Welcome to the new version of European Tribune. It's just a new layout, so everything should work as before - please report bugs here.

The Credit Bubble theory of the Business Cycle (I: Veblen)

by Migeru Sat Feb 13th, 2010 at 03:15:04 AM EST

A couple of years ago, at the suggestion of ETer BruceMcF, I read Veblen's (1904) Theory of Business Enterprise. This substantially changed my outlook on economics.

The book basically lays bare that the business community and the capital markets are two steps removed from the welfare of the community, and also how economic theory was devised for the "money economy" ca. 1800 and how its assumptions are inadequate for the economy of 1900 (and since). The book also touches on a topic that is popular here, which is how important narratives are and how they interact with institutions and the daily life people lead. The book resonates with Jerome's old dictum Wealth capture is not wealth creation.

Veblen (apparently following late-19th-century German economic historians) distinguishes between the natural economy, the money economy and credit economy. The natural economy is before trade fully develops, say Europe's Early Modern period. In the natural economy, most business is done on a small scale to earn a living. Then comes the money economy of the first Industrial Revolution, centering around the the market (commerce) and money (banking). In the money economy, you get partnerships and private ownership of industrial enterprises. And finally we get the credit economy, business is done by corporations and we see the rise of a management class. We're not talking about one kind of activity or firm organization replacing others, but about what is the main driver of the economy. Another way to refer to these three economies might be pre-industrial, industrial, and post-industrial.


Now, Neoclassical Economics has been a successful attempt to keep economic thought stuck in an industrial, money economy, partnership and private business, market narrative; while the world moved on to a post-industrial, credit economy, corporation-based economic reality. This mismatch between economic ideology and reality allows wealth capture by the management class.

It is somewhat striking to realise that this was written fully 60 years before Galbraith's New Industrial State and then completely ignored by economists. If people reasoned about the credit economy like Veblen does, it would be curtailed politically very quickly. Maybe that's why we got NCE and it was Veblen's line of thought that was curtailed.

Update [2010-2-13 4:53:16 by Migeru]:

Veblen focuses in particular on the rate of profit, namely a putatively stable time-rate of return on capital. In the natural economy this concept doesn't make sense, among other thing because there is not enough capital accumulated for anyone to bother attributing it a separate contribution to income. But Veblen argues that the concept doesn't even make sense in the credit economy. The clearest example is the business of Mergers and Acquisitions, where an operation is financed and profit is booked as a single event. Here the meaningful concept is the margin obtained in a single operation, and total profit depends more on turnover or volume than it does on time. In addition, he explains how mergers and acquisitions can, as often as not, destroy value, even from the point of view of "rate of return".

Now, a mismatch between economic narrative and reality has practical consequences. In the case of the rate of return, people schooled in the concepts of the "money economy" will go around calculating time-rates of return for everything and, what is more important, demanding particular rates of return on credit where they have no right to expect them. There will be an "accepted rate of return" at any given time, set by the capital markets, and firms value investments with respect to a "required rate of return" which is pulled out of thin air.

Veblen also discusses how the capital markets (and the capitalization of the economy) bear little relation to the functioning of the industrial complex or the aggregate value of the plant. Basically, because they are asset price movements, increases in capitalization don't necessarily reflect new investment. Occasionally there's new capital raised for investment but that's a marginal part of the operation of the capital markets, which trade in claims on existing capital.

According to the conventional wisdom, asset price movements adjust valuations to take account of perceived likely changes in value. The key here is in the word "perceived": it's all in people's heads. Unless a company loses capitalization to the point of making it insolvent because of lack of access to credit, it will still have the same operations - just the plant will have a lower asset value. Now, low capitalization makes the company vulnerable to a takeover, which is bad for management as they would get replaced. But here we see the divorce between the interests of management and the interests of the firm as a going concern. The conventional wisdom posits that there is, nonetheless, a relationship between the plant's value in the capital markets and its ability to sell goods, but this "ability to sell goods" is encompassed by Veblen under the concept of "goodwill" or "intangible assets" (brands, reputation, customer fidelity...). Veblen's point is that the credit economy is all about goodwill, not about industry, whereas the money economy was about industry and commerce. He also implies that, as soon as a private company (the main actor in the money economy) grows to the point where it accumulates a sufficient amount of "goodwill" (or a monopoly position) it will incorporate, go public and join the credit economy, and from that point on it will generate a lot of financial activity around its "goodwill", decoupled from its going concern.

Display:
Gone is Socratic Economics, I'm now angry and arrogant enough for Economic Heresy.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Sat Feb 13th, 2010 at 03:16:10 AM EST
This is from a conversation with Drew in June 2008...

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Sat Feb 13th, 2010 at 04:54:13 AM EST
European Tribune - The Credit Bubble theory of the Business Cycle (I: Veblen)
Veblen's point is that the credit economy is all about goodwill, not about industry, whereas the money economy was about industry and commerce.

It is all about the Logo. I suspect a parallel reading of Veblen and Kleins No Logo would be rewarding.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Sat Feb 13th, 2010 at 05:22:58 AM EST
a wiki summary of the book here.

You can't be me, I'm taken
by Sven Triloqvist on Sat Feb 13th, 2010 at 05:51:28 AM EST
[ Parent ]
by rootless2 on Sat Feb 13th, 2010 at 11:08:52 AM EST
Capital as Power by Nitzan and Bichler is built on Momsen's theory of societies as super-machines, such as Hobbs' vision of Leviathan and Veblen's work, including Theory of Business Enterprise (1903) and Absentee Ownership and Business Enterprise in Recent Times (1923).

In Chapter 17 of Capital as Power Nitzan and Bichler discuss Veblen's world:

Industry and Business

For Veblin, industry and business are two increasingly distinct spheres of human activity. Industry constitutes the maaterial context of capitalism, although industry is not unique to capitalism. When considered in isolation from contempoorary business institutions, the principal goal of industry, its raison d'etre according to Veblin, is the efficient production of quality goods and services for the betterment of human life. The hallmark of industry is the so-called 'machine process' a process that Veblin equated not merely with the use of machines, but more properly with the systematic organization of production and the reasoned application of knowledge. Above all, Veblin accentuated the holistic nature of industry. The neoclassical emphasis on individualism and its Robinson Crusoe analogies of the innovative 'entrepreneur' are misleading myths. The 'machine process' is  a communal activity; its productivity derives, first and foremost, from cooperation and integration. The reasons are both historical and spatial.

....

Although Veblen's emphasis on integration and synchronization hardly seems earthshaking, mainstream and to some extent Marxist economists have systematically ignored two of its key implications. One implication of integration and synchronization is that distribution cannot possibly be based on individual factor productivity or atomized labor time. Consequent to this conclusion, the other implication is that distribution should be sought in the realm of power. (Bold added.)

This is where business comes into the picture. According to Veblin, business differs from industry in both methods and goals. Business enterprise means investment for profit. It proceeds through purchase and sale toward the ulterior end of accumulated pecuniary wealth. While industry is a manifestation of the 'instinct of workmanship', business is a matter of ownership and power; whereas the former requires integration, cooperation and planning throughout society, the latter depends and thrives on conflict and antagonism among owners and between owners and the underlying population.

The two languages

These profound differences have crystallized into two separate languages. Unlike industrial activity, with its tangible, material categories, business traffic and acheivements are counted strictly in pecuniary terms. Economists insist on reducing 'nominal' business magnitudes to 'real' utilitarian units, thought that insistence merely attests to their pre-capitalist habit of thinking. As we have seen earlier in this book, this reduction is impossible to achieve. But even if the conversion proved feasible, according to Veblin the capitalists couldn't care less. Under the price system, he pointed out:

men have come to the conviction that money values are more real and substantial than any of the material facts in this transitory world. So much so that the final purpose of any businesslike undertaking is always a sale, by which the seller comes in for the price of his goods; and when a person has sold his goods, and so becomes in effect a creditor by that much, he is said to have 'realized' his wealth, or to have 'realized' his holdings. In the business world the price of things is more substantial than the fact of things themselves.

              (Veblin, 1923: 88-89, emphasis added)



Another interesting sub-heading in this chapter is: Absentee ownership and strategic sabotage. We have seen the effects of that business aim, for instance, in the 'stick in the eye' tactics of MicroSoft and other corportions. To the extent they can damage the sales of their competitors and withhold needed technology from the market they can extract their price. Damage is the mechanism of 'pricing power'.  

