Re: [OPE-L] essentials and scope

From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Fri Sep 15 2006 - 09:45:05 EDT

--- Jerry Levy <Gerald_A_Levy@MSN.COM> wrote:

> Ajit and Howard:
> OK, Ajit.  Thanks for your re-cap and narrative.  I
> agree that we
> should stick to one question at a time.  Let's stick
> to the
> question: is money an *essential* aspect of
> capitalism?  (it's not that I am "more comfortable
> with" the concept of essential; rather, it's that I
> am more
> comfortable having a *cross-paradigm discussion*
> over
> that topic.)
> Let me ask you a direct 'yes or no' question:
> -- is money essential to capitalism?
> If you answer that question 'yes' then that will
> lead us in
> one direction of discussion; if you answer it 'no'
> then
> it will lead us in another direction.
> It should be clear, on the basis of other posts,
> that I would
> answer that question with a 'yes'.

Well, Jerry! I don't know how long I can go on on this
thread, but I will try to humour you one more time.
Instead of answering your question by yes or no, let
me ask you few yes or no questions:
(1) Is transportation of goods essential to
(2) Is stock Market essential to Capitalism?
(3) Are Engineering colleges essential to capitalism?
(4) Are schools essential to capitalism?
(5) Are railways, roads, and ports essential to
You may answer yes to all the above questions or yes
to some or no to some depending on your choice. The
point is that such questions are of no particular
interest as such. I'm not sure whether you have a good
sense of what you mean by "money" when you ask the
question. The interesting thing about Adam Smith and
the rest of classical economists as well as most of
neoclassical economists is not that they give "no"
answer to your question--actually they don't; they
simply don't ask such sterile questions--but rather
that they showed through their analysis that changes
in money supply causes only 'nominal effects' in the
system and not 'real effect'. The interesting thing
about Keynes is not that he answered "yes" to your
question, but rather through his analysis he showed
that changes in money supply has real effect--thus the
nominal and the real economy cannot be dichotomized.
The point of it all is that you need to stop asking
theoretically sterile questions if you want to do
something interesting. I hope this was helpful.
Cheers, ajit sinha

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