[OPE-L:6797] Re: Re: Re: Re: Re: Re: Paul Krugman

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Thu Mar 21 2002 - 11:47:10 EST

Steve writes in 6794

>The argument in that chapter was just to explain Keynes's critique 
>of Say's Law Rakesh: it wasn't the basis of my entire analysis of 
>cycles in capitalism! -:)
>All that Keynes was trying to do in his D1/D2 analysis was counter 
>the neoclassical view that if there are 2 markets and one goes down, 
>the other must go up--insufficient demand in one means excess demand 
>in the other. Keynes simply divided output into two markets and gave 
>an explanation why if one (consumption) went down, then the other 
>(investment) was likely to go down too--not up.

Well of course I do not disagree with the possibility either in 
theory or reality of general gluts.

My point is that the claim that the demand for investment goods 
derives from the demand for consumption goods seems to be a 
euphemistic way of articulating the pretty conception that the aim of 
capitalist production is the direct satisfaction of the consumption 
of the producers.

This is why I am sensing something of a contradiction in this chapter.

All the best, Rakesh

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