I posted one diary based on Nitzan and Bichler's work: Systemic Fear and a Debt Jubilee and there are three articles available at B and N Archive that are specifically relavent:

Contours of Crisis: Plus ça change, plus c'est pareil?

Contours of Crisis II: Fiction and Reality

Contours of Crisis III: Systemic Fear and Forward-Looking Finance

I have found Nitzan and Bichler's post-Marxist analysis combined with Keen's post-Keynesian and the results of his dynamic analysis to be comprehendable and illuminating.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Feb 13th, 2010 at 04:28:10 PM EST
"neoclassical branch of political economy - is not an objective reality. In fact, for the most part it is not even a scientific inquiry into objective reality. Instead, neoclassical political economy is largely an ideology in the service of the powerful. It is the language in which the capitalist ruling class conceives and shapes society. Simultaneously, it is also the tool with which this class conceals its own power and the means with which it persuades others to accept that power"
by rootless2 on Sat Feb 13th, 2010 at 08:01:27 PM EST
[ Parent ]
And it is the chief means by which an evil spell has been cast over the minds of the US electorate. Breaking that spell is the biggest task ahead if we are to save ourselves from a looming social catastrophe.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Feb 13th, 2010 at 09:09:14 PM EST
[ Parent ]
And, what is the source of your quote?

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Feb 13th, 2010 at 09:26:27 PM EST
[ Parent ]
why the book you suggest.
by rootless2 on Sat Feb 13th, 2010 at 09:57:10 PM EST
[ Parent ]
It did sound familiar, but I certainly haven't memorized it! Thanks. How do you like it?

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 14th, 2010 at 01:12:58 AM EST
[ Parent ]
i just read chapter 1. seems interesting and basic premise is, I think, sensible, but i am a little put off by their self-promotion - although perhaps that is a good thing in a book about capital.

the point that there is no justification for the theoretical separation of government/economy taken for granted in most economic analysis is a good one.

by rootless2 on Sun Feb 14th, 2010 at 04:35:59 AM EST
[ Parent ]
This book is so far from the mainstream that if the authors do not promote it, and perhaps use it in some of their courses, it is unlikely to pay for the cost of the publishing run. I found it very informative and amazingly accessible, given the subject matter. Capital as Power provides both historical and theoretical perspective to most of the issues that one finds in the popular financial press and blogosphere and ties it together in a manner that makes sense to one such as I.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 14th, 2010 at 09:26:35 AM EST
[ Parent ]
Normally in those cases the authors do use it in their courses, and its likely also promoted on networks such as the Progressive Economists Network, as well as by word of mouth at the Marxian Economist's association meetings hiding in the belly of the beast at the annual "Association of Social Science Associations" meetings held by the American Economics Association.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Mon Feb 15th, 2010 at 02:49:45 PM EST
[ Parent ]
I would recommend it as an excellent introduction to many aspects of economics and as an overview of large parts of the history of economic thought, all rather interestingly integrated into and supporting a re-integration of politics and economics. It served to illuminate and provide perspective for a lot of material I have read over the last two years.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Feb 16th, 2010 at 02:27:56 PM EST
[ Parent ]
Economists insist on reducing 'nominal' business magnitudes to 'real' utilitarian units, thought that insistence merely attests to their pre-capitalist habit of thinking. As we have seen earlier in this book, this reduction is impossible to achieve.

And, in fact, Keynes addressed this in The General Theory and concluded that nominal quantities should be used.

That the units, in terms of which economists commonly work, are unsatisfactory can be illustrated by the concepts of the national dividend, the stock of real capital and the general price-level:
...

Thirdly, the well-known, but unavoidable, element of vagueness which admittedly attends the concept of the general price-level makes this term very unsatisfactory for the purposes of causal analysis, which ought to be exact.

Nevertheless these difficulties are rightly regarded as 'conundrums'. They are 'purely theoretical' in the sense that they never perplex, or indeed enter in any way into, business decisions and have no relevance to the causal sequence of economic events, which are clear-cut and determinate in spite of the quantitative indeterminacy of these concepts. It is natural, therefore, to conclude that they not only lack precision but are unnecessary. Obviously our quantitative analysis must be expressed without using any quantitatively vague expressions. And, indeed, as soon as one makes the attempt, it becomes clear, as I hope to show, that one can get on much better without them.

The fact that two incommensurable collections of miscellaneous objects cannot in themselves provide the material for quantitative analysis need not, of course, prevent us from making approximate statistical comparisons, depending on some broad element of judgement rather than of strict calculation, which may possess significance and validity within certain limits.

But the proper place for such things as net real output and the general level of prices lies within the field of historical and statistical description, and their purpose should be to satisfy historical or social curiosity, a purpose for which perfect precision--such as our causal analysis requires, whether or not our knowledge of the actual values of the relevant quantities is complete or exact--is neither usual nor necessary. To say that net output to-day is greater, but the price-level lower, than ten years ago or one year ago, is a proposition of a similar character to the statement that Queen Victoria was a better Queen but not a happier woman than Queen Elizabeth--a proposition not without meaning and not without interest, but unsuitable material for the differential calculus. Our precision will be a mock precision if we try to use such partly vague and non-quantitative concepts as the basis of our quantitative analysis.

-- John M. Keynes in The General Theory of Employment, Interest and Money



En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Sun Feb 14th, 2010 at 06:29:45 PM EST
[ Parent ]
Nitzan and Bichler devote chapters to the ridiculous situation of economic theories, Marxist and NCE, neither of which can account for prices. It is by bringing in Veblen's analysis of business vs. industry and the concept of strategic sabotage as a vital function of business and by directly engaging the issues of political power that they are able to bring clarity to the issue.

At least I can understand relationships now of which I had been only vaguely aware before, and I have no doubt that this understanding was obtained with far less aggrivation and annoyance than a similar level of understanding would have been obtained in business school, which I would never have attended.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 14th, 2010 at 07:17:14 PM EST
[ Parent ]
So the price of food matters, but not whether it is mud or mangoes?

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!
by A swedish kind of death on Mon Feb 15th, 2010 at 03:07:16 AM EST
[ Parent ]
In the first week after the earthquake in Haiti people were baking mud pies, adding oil, salt and water to dirt, and eating or selling them. Perhaps at least they made them feel like they had eaten something.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Feb 15th, 2010 at 11:49:09 AM EST
[ Parent ]
The price of the lowest grade of food matters. Just as the wages for unqualified labour matter.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Mon Feb 15th, 2010 at 02:42:36 PM EST
[ Parent ]
... absolute poverty line is insufficient income, cash or real, to obtain sufficient calories to stave off starvation. Somewhere in the vicinity of $1/day, PPP. AFAIR, the global population in absolute poverty is greater than the combined population of all core economies.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Mon Feb 15th, 2010 at 02:47:02 PM EST
[ Parent ]
How interesting you should choose this excerpt. This description problematizes analysis of business for purposes of regulatory agency among producers and consumers (i.e. sellers and buyers, respectively) and government trustees.

To begin with, readers cannot be reminded too often that "business" is an activity or process synomomous with  "trade" or "exchange" or "transaction" whose attributes entail formation of prevailing or customary valuation and agency techniques among its parties. The objective of business may or may not be profit --even in cultures which inculcate expectation of financial inequality by business participation and institute legal protection for particular methods of arbitrage.

Veblin here intimates "business" is a unit of organization --elsewhere and more frequently now termed a "firm"-- regardless of scale of operations or population size and characteristics. And that trope might be tenable if limited to comparative analyses of "businesses" established by people to realize "business" resources and market (again, an "exchange" or "business") in units of power, however analysts and analysands agree to measure "power."

Veblin also intimates, "industry" is a unit of organization but fails to explicate its constituents. That is, he doesn't admit either that industry is a categorical class of "businesses" or firms or that people affirmatively organized one or more classes of "businesses" to accomplish practical, predictable purposes, it should be said. Government trustees have long recognized that "industry," one or more organizations of businesses, form "combinations" (or "trusts" and putative "trade associations") in order to maximize profit from "business" by members' voluntary and involuntary  collusion among themselves.

From the excerpt:

According to Veblin, business differs from industry in both methods and goals.

Measurable qualitative and quantitative differences in outcomes of a "business" and an "industry" methods is only scale of operations. Combinations aggregate and concentrate measurement of businesses' "goals".

Business enterprise means investment for profit. It proceeds through purchase and sale toward the ulterior end of accumulated pecuniary wealth.

