I.E recession.