Say's Law the Root of the Economics in Atlas Shrugged

Posted by mshupe 9 months, 1 week ago to Economics
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With pen and ink, Adam Smith made the entrepreneur invisible. J.B. Say brings him back to life and to the center of the stage. What do these entrepreneurs do? They use their industry to organize and direct the factors of production so as to achieve the satisfaction of human wants. But they are not merely managers. They are forecasters, project appraisers, and risk-takers as well.

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  • Posted by CircuitGuy 9 months, 1 week ago
    Keynesian theory makes a lot of sense to me, but I question if it's practical. It's easy to envision factors of production underused. The factory might have been running 2 shifts six days a week, with maintenance at night. Then a recession occurs, and the factory furloughs workers and is down to four 8-hr shifts a week. No one is buying their stuff b/c of unemployment. The factories won't hire until consumers are spending, and they won't spend until people are hiring. It makes perfect sense to find someone way to prime the pump. If the priming comes from loose monetary/fiscal policy, the problems are the central bank and gov't actually knowing how much stimulus is needed, avoiding encouraging malinvestment, and the biggest problem is taking away the punch bowl once the party gets going. I believe the boom-bust cycle and occasional speculative mania occur with or without Keynesian efforts to smooth out the cycle, so more and more lean toward leaving the gov't and central banks out of it.

    I don't quite get the supply-side stuff. Is that saying prime the pump in some way other than fiscal and monetary policy? Or is it just saying do nothing, which is more-and-more my position. I used to say the central bank could be kept independent from gov't. In the worst case, we could elect politicians for tight policy, if you want that inference to err on the side contracting the money supply. But you could elect someone bat$hit insane who campaigns on tight policy and then, as a result of drug use or short attention span, openly demands the central bank pursue loose policy for blatantly political reasons. All this makes me want to move toward cryptocurrency and cut out the central banks and the politicians who would be tempted to interfere with them. I used to say that would never happen, but I also never thought we'd elect a Republican who would publicly say he "fell in love" with communist dictator. That's a walking advertisement for small gov't.

    I think the CFI site has a requirement that all articles must have the phrase social justice shoehorned in, even if it's unrelated. I'm a supporter of the social justice efforts at my UU congregation who work on good projects completely unrelated to these articles. We're also against the French Reign of Terror. What the heck is that about?

    Thanks for posting an article with a different opinion. I think you're on to something in that central banks may become obsolete because of competition with cryptocurrencies, and it's important to think about what if anything will replace them.
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    • Posted by 9 months, 1 week ago
      Thanks for taking time to give your analysis. First, you're right about CFI being focused on social justice. That's right now, we just finished a series evaluating Hayek's Mirage of Social Justice and I'm beginning one about the opposite, Poetic Justice. Otherwise it's mostly entrepreneurship, innovation, and the sharing economy. The reservations you have about Keynesian savants being able to to do less harm than good is good instinct. It's impossible, information is too widely dispersed, as it should be.
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  • Posted by 9 months, 1 week ago
    Without producers, there would be no consumers. The supply side is the only side. Producers create value by anticipating what consumers will pay for.
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