OK.

While industry is a manifestation of the 'instinct of workmanship', business is a matter of ownership and power;

This comment betrays Veblin's 18th-, 19th cen. or pre-industrial European and Anglo-American guild aesthetic and political dimensia. Industry is incapable of "instinct;" people express instincts.

whereas the former requires integration, cooperation and planning throughout society, the latter depends and thrives on conflict and antagonism among owners and between owners and the underlying population.

The reverse formulation is the more accurate depiction of "business" dynamics according to scale: a firm "requires integration, cooperation and planning throughout society"; an industry "depends and thrives on conflict and antagonism among [firm] owners and between [firm] owners and the underlying population."

Williamson earned his ignoble prize by detailing the economic instituions of capitalism or "transaction economics" of the firm, which he demonstrates are neither two-dimensional nor bi-lateral coordinating terms of a firm's resources allocation --human and automated labor, law, price, GAAP, material property, time, etc-- at any given point in time.


Diversity is the key to economic and political evolution.

by Cat on Mon Feb 15th, 2010 at 02:12:59 PM EST
[ Parent ]
Veblin here intimates "business" is a unit of organization --elsewhere and more frequently now termed a "firm"-- regardless of scale of operations or population size and characteristics. ...

Veblin also intimates, "industry" is a unit of organization but fails to explicate its constituents.

Actually, I think Veblen means both terms to refer to modes of activity. I shall find some quotes.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Mon Feb 15th, 2010 at 02:46:24 PM EST
[ Parent ]
Veblen's Theory of Business Enterprise starts with the following paragraphs:
The material framework of modern civilisztion is the industrial system, and the directing force which animates this system is business enterprise. To a greater extent than any other known phase of culture, modern Christendom takes its complexion from its economic organization. This modern economic organization is the "Capitalist System" or "Modern Industrial System", so called. Its characteristic features, and at the same time the forces by virtue of which it dominates modern culture, are the machine process and investment for profit.

The scope and method of modern industry are given by the machine. This may not seem to hold true for all industries, perhaps not for the greater part of industry as rated by the bulk of output or by the aggregate volume of labour expended. But it holds true to such an extent and in such a pervasive manner that a modern industrial community cannot go on except by the help of the accepted mechanical appliances and processes. The machine industries—those portions of the industrial system in which the machine process is paramount—are in a dominant position; they set the pace for the rest of the industrial system. In this sense the present is the age of the machine process. This dominance of the machine process in industry marks off the present industrial situation from all else of its kind.

In a like sense the present is the age of business enterprise. Not that all industrial activity is carried out by the rule of investment for profits, but an effective majority of the industrial forces are organized on that basis. There are many items of great volume and consequence that do not fall within the immediate scope of these business principles. The housewife's work, e.g., as well as some appreciable portion of the work on farms and in some handicrafts, can scarcely be classed as business enterprise. But those elements in the industrial world that take the initiative and exert a far-reaching coercive guidance in matters of industry go to their work with a view to profits on investment, and are guided by the principles and exigencies of business. The business man, especially the business man of wide and authoritative discretion, has become a controlling force in industry, because, through the mechanism of investments and markets, he controls the plants and processes, and these set the pace and determine the direction of movement for the rest. His control in those portions of the field that are not immediately under his hand is, no doubt, somewhat loose and uncertain; but in the long run his discretion is in great measure decisive even for outlying portions of the field, for he is the only large self-directing economic factor. His control of the motions of other men is not strict, for they are not under coercion from him except through the coercion exercised by his exigencies of the situation in which their lives are cast; but as near as it may be said of any human power in modern times, the large business man controls the exigencies of life under which the community lives. Hence, upon him and his fortunes centers the abiding interest of civilized mankind



En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Mon Feb 15th, 2010 at 03:09:12 PM EST
[ Parent ]
Well, I appreciate your effort. I'm not persuaded by this excerpt though of Veblin's analytic sophistication, considering the gauge of the modernist filter ("modern industry") through which he will squeeze a construct or model of "economic organization" at the century's turn that's wholly attibutable to acquisition and exploitation of technology. oh, the dawn of the technocracy.

"The machine industries--those portions of the industrial system in which the machine process is paramount--are in a dominant position; they set the pace for the rest of the industrial system."

Is this a polemic then about society and business devoid of human actors and institutional history? An ideology of the small and large business man euhemerized in literature as "elements" and "forces" of fauvist or futurist intensity beyond empirical report? Conveniently so it should appear to those people dispossessed.

Chapter 8, Business Principles in Law and Politics: Either Veblen did not quite grasp or refused to evaluate the indelibility of social rather than mechanical instruments employed by certain persons which are indispensible to "economic organization" of the "industrial system" as in the "mercantilist" or "dynastic" eras.

The "natural," conventional freedom of contract is sacred and inalienable. De facto freedom of choice is a matter about which the law and the courts are not competent to inquire. By force of the concatenation of industrial processes and the dependence of men's comfort or subsistence upon the orderly working of these processes, the exercise of the rights of ownership in the interests of business may traverse the de facto necessities of a group or class; it may even traverse the needs of the community at large, as, e.g., in the conceivable case of an advisedly instituted coal famine; but since these necessities, of comfort or of livelihood, cannot be formulated in terms of the natural freedom of contract, they can, in the nature of the case, give rise to no cognizable grievance and find no legal remedy.
    The discrepancy between law and fact in the matter of industrial freedom has had repeated illustration in the court decisions on disputes between bodies of workmen and their employers or owners. These decisions commonly fall out in favor of the employers or owners; that is to say, they go to uphold property rights and the rights of free contract. The courts have been somewhat broadly taken to task by a certain class of observers for alleged partiality to the owners' side in this class of litigation. It has also been pointed out by faultfinders that the higher courts decide, on the whole, more uniformly in favor of the employer-owner than the lower ones, and especially more so than the juries in those cases where juries have found occasion to pass on the law of the case. The like is true as regards suits for damages arising out of injuries sustained by workmen, and so involving the question of the employer's liability. Even a casual scrutiny of the decisions, however, will show that in most cases the decision of the court, whether on the merits of the case or on the constitutionality of the legal provisions involved,(7*) is well grounded on the metaphysical basis of natural liberty. That is to say in other words, the decisions will be found on the side of the maintenance of fundamental law and order, "law and order" having, of course, reference to the inalienable rights of ownership and contract. As should fairly be expected, the higher courts, who are presumably in more intimate touch with the principles of jurisprudence, being more arduously trained and more thoroughly grounded in the law at the same time that they have also presumably a larger endowment of legal acumen, - these higher courts speak more unequivocally for the metaphysical principles and apply them with a surer and firmer touch. In the view of these higher adepts of the law, free contract is so inalienable a natural right of man that not even a statutory enactment will enable a workman to forego its exercise and its responsibility. By metaphysical necessity its exercise attaches to the individual so indefeasibly that it cannotn constitutionally be delegated to collective action, whether legislative or corporate.(8*) This extreme consequence of the principle of natural liberty has at times aroused indignation in the vulgar; but their grasp of legal principles is at fault. The more closely the logical sequence is followed up, the more convincingly does the legitimacy of such a decision stand out.

[emphasis added]

What I find most tedious about reading antique tracts such as this is that these writers invariably avoid contemporaneous facts to illustrate their claims. Rather "Christendom" than the Whiskey Trust or Pullman or American Straw Board in 1904.

Diversity is the key to economic and political evolution.

by Cat on Mon Feb 15th, 2010 at 08:02:27 PM EST
[ Parent ]
Is this a polemic then about society and business devoid of human actors and institutional history

No, it is not.

On the other hand Veblen's style of argument is far from pellucid, and the anthropology and history on which he draws is that of the late 1800's.

What I find most tedious about reading antique tracts such as this is that these writers invariably avoid contemporaneous facts to illustrate their claims. Rather "Christendom" than the Whiskey Trust or Pullman or American Straw Board in 1904.

In that case you'd likely prefer Commons to Veblen.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Feb 15th, 2010 at 09:09:41 PM EST
[ Parent ]
"Commons" who or what, exactly?

