tag:blogger.com,1999:blog-4900303239154048192.post2222968058557670862..comments2024-03-06T06:34:42.881-05:00Comments on EconoSpeak: One Man's Profit is Another's LossUnknownnoreply@blogger.comBlogger5125tag:blogger.com,1999:blog-4900303239154048192.post-73448452365071677132016-09-23T11:53:24.414-04:002016-09-23T11:53:24.414-04:00"It was precisely from the concept of equilib..."It was precisely from the concept of equilibrium that Keynes was struggling to escape." -- Joan Robinson<br /><br />I'll take Joan's word for it over anonymous's. A couple of weeks ago, I posted this observation from the Maynard:<br /><br />"For some two hundred years both economic theorists and practical men did not doubt that there is a peculiar advantage to a country in a favourable balance of trade, and grave danger in an unfavourable balance, particularly if it results in an efflux of the precious metals. But for the past one hundred years there has been a remarkable divergence of opinion. The majority of statesmen and practical men in most countries, and nearly half of them even in great Britain, the home of the opposite view, have remained faithful to the ancient doctrine; whereas almost all economic theorists have held that anxiety concerning such matters is absolutely groundless except on a very short view, since the mechanism of foreign trade is self-adjusting and attempts to interfere with it are not only futile, but greatly impoverish those who practice them because they forfeit the advantages of the international division of labour. […] Nevertheless, as a contribution to statecraft, which is concerned with the economic system as a whole and with securing the optimum employment of the system’s entire resources, the methods of the early pioneers of economic thinking in the sixteenth and seventeenth centuries may have attained to fragments of practical wisdom which the unrealistic abstractions of Ricardo first forgot and then obliterated." -- John Maynard KeynesSandwichmanhttps://www.blogger.com/profile/11159060882083015637noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-84521315538870323142016-09-23T08:43:02.630-04:002016-09-23T08:43:02.630-04:00"Malthus's Essay [on the Principle of Pop..."Malthus's Essay [on the Principle of Population, 1798] is a work of youthful genius. The author was fully conscious of the significance of the ideas he was expressing. He believed that he had found the clue to human misery. The importance of the Essay consisted not in the novelty of his facts but in the smashing emphasis he placed on a simple generalisation arising out of them. Indeed his leading idea had been largely anticipated in a clumsier way by other eighteenth-century writers without attracting attention.<br /><br />"The book can claim a place amongst those which have had great influence on the progress of thought. It is profoundly in the English tradition of humane science in that tradition of Scotch and English thought, in which there has been, I think, an extraordinary continuity of'feeling, if I may so express it, from the eighteenth century to the present time the tradition which is suggested by the names of Locke, Hume, Adam Smith, Paley, Bentham, Darwin, and Mill, a tradition marked by a love of truth and a most noble lucidity, by a prosaic sanity free from sentiment or metaphysic, and by an immense disinterestedness and public spirit." (pages 100-101)<br /><br />A little later, the author (let's call him Mr. X) writes:<br /><br />"I cannot forbear to follow on with that famous passage from the second edition (p. 571), in which a partly similar idea is introduced, more magnificently clothed, in a different context (in criticism of Paine's Rights of Man): <br /><br /><i>"A man who is born into a world already possessed, if he cannot get subsistence from his parents on whom he has a just demand, and if the society do not want his labour, has no claim of right to the smallest portion of food, and, in fact, has no business to be where he is. At nature's mighty feast there is no vacant cover for him. She tells him to be gone, and will quickly execute her own orders, if he do not work upon the compassion of some of her guests. If these guests get up and make room for him, other intruders immediately appear demanding the same favour. The report of a provision for all that come, fills the hall with numerous claimants. The order and harmony of the feast is disturbed, the plenty that before reigned is changed into scarcity; and the happiness of the guests is destroyed by the spectacle of misery and dependence in every part of the hall, and by the clamorous importunity of those, who are justly enraged at not finding the provision which they had been taught to expect. The guests learn too late their error, in counteracting those strict orders to all intruders, issued by the great mistress of the feast, who, wishing that all her guests should have plenty, and knowing that she could not provide for unlimited numbers, humanely refused to admit fresh comers when her table was already full."</i> (also p. 106)<br /><br />The passage in italics comes from Malthus (more precisely, from the second version of his Essay). Malthus is precisely speaking about the limited quantity of food: "At nature's mighty feast there is no vacant cover for him. She tells him to be gone, and will quickly execute her own orders, if he do not work upon the compassion of some of her guests."<br /><br />The author quoting Malthus -- Mr. X -- agrees with the "magnificently clothed idea" contained in the passage above. <br /><br />Mr. X calls the first version of Malthus' Essay "a work of youthful genius", "profoundly in the English tradition of humane science", "a tradition marked by a love of truth and a most noble lucidity, by a prosaic sanity free from sentiment or metaphysics, and by an immense disinterestedness and public spirit".<br /><br />Who is Mr. X, Malthus' appreciative fan?<br /><br />Go ahead, guess.<br /><br />Mr. X was J.M. Keynes, 1st Baron Keynes.<br /><br />The quotes come from "Robert Malthus (1766-1835): the first of the Cambridge economists", included in "Essays in Biography".<br /><br />Magpiehttps://www.blogger.com/profile/07528637318288802178noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-21418289061181377342016-09-23T00:33:00.451-04:002016-09-23T00:33:00.451-04:00
Oh yes it is! Neither Keynes nor his many predec...<br />Oh yes it is! Neither Keynes nor his many predecessors (such as Hamilton) or successors (say, Michael Pettis) subscribed to the intellectual food for the infant that in some quarters still passes for respectable economics. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-65567832403535948072016-09-22T10:28:50.846-04:002016-09-22T10:28:50.846-04:00"this disproof of this is the essence of Keyn..."this disproof of this is the essence of Keynes work"<br /><br />No it's not.Sandwichmanhttps://www.blogger.com/profile/11159060882083015637noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-20236411647676665452016-09-22T08:06:19.277-04:002016-09-22T08:06:19.277-04:00"There is this fixed quantity of whatever it ..."There is this fixed quantity of whatever it is and if you get more, I get less. One man's profit is another's loss."<br /><br />this disproof of this is the essence of Keynes workAnonymousnoreply@blogger.com