[OPE-L:6801] Re: Re: Re: Re: Re: Re: Re: Paul Krugman

From: Steve Keen (s.keen@uws.edu.au)
Date: Thu Mar 21 2002 - 15:45:46 EST

I take the point, but in both cases capitalists are supplying both markets 
only to make a profit--it's just that investment capitalists won't make a 
profit unless the consumer ones are doing likewise at a sufficient scale.

Keynes, by the way, was a great fan of Marx's M--C--M+ analysis, and quoted 
it in an early draft of the General Theory. Unfortunately, it was edited 
out. I think the GT would have been a lot less obscure if he had quoted it.

At 03:47 AM 22/03/2002 Friday, you wrote:
>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

Home Page: http://www.debunking-economics.com
Dr. Steve Keen
Associate Professor of Economics & Finance
School of Economics and Finance
Campbelltown Campus, Building 11 Room 30,
s.keen@uws.edu.au 61 2 4620-3016 Fax 61 2 4626-6683
Home 02 9580-4663 Mobile 0409 716 088

This archive was generated by hypermail 2b30 : Tue Apr 02 2002 - 00:00:06 EST