Diversity is the key to economic and political evolution.
by Cat on Mon Feb 15th, 2010 at 09:54:04 PM EST
[ Parent ]
The economist, John R. Commons. See the AFEE Classic Books and Articles from written by Institutionalists page.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Mon Feb 15th, 2010 at 10:29:24 PM EST
[ Parent ]
Thank you for the bibliography :D

A sample, "The Preconceptions of Economic Science" (1899):

When this natural system of the Physiocratic speculation is looked at from the side of the psychology of the investigators, or from that of the logical premises employed, it is immediately recognised as essentially animistic. It runs consistently on animistic ground; but it is animism of a high grade, -- highly integrated and enlightened, but, after all, retaining very much of that primitive force and naivete which characterise the animistic explanations of phenomena in vogue among the untroubled barbarians. It is not the disjected animism of the vulgar, who see a willful propensity -- often a willful perversity -- in given objects or situations to work towards a given outcome, good or bad. It is not the gambler's haphazard sense of fortuitous necessity or the housewife's belief in lucky days, numbers or phases of the moon. The Physiocrat's animism rests on a broader outlook, and does not proceed by such an immediately impulsive imputation of propensity. The teleological element -- the element of propensity -- is conceived in a large way, unified and harmonised, as a comprehensive order of nature as a whole. But it vindicates its standing as a true animism by never becoming fatalistic and never being confused or confounded with the sequence of cause and effect. It has reached the last stage of integration and definition, beyond which the way lies downward from the high, quasi-spiritual ground of animism to the tamer levels of normality and causal uniformities...

This is not the place for research into the origin and the primitive phases of ownership, nor even for inquiry into the views of property current in the early days of the Western culture. But the views current on this head at present - the principles which guide men's thinking and roughly define the right limits of discretion in pecuniary matters - this common-sense apprehension of what are the proper limits, rights, and responsibilities of ownership, is an outgrowth of the traditions, experiences, and speculations of past generations.

Shorter Veblen: "The law exists to facilitate business." (my kid brother)
Even shorter Veblen: "Who dat?"

Usage fortified by law decides that when prices vary the variation is held to occur in the value of the vendible commodities, not in the value of the money unit, since money is the standard of value. There is, of course, no intention here to question the position, familiar to all economists, that fluctuations in the course of prices may as well be due to variation on the part of the money metals as to a variation on the part of the articles whose prices fluctuate. In so far as the distinction so made between variations in the one or the other member of a value ratio has a meaning - which it is not always clear that it has - it does not touch the argument. It is a matter of common notoriety, which has also had the benefit of reiterated statistical proof, that, as measured, for instance, in terms of livelihood or of labor, the value of money has varied incontinently throughout the course of history.

That's a pretty fascinating declaration, in light of four centuries of rey- and roi-chartered, marauding "businesses" in societies, where, specifically, gold was not a currency and slavery was not a factor of production, to the point of their trading partners' economic destruction by, say, 1899. Not to mention Lamoreaux to whom I'll admit benefit of hindsight and rigorous training in  presentation of "statistics" to which Veblen may not have had access, at the time.

[N]ew firms felt particularly threatened whenever revenues fell below total costs, and they had a strong incentive to cut prices in an attempt to increase sales, decrease losses, and pay off as much as possible of their fixed charges. Moreover, many new firms were underfinanced. Short of working capital, they desperately needed sales to say in business, and this need itself became an important stimulus for cutting prices. Thus, new rolling mills were major instigators of the price competition in tin plates in the mid-1890s. [The Great Merger Movement in American Business, 1895-1904]

Can't wait to read "The Barbarian Status of Women." The first sentence is so compelling, so epic:

It seems altogether probable that in the primitive groups of mankind, when the race first took to a systematic use of tools and so emerged upon the properly human plane of life, there was but the very slightest beginning of a system of status, with little of invidious distinction between classes and little of a corresponding division of employments.


Diversity is the key to economic and political evolution.
by Cat on Tue Feb 16th, 2010 at 10:31:09 AM EST
[ Parent ]
That's a pretty fascinating declaration, in light of four centuries of rey- and roi-chartered, marauding "businesses" in societies, where, specifically, gold was not a currency and slavery was not a factor of production, to the point of their trading partners' economic destruction by, say, 1899.

wrt:

Usage fortified by law decides that when prices vary the variation is held to occur in the value of the vendible commodities, not in the value of the money unit, since money is the standard of value.

That's of course entirely correct, at the time of writing.

There is, of course, no intention here to question the position, familiar to all economists, that fluctuations in the course of prices may as well be due to variation on the part of the money metals as to a variation on the part of the articles whose prices fluctuate.

If we assume that Veblen does indeed know what it is that he intends to question, there can be no objection to his stating what he does not intend to question.

Veblen is of course not saying that all money is based on gold, but of course writing in a period of an international gold standard, the question of fluctuations in value of the money metal versus fluctuations in value of the thing being bought by the money was a current issue, and the position he notes would of course have been familiar to economists of the day.

In so far as the distinction so made between variations in the one or the other member of a value ratio has a meaning - which it is not always clear that it has - it does not touch the argument.

The controversy on which side of a ratio is the responsible party for the change in the ratio, whether or not the question even makes sense, is not relevant to his argument. Only reading a paragraph on the scope of his argument, and not the argument itself, it is not possible to conclude whether Veblen is correct that it is not relevant to his argument, but there's no basis here for doubting that he is correct.

It is a matter of common notoriety, which has also had the benefit of reiterated statistical proof, that, as measured, for instance, in terms of livelihood or of labor, the value of money has varied incontinently throughout the course of history.

This is of course true. The value of money if measured in terms of subsistence or of an hour of labor is clearly not a constant.

So there is nothing at all inaccurate or objectionable in the passage, though it is written in a verbose and intricate style that says as precisely as possible what Veblen means to say, whereas today its far more common to bar the ordinary hoi polloi from entry into academic economic discourse by putting all the meaning into calculus manipulations and then lying in the plain text about what it means.

I tend to prefer the overly intricate telling of the truth to the lying in simpler language about the claims hidden behind not especially intricate mathematical manipulations.

On

Can't wait to read "The Barbarian Status of Women."

... given the manifold flaws in anthropological observations of the role of women even into the 1970's and 1980's, untangling the argument from the egregiously flawed observations of the late 1800's on which it is based is something I leave to the students of the history of anthropology and the aficianado's of Veblen.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Feb 16th, 2010 at 01:36:16 PM EST
[ Parent ]
Is this a polemic then about society and business devoid of human actors and institutional history?

Not at all. In fact, in my excerpt you will find

The business man, especially the business man of wide and authoritative discretion, has become a controlling force in industry, because, through the mechanism of investments and markets, he controls the plants and processes, and these set the pace and determine the direction of movement for the rest.
The book is all about 'captains of industry' (Veblen is too polite to say 'robber baron'). As to institutions, Veblen is one of the most important among the economics school called American Institutionalism.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Tue Feb 16th, 2010 at 02:15:19 AM EST
[ Parent ]
What I find most tedious about reading antique tracts such as this is that these writers invariably avoid contemporaneous facts to illustrate their claims.

Also not the case about Veblen, IMHO.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Tue Feb 16th, 2010 at 02:16:21 AM EST
[ Parent ]
To me, reading Veblen is about as enjoyable as reading pseudepigraphical texts in Greek or Die ptortestantische Ethik und der Geist des Kapitalismus without a Cassell's or General Psychological Theory or anything by Mill, perhaps less so than say Gompers and Bryan who certainly manipulated contemporary concepts of monetary theory to affect the "economic organization" of vulgar readers.

In other words, Veblen was a another ideologue whose literature in retrospect, and arguably contemporaneously, commands some academic interest in its own artifactual resiliance. He wrote about "the business man" in abstract as was fitting stylistically for a canonical foundation of sociology --Mythos and Discipline of Aggregate Morality-- to which he contributed, ambiguously, having established himself over the preceding decade of marked Victorian cultural hysteria as a kind of moderne, salon polymath, I suppose. He writes:

For a theoretical inquiry into the course of civilized life as it runs in the immediate present, therefore, aud as it is running into the proximate future, no single factor in the cultural situation has an importance equal to that of the business man and his work.
    This of course applies with peculiar force to an inquiry into the economic life of a modem community. In so far as the theorist aims to explain the specifically modern economic phenomena, his line of approach must be from the businessman's standpoint, since it is from that standpoint that the course of these phenomena is directed. A theory of the modern economic situation must be primarily a theory of business traffic, with its motives, aims, methods, and effects.

Tedious. Polemic. That should not be read without complementary historical documentation and empirical contents to furnish its axiomatic declarations, because the author reproduces none. And what is a theory that cannot be proved or falsified. A belief, typically catholic in its application.

Then again, I haven't read it all.

 

Diversity is the key to economic and political evolution.

by Cat on Tue Feb 16th, 2010 at 08:36:16 AM EST
[ Parent ]
Tedious. Polemic. That should not be read without complementary historical documentation and empirical contents to furnish its axiomatic declarations, because the author reproduces none.

There is one clear false statement suggestion here, that Veblen's sweeping claims are axiomatic claims, rather than empirical claims. They are, however, indeed empirical claims.

However, the rest is quite true, and someone who does not have the patience to abandon modern speed reading and slow down to a Victorian pace, probably should not read an entire book of Veblen's. Perhaps "Why Is Economics Not an Evolutionary Science".

And what is a theory that cannot be proved or falsified. A belief, typically catholic in its application.

This, however, requires the false minor premise, that his declarations are indeed axiomatic, rather than empirical claims. His theories can typically be either supported or falsified. Prose aside, that's one of the things that is a refreshing change from the majority of modern academic economics.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Feb 16th, 2010 at 01:51:44 PM EST
[ Parent ]
someone who does not have the patience to abandon modern speed reading and slow down to a Victorian pace, probably should not read an entire book of Veblen's

Or The General Theory, for that matter.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Tue Feb 16th, 2010 at 05:00:24 PM EST
[ Parent ]
Though like Commons and Mitchell, Keynes lays out his evidence and arguments in a far more straightforward manner than Veblen.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Tue Feb 16th, 2010 at 07:06:34 PM EST
[ Parent ]
Let's not forget Kuznets only invented national economic statistics in the 1920s...

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Thu Feb 18th, 2010 at 02:36:33 AM EST
[ Parent ]
And that Mitchell and Keynes were writing later, with an academic system in which it was already becoming impossible for a social scientist to be expected to have read all the most important works in all areas of social science ... which in Veblen's day was a by no means unreasonable expectation.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Thu Feb 18th, 2010 at 12:21:47 PM EST
[ Parent ]
Kuznets?

That's a silly premise, tanemount to a saying no human anywhere, at anytime has manipulated a fraction or probability theorem prior to 1925...

for purpose of discrete, situational planning
for purpose of construction or engineering planning, or
for purpose of public administration, including but not limited to, of military strategy, distribution of goods, census classification.

Let's forget that the other day, I refered to Lieutenant-General Charles-Pierre LeNoi, 1790...

Let's forget Finland, 1500 - the present,

Let's forget every classical, tax-collecting empire of Europa, Asia, and Africa, because everybody knows now, that the intellectual history of the world commenced from the Enlightenment. Of Anglo-Saxon universities.

lol

Statistik. If it ain't stamped National Ballpark Frank®, it just ain't precise.

Diversity is the key to economic and political evolution.

by Cat on Thu Feb 18th, 2010 at 12:22:13 PM EST
[ Parent ]
You're talking about making economic claims based on empirical data... Pretty much impossible before the 1920's...

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Thu Feb 18th, 2010 at 02:28:14 PM EST
[ Parent ]
Impossible?

I've given some citations to historical data collection.

Are you implying that an inference or forecast of "economic" objectives is impossible to calculate, because... what? People didn't know how to count or classify a population before the 1920s? Or because no one, prior to the 1920s, attempted to calculate  certainty to fifteen decimal places whether the weather and yield of the south 40 of the preceding ten seasons would in future adversely impact yield and demand, in general, for bread or, for that matter, guns?

Please explain.

Diversity is the key to economic and political evolution.

by Cat on Thu Feb 18th, 2010 at 03:05:17 PM EST
[ Parent ]
People didn't expend the resources to tally data on economic activity to the same extent.
Kuznets's life work was the collection and organization of the national income accounts of the United States (1934, 1941, and 1946). Kuznets was interested in statistical fact finding focusing specifically on seasonal fluctuations, secular movements, national income estimation, and economic growth. He computed national income back to 1869. He broke it down by industry, by final product, and by use. He also measured the distribution of income between rich and poor. Although Kuznets was not the first economist to try this, his work was so comprehensive and meticulous that it set the standard in the field.


En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Thu Feb 18th, 2010 at 05:10:28 PM EST
[ Parent ]
Also,
The NBER was founded in 1920. Its first staff economist and Director of Research was Wesley Mitchell. Simon Kuznets was working at the NBER when the U.S. government asked him to help organize a system of national accounts in 1930, which was the beginning of the official measurement of GDP and other related indices of economic activity. Due to its work on national accounts and business cycles, the NBER is well-known for providing start and end dates for recessions in the United States.
Also, the Bureau of Labor Statistics was founded in 1884.

If you want to look at times before these kinds of institutions were created you're doing more archaeology than econometrics.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Thu Feb 18th, 2010 at 05:14:48 PM EST
[ Parent ]
1884. hmm. 1884. yes. strikes, famine, barricades, illicit credit unions, these events do tend to bring a certain urgency to funding "institutional economic" policy and implementation.

Diversity is the key to economic and political evolution.
by Cat on Thu Feb 18th, 2010 at 07:30:08 PM EST
[ Parent ]
Oh, by the way, Veblen is clearly motivated by the experience of what is now called Long Depression, trying to explain how you can have 23 years of economic stagnation (from 1873 to 1896).

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Fri Feb 19th, 2010 at 03:24:44 AM EST
[ Parent ]
Clearly motivated to explain eh? Seems to me...

he sure glossed this dimension of Business Enterprise um characteristic of "The Cycle".

oh wait.

He discovers his opinion later, right?, during the run up to US intervention in the war to end all wars.

Diversity is the key to economic and political evolution.

by Cat on Fri Feb 19th, 2010 at 08:35:20 AM EST
[ Parent ]
What are you talking about?

Can you try to be less cryptic?

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Fri Feb 19th, 2010 at 08:38:45 AM EST
[ Parent ]
Periodicity. Periodicity is one characteristic of pattern. The other characteristic of pattern is a set of objects whose order of occurance define the start and end of one interval. Frequency of set repitition defines the periodicity of a pattern, if limited to some period of observation.

Period. Period is a length of time or limit imposed by an observer to a quantity of time units, for example, number of seconds, number of days, number of years, in order to differentiate sets of objects (events, facts, phenomena, whathaveyou) and document changes of disposition, if any, in the set scrutinized.

For example, asset valuation of a "business", denotes the set

BVAt: "book value" (subset) of assets at the end of a year t
NOPATt: net operating profit after tax for year
WAACt: weighted average cost of debt and equity capital

Conceit. Conceit is a dissociative (a word Veblen uses liberally) relationship to events, product of agency.

The graphic above represents a pattern of historical credit events. Dates identify prosecution of wars. Alternating bars represent periods of generalized "business" disorder. Bullets identify the establishment of "institutional economic" agencies of the US federal government whose purpose, some have argued, is to effect a "system" of "business" resource allocation.

You started it.

Diversity is the key to economic and political evolution.

by Cat on Fri Feb 19th, 2010 at 10:37:12 AM EST
[ Parent ]
I started what exactly?

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Fri Feb 19th, 2010 at 10:38:06 AM EST
[ Parent ]
Alternating periods suited to discussion of Veblenese putative innovation to "business" analysis.

Diversity is the key to economic and political evolution.
by Cat on Fri Feb 19th, 2010 at 10:43:14 AM EST
[ Parent ]
You forget the period of "not crisis" between the periods of "crisis".

Veblenese putative innovation

Oh, I am sorry, what should I have been reading instead?

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Fri Feb 19th, 2010 at 10:46:52 AM EST
[ Parent ]
I didn't "forget." I merely assume that everyone was capable of imputing periods "not crisis" that motherfucking NBER has established retrospectively as FACT according to metric parameters of national account  devised by Kuznets and regardless either of paranormal or material evidence to the contrary.

dammit.

I just toweled off.

now I must launder before my next zen bath.

Diversity is the key to economic and political evolution.

by Cat on Fri Feb 19th, 2010 at 02:14:11 PM EST
[ Parent ]
I've had enough of your expletives. Zen-bathe your tongue next.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Fri Feb 19th, 2010 at 07:50:14 PM EST
[ Parent ]
re: American "economic" polemicists, 1870-1914

You may take up systematically the bibliogaphies of Mssrs Philip Foner and Zinn. If that tuition is too onerous to you (pl.), begin with either Charles Macune, Henry Demarest Lloyd, William Coin, supplemented by William Jennings Bryan.

in original

Theories of Henry George have already, many times on this ET channel been glossed.

Diversity is the key to economic and political evolution.

by Cat on Fri Feb 19th, 2010 at 02:31:57 PM EST
[ Parent ]
dammit. I've worked so hard to forget this. now I need another zen bath.

Diversity is the key to economic and political evolution.
by Cat on Fri Feb 19th, 2010 at 10:39:37 AM EST
[ Parent ]
The time axis of your graph is not to scale and there's no period with bands spanning anywhere from 4 to 24 years...

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Fri Feb 19th, 2010 at 10:41:46 AM EST
[ Parent ]
It does NOT need to be to scale. THE PURPOSE is to illustrate, to dramatize, historicity of an IDEOLOGY
that
will
not
fucking
DIE

now i'm going to take my bath.

Diversity is the key to economic and political evolution.

by Cat on Fri Feb 19th, 2010 at 10:51:17 AM EST
[ Parent ]
I can make no sense of what you say.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Fri Feb 19th, 2010 at 10:56:20 AM EST
[ Parent ]
O RLY?.

If you're expecting me to present one mathematical expression of capitalist ideology, don't hold your breath.

Every one is written already excluding a definition for the variable, depravity.

Diversity is the key to economic and political evolution.

by Cat on Fri Feb 19th, 2010 at 02:59:29 PM EST
[ Parent ]
Cat:
I need another zen bath.

another one? how often do you need them?

lemme guess, it's a BUBBLE bath!

 cats hate water, usually, it must be interesting.

in my minds eye i see a rubber duck with alan watts' face, and jon stewart brand aroma salts, am i close?

"We can all be prosperous but we can't all be rich." Ian Welsh

by melo (melometa4(at)gmail.com) on Fri Feb 19th, 2010 at 11:21:35 AM EST
[ Parent ]
People didn't expend the resources to tally data on economic activity to the same extent

In other words, Kuznet had not yet been born. So US Congress had no plausible interest in funding a federal periodic survey of establishments' economic activity or compiling information collected by states' agents.

He computed national income back to 1869...

based of course on paranormal field interviews of US households and commercial establishment owners --since there was no tally-- as well as horizonal drilling techniques --Napoleonic expertise honed in the Lower Nile-- to salvage US Customs Service receipts. If the Congress had appropriate more money to continue this important work, Kuznet could have hired and trained an assistant in this remarkable computing techniques to estimate national income during the period 1868-1789, not to mention combined income of private and public enterprise throughout British America,1788-1624.

Although Kuznets was not the first economist to try this, his work was so comprehensive and meticulous that it set the standard in the field.

Well, then. Neatness counts!

Diversity is the key to economic and political evolution.

by Cat on Thu Feb 18th, 2010 at 07:20:52 PM EST
[ Parent ]
Then again, I haven't read it all.

Then again, that's what digests like my diary are for.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Tue Feb 16th, 2010 at 05:05:48 PM EST
[ Parent ]
mmmm, I regard these posts as prompts. I'm now reading the book now. So I better understand your summary of Veblenese financial hurdles and "industrial" behavior c. 1904 and your conviction, "If people [today?] reasoned about the credit economy like Veblen does, it would be curtailed politically very quickly."

got mad lurv for you and bruce both...

Diversity is the key to economic and political evolution.

by Cat on Tue Feb 16th, 2010 at 09:12:15 PM EST
[ Parent ]
Cat
From the excerpt:

Bear in mind that Veblin is only directly quoted once, in the short paragraph outlined in orange. The rest of the discussion of Veblin is Nitzan and Bichler's characterization of Veblin, which, none-the-less seems fair to Veblin.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Feb 16th, 2010 at 05:27:38 PM EST
[ Parent ]
I once wrote an article and submitted it in which I quoted heavily from Yngve Ramstad, and spelled his named "Ramsted" throughout. Oops. Mistyped it into the spellchecker when it first complained, and from there on out the typos was embedded.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Thu Feb 18th, 2010 at 12:24:14 PM EST
[ Parent ]
One of the worst features of spellcheckers is that they don't allow you to remove words from them.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Thu Feb 18th, 2010 at 02:38:17 PM EST
[ Parent ]
Cat: (re industry and business)
The reverse formulation is the more accurate depiction of "business" dynamics according to scale

My sense is that he was describing the conditions in an individual industrial enterprise and making an analytical distinction that was indeed more appropriate before the last two decades of the 19th century. When an entrepreneur and inventor develops a totally new process or product, such as Land and Polaroid or Xerox and the copier, for a brief interlude the industrial aspects may predominate. But even then someone in the organization had better be "taking care of business" or the enterprise will be driven "out of business" shortly after the patent expires, and patents themselves are business advantages originally designed to favor invention by granting a monopoly of short duration. Within a firm it would be the division between engineering and production, on the side of industry, vs. marketing and sales and finance, on the side of business. The CEO can come from either area or have a background in both.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Feb 17th, 2010 at 04:04:34 PM EST
[ Parent ]
I began a reply to your earlier comment, two days ago, that's developing into an essay. I've got some research to do to substantiate its thesis.

Having said this, rest assured I hadn't confused the contents of Nitzan's and Bichler's critique (excerpted) with that of the Veblen citation. Moreover, what impressed has impressed me most deeply about interpretations of Veblen's literature --social commentary, quantitative observation(s), philosophical tenets-- is NOT the novelty of the taxonomy he employs. It's readers' willingness to construct rather than deconstruct the situational environment --language, institutional facts, political events, technology, putative mores--  that validates a crucial historical assumption of Veblenese theory. Progress. The concept of progress, or "civilized" society (human enterprise sine qua non) graduation or transformation over time, articulated rhetorically as if from one totalized state of perfection to the next. In several ways, this tendency in the surviving literature, produced by civilization's arbiters, obscures the very poignant realization that so-called successful institutions do not change over time, because of or inspite of political (agency) iniquity their practices foment through society of people. Or because of or inspite of universal acquisition of a particular technology (tool), for example, credit, which is timeless.

So. Arbiters have adapted diction to suit generational tastes of "dynastic" classes to "management" classes. lol... One could compare Veblen, vanguard of class mores, as easily to Henry James (scathing) as to Marx (dry) as to Plato (terminal).

My sense is that he was describing the conditions in an individual industrial enterprise and making an analytical distinction that was indeed more appropriate before the last two decades of the 19th century.

I think I understand what you write and agree to the extent that specified scale or granularity of information is a helpful constraint on the scope of analysis. Following from this concern is, how does one describe the actual characteristics of fin de siècle structural economy? As always, populated by the impoverished greater eighty, we shall see...


Diversity is the key to economic and political evolution.

by Cat on Thu Feb 18th, 2010 at 02:09:49 PM EST
[ Parent ]
The Idea of Progress ruled the mental lives of much of the world until its (fairly) recent deconstruction and death. :-)  I believed that we were on a path of improvement until somewhere between 1973-1980. But then I became too distracted as an engineer and as a husband and father to keep track of much of anything but my own personal affairs.

Having a 401K to which my employer made contributions got me reading Barron's again in the '80s. From there I continued my slow self education in economics but could no longer believe that the word "progress" had much relevance to anything I saw in the USA.  In the mid '90s I became aware of historiographical works deconstructing The Idea of Progress and of the post-modern critique and of the post-modern deconstruction, etc. and realized that that had been my naive orientation in grad school and one of the reasons I had not fit in to early '60 academia, as well as why I found Thomas Khun so exciting.

But I think your observation about the static institutional nature of organizations has some validity. If change is truly desired, it it often easier to start a new organization than to attempt to change an old one. As I recall this was one argument behind the push back in the '90s to provide "sunset" clauses in enabling acts. One argument.

I was aware of Veblen from grad school, largely on account of his Theory of the Leisure Class and his The Higher Learning In America but also because of his hilarious characterization of Christan Denominations as retail outlets for the franchise product. The more I learn of him the more I am impressed with what he saw and accomplished for his time. He died in 1929, after all, thirteen years before I was born. But he had many foundational insights.

Perhaps in Business School it is out with the old and in with the new, and certainly in academic economics there has been a downgrading of the importance of the history of economic thought, but anthropology, sociology and history take them seriously, on the quaint notion that it helps to know from whence we came to provide context to where we find ourselves.

 

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Feb 18th, 2010 at 10:53:48 PM EST
[ Parent ]
... Commercial Capitalism, Entrepreneurial Capitalism, and Managerial Capitalism, the second following Schumpeter and the third following J.K. Galbraith.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Sun Feb 14th, 2010 at 07:58:18 PM EST
Economy 1.0 (past)

  • barter economy;

  • no money;

  • physical market presence;

  • decentralised, but disconnected.

Economy 2.0 (now)

  • money economy;

  • money is an object, initially a physical object eg coins; now an accounting credit object;

  • market presence through intermediaries;

  • centralised and connected.

Economy 3.0 (emerging rapidly)

  • networked 'Peer to Peer' economy;

  • money is a relationship, incorporating: currencies (objects of money's worth); a Value Standard/ Unit of measure; credit aka time to pay; and a framework of trust;

  • networked market presence;

  • decentralised, but connected.


"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Mon Feb 15th, 2010 at 05:31:56 AM EST
[ Parent ]
... all of European history from sometime before 1500 to the present is in "Economy 2.0 (now)", and "Economy 2.0 (now)" extends quite a number of millenia in the past in some places. Given the substantial differences in that many thousands of years, it makes sense to subdivide it.

Commercial, Entrepreneurial and Managerial Capitalism are three of those subdivisions.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Feb 15th, 2010 at 02:44:29 PM EST
[ Parent ]
... New South Wales, is good on this. This is from his consideration of the supposed IMF reconsideration of their macro policy stance, when he latches onto the absurdities of modern Ricardian equivalence:
Even ignoring the fact that the description of a government raising taxes to pay back a deficit is nonsensical when applied to a fiat currency issuing government like exist in most countries now, the RE models required several assumptions to hold for the conclusions to be made.

Should any of these assumptions not hold (at any point in time), then his model cannot generate his conclusions and any assertions one might make based on this work are groundless - meagre ideological raving.

First, individuals are claimed to be able assess the total stream of income and taxes over their entire lifetime in making consumption decisions in each period.

Second, capital markets have to be "perfect" which means that any household can borrow or save as much as they require at all times at a fixed rate which is the same for all households/individuals at any particular date. So totally equal access to finance for all.

Third, the future time path of government spending is known and fixed. Households/individuals know this with perfect foresight.

Fourth, there is infinite concern for the future generations. This point is crucial because even in the mainstream model there is no optimal prediction about when the debt will be repaid and so the tax rises might come at some very distant time (even next century).

As I am sure you will appreciate none of these assumptions is remotely true in the real world. We do not have perfect knowledge of all these developments. For example, many households have liquidity constraints and cannot borrow or invest whatever and whenever they desire. Further, if the future path of government spending was known why are all the deficit terrorists calling for a "credible exit plan" - they should know it already. Finally, our conduct towards the natural environment is not suggestive of a particular concern for the future generations other than our children and their children.

But the theory doesn't even stack up in empirical terms. For example, Barro's sycophants all predicted that consumption would not rise after the US Congress gave out large tax cuts in August 1981. Why? They all said that saving would rise to "pay for the future tax burden". The data shows that personal saving rate fell between 1982-84. There has never been a successful empirical application of the theory.




I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Sun Feb 14th, 2010 at 09:30:12 PM EST
I strongly recommend reading Douglas Rushkoff's Life Inc.

There's a very lucid explanation of the origins of corporate culture and how its roots are essentially feudal. In short, monarchs created corporations to run as explicit monopolies for their own personal benefit, offering an opportunity for other investors to enjoy that monopoly in return for financial support and profit sharing with the monarchy.

The model assumes that there are people who own things, and there are people who work for people who own things. It's inherently undemocratic.

The key point is that all accounting and reporting methods take this assumption as a given.

This is why it's possible for a factory to be idle even if resources are available, workers are available and markets are available - if there's no royal assent from 'the markets' (i.e the feudal decision makers) because the project isn't profitable enough for them, then the factory does nothing.

So I don't agree with Veblen. I think the distinction between the credit economy and the industrial economy is true as far as it goes, but largely tangential.

Firstly, you cannot have a credit economy without an industrial economy underpinning it. The credit economy can be locally abstracted, but it can't be completely abstracted. Someone somewhere still needs to be making and selling real stuff for credit to have any meaning.

Secondly, both credit and industrial economies rely on the same feudal model, where 'royal' assent for projects is granted on the basis of expected profitability, and not for any other reason. (The common good, long term investment for future generations, fun, play and exploration, and so on.)

The model only loses its influence when democratic governments start co-opting feudal decision-making for more sophisticated ends.

This is why the feudalists hate socialism, and truly democratic governments. Firstly, governments take their money. Secondly, democratic governments make political decisions that neuter their monopoly on power and influence. Thirdly, bubbles are typically seen as a feature in feudal economics, not a bug. If you own and manage the bubble, there's no better way to increase your power and influence.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Feb 15th, 2010 at 08:05:56 AM EST
Firstly, you cannot have a credit economy without an industrial economy underpinning it. The credit economy can be locally abstracted, but it can't be completely abstracted. Someone somewhere still needs to be making and selling real stuff for credit to have any meaning.

As we're about to find out the hard way...

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Mon Feb 15th, 2010 at 03:54:16 PM EST
[ Parent ]
ThatBritGuy:
Firstly, you cannot have a credit economy without an industrial economy underpinning it. The credit economy can be locally abstracted, but it can't be completely abstracted. Someone somewhere still needs to be making and selling real stuff for credit to have any meaning.

I think we need to distinguish here between the credit (which I see as essentially backed by labour and knowledge) that enables goods and services to circulate - where your statement is accurate - and the credit associated with the use value of productive assets, particularly land.

The reason for periodic cycles of booms and busts has for thousands of years been the toxic combination of compounding interest on debt, and private property in land, which invariably leads to unsustainable concentration of wealth. The current cycle is no different - just cosmically bigger than anything before it.

Unsustainable debt in an agricultural economy  - and the debt slavery to which it led - was originally dealt with historically through Jubilees, and more recently through cyclical economic booms and busts. Fred Harrison, who bases his analysis on land price cycles, presciently explained in August 2005 about 18 year cycles and dated the next iteration in 2008, followed by a global depression in 2010.

I think that one of the biggest failures of modern economics - due to its purely ideological assumptions - is to fail to distinguish between:

(a) 'Static' Credit - embedded in productive assets, through the protocols of equity and secured debt - which inflates asset prices; and

(b) 'Dynamic' Credit - which is lent or spent into circulation by banks or government, and which leads to retail price inflation.

In both cases the 'profit motive' drives inflation.

As I have often pointed out, there is no need for credit intermediaries (indeed, there never has been). Within the correct partnership-based architecture the credit necessary for circulation of goods and services, and the credit necessary for long term financing of productive assets may in fact be provided directly, - the former by trade sellers and the latter by investors - thereby dis-intermediating banks.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Feb 15th, 2010 at 05:24:58 PM EST
[ Parent ]
Have you written about the Static-Dynamic split in more detail? I've been trying to write a diary about inflation and I think you have the makings of a key insight there...
by Metatone (metatone [a|t] gmail (dot) com) on Tue Feb 16th, 2010 at 05:49:34 PM EST
[ Parent ]
A few years ago I wrote this paper Knowledge-based Value and Intellectual Property which covers it.

"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Tue Feb 16th, 2010 at 07:27:20 PM EST
[ Parent ]
Yeah, I check in once in a while. Anyway, just a little reminder than Jonathon Larson has done a lot of work on Veblen, and recast Veblen's leisure class as the predator class, in eternal combat with the producer class. His new website is http://real-economics.blogspot.com/. His original 1992 book, Elegant Technology: Economic Prosperity from an Environmental Blueprint, is still available in its entirety online, here: http://elegant-technology.com/index.html
by NBBooks on Mon Feb 15th, 2010 at 06:05:31 PM EST
Our old friend Techno!

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Feb 17th, 2010 at 04:15:15 PM EST
[ Parent ]
From a social perspective, it is scandalous that banks get their fairytale profits for... nothing. Just think about it: If a bank borrows you a million dollars, it does not mean that the bank set aside a million dollars for you. No, it still has the same obligations to its depositors and investors; it "merely" accepted an extra short-time obligation of million dollars, in exchange for your long term obligation. The million of dollars was created literally out of thin air - that is understood from time to time. The banking beauty is that when you return your loan, the bank gets a "real" million of dollars from you (albeit just as "fake" the loaned), plus the interest. Bank's profit is not only the interest excess, but all loans that get returned in their entirety (or not entirety)!

Little wonder that when you walk now in towns of Eastern Europe or anywhere else, the best buildings that had been post-offices, book stores or cultural landmarks are now ominously housed by banks. You have to go to outskirts or cramped buildings for basic services now. A bank loan might be good a good contract for both participating sides - but basically not for the public interest side, if only because the new-made money adds to the inflation pressure. More often than not, the banks are the only winners. People are forced to work harder, resources depleted faster - while banks get the easy and even respected life.

by das monde on Tue Feb 16th, 2010 at 10:59:46 PM EST
You share probably  the second most common misconception in relation to banking, the most common being that banks take in deposits and lend them out again.

When bank credit (= money in our current system) created as interest-bearing loans is repaid then that credit is essentially cancelled, and the money destroyed.

From the interest received, banks pay interest to depositors; operating costs; and dividends to the investors who provide the capital they need not only to cover capital expenditure, but also as the 'regulatory capital' (set by the Bank of International Settlements in Basel) which acts as a proprietary guarantee fund against defaults by borrowers.

In addition to the income banks receive from the net interest margin (which is as high as they can get away with) between the interest received from borrowers and that paid to depositors, banks as credit intermediaries also levy as many charges upon depositors and borrowers as they can get away with.

As a result, banks are typically very profitable, unless and until their default experience reaches unacceptable levels, as now. Because they create credit as a multiple of their capital base, this 'gearing' means a small percentage of losses can in fact wipe out their capital.


"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Wed Feb 17th, 2010 at 05:41:32 AM EST
[ Parent ]
I am glad enough to get pass the first most common misconception :-)

You are right from the long term perspective. Eventually, the loan money gets "canceled", and it is the interest money that causes peculiar problem. In total, people have to return more money that it was ever "created".

But we are talking about Credit Bubbles here - a kind of dynamic but evidently unsustainable process. While the economy is expanding, and credit volumes as well, banks not only get away with charging "non-existent" interest money, but they capture most of the expanding monetary volume. The credit expansion can last more than a generation, and while it lasts, banks essentially do get all debt payment as profit.

Consider the situation: Alice owns some Continental Bank a million of dollars. She sells to Bob her apartment in London exactly for that million of dollars, and returns the loan. Bob borrows from the same Continental Bank that million of dollars to buy the apartment. That million of dollars, the new money, ends up in the Continental Bank as a pure profit, plus the bank still has ongoing credit claim shifted from Alice to Bob. Convenient, gee?

The situation is a little different if Alice sells the apartment to Bob, but she does not return the loan but deposits the money to the Continental Bank. Then that million of dollars adds to the "regulatory capital" rather than to the profit, right?

The bottom line is: the banks do get easy income and free lunches in the expansionary phase, while you have to work for rather less money. And when a crisis hits... you have to work even harder to return your loans, while banks get bailouts. They actually continue to squeeze debt payments while doing nothing useful. And even if some bakers go bust, their life won't get worse than yours in all likelihood.

by das monde on Wed Feb 17th, 2010 at 10:14:20 PM EST
[ Parent ]
das monde:
Consider the situation: Alice owns some Continental Bank a million of dollars. She sells to Bob her apartment in London exactly for that million of dollars, and returns the loan. Bob borrows from the same Continental Bank that million of dollars to buy the apartment. That million of dollars, the new money, ends up in the Continental Bank as a pure profit, plus the bank still has ongoing credit claim shifted from Alice to Bob. Convenient, gee?

That's not how it works, DM.

The bank creates a new loan to Bob - $1m of fresh new money - which is instantaneously credited to Bob as a deposit.

When Bob buys the apartment from Alice, his account is then debited, and Alice's account is credited, thereby cancelling the initial $1m credit = money she received and repaying her interest-bearing loan.

Repayment of loans destroys money.

What is still hanging around the system is the (say) $10,000 interest charged to Alice. This money was credited to the accounts of depositors (say $3,000) as interest earned; to the accounts of the bank's staff and other service providers (say $4,000); to the shareholder P&L reserve accounts held by the bank ($2,000), which bumps up their capital enabling more loans; and to shareholders accounts as dividends ($1,000).

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Thu Feb 18th, 2010 at 08:24:04 AM EST
[ Parent ]
Hmm. First,  I claim that you are behind with this misconception.

What is still hanging around the system is the (say) $10,000 interest charged to Alice.

The interested money was charged to Alice, but neither Alice nor anyone else had created it into existence. The fact that Alice succeeded in paying her debt with all interest only means that there is less money to pay all existing debts in the circulation. The interest money she paid is the money created by some other loans - and the interest money subtracts from the available money volume. The money that is "hanging around" among banks' depositors, staff and shareholders is the money that Alice scrambled up to pay off her debt. (In this scenario, by selling her apartment.)

And the fate of the new loan is very simple. Before the transaction, the bank had only claim on Alice's debt. After the transaction, the bank has claim on Bob's debt (in the same amount) PLUS a million of dollars! You are right that the same amount of money was canceled in the system, so the monetary volume did not change. But that only adds an insult to injury: the bank got a million of dollars, and the missing million is shared by the rest of the society.

by das monde on Thu Feb 18th, 2010 at 08:37:38 PM EST
[ Parent ]
Firstly, by the time the loan was repaid, Alice would have not only been charged, but would also have paid, the interest. I grant you that this in turn means that the money necessary for her to pay the interest must have been created in the banking system, and she must have acquired it.

Secondly, it is not just when it creates loans that a bank creates credit = money, but also when it writes cheques to/ credits the accounts of its staff, suppliers, and of course its shareholders, in respect of their dividends.

This reality of the banking system - that they also create credit when spending, as opposed to lending - is not widely realised even among the relative few who understand that banks create credit.

The fact of the matter is that the value actually provided by banks is the provision of a framework of trust - aka an implicit guarantee - in respect of the credit of borrowers. The true source of credit - at least insofar as unsecured credit is concerned - is the individual or enterprise (grouping of individuals) themselves.

So what a bank is in effect doing is guaranteeing and pooling the IOUs/credits issued by buyers or borrowers so that they are acceptable to sellers or lenders. It backs this guarantee with a pool of capital the amount of which is set by the Bank of International Settlements in Basel.

The 'interest' which we are accustomed to paying to banks for this function covers the following elements:

(a) interest they in turn pay to depositors;

(b) system/operating costs;

(c) the costs of defaults;

(d) a dividend payment to those who provide the capital which backs the banks' implicit guarantee.

There is a crucial distinction to be made between secured and unsecured credit which is unappreciated,I think. Secured credit is backed not just by the individual's 'labour value', but also by the use value (eg land rental value)of the productive asset against which the credit is secured.

There is in fact no need for depositors in order for liquidity - ie the dynamic credit necessary for the circulation of goods and services and the creation of productive assets - to be made available. But the static credit embedded in productive assets such as land will in fact require an 'investor' one way (the equity claim of landlords and shareholders) or another (the debt claim of a depositor).

In a nutshell, I think you will find that the amount of money=credit created by banks does not constitute a pure profit for the bank. What this credit does do is to allow enterprises generally to monetise the profits or surpluses which they charge in excess of cost.

The demand for 'profit' in excess of costs is - both by definition and accounting identity - a direct cause of inflation, and the deficit-based credit system merely facilitates it. The combination of 'For Profit' enterprises, and deficit-based money, is directly and completely the principal cause of inflation. This combination of Equity and Debt claims over wealth which together comprise 'finance capital' are inflationary wherever productive assets over which they are exercised are finite.


"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Fri Feb 19th, 2010 at 08:53:45 AM EST
[ Parent ]
... a flow. Increasing velocity increases the ability of a given money stock to be used to meet total interest obligations in an economy in a period.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Thu Feb 18th, 2010 at 12:42:26 PM EST
[ Parent ]
I read it. I dug out of the LSE bullshit about 4am this morning. c + c/n)/t > c/t. DCF modeling. I was tempted to stop there. Miguel. chapter 6. motherfucking Morgan and Carnegie. WAAC chapter 9.

I need a zen bath now.

Bruce.

why you do me like that...

Diversity is the key to economic and political evolution.

by Cat on Wed Feb 17th, 2010 at 09:40:15 AM EST


Display:
Go to: [ European Tribune Homepage : Top of page : Top of comments ]