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Deliberately limiting volatility by adding time and/or volume constraints to trading isn't a new idea. (Even I've thought of it, and I'm not an economist.)

Keynes is right of course - what we have now isn't investment, it's gambling.

But there are two problems. One is obvious, and political - the people who benefit from the current system won't be happy about having it changed. And the change would have to be international, which might be a little tricky to organise.

The other problem is that once you start trading ever more abstract instruments, the idea of 'shares' becomes less relevant. So you'd have to limit, or at least manage, or possibly eliminate derivatives and other more obscure kinds of financial dealings - at least for certain kinds of trading.

The basic question that Keynes doesn't answer - perhaps he does elsewhere - is who is economics for?

The answer today would be 'corporations' - which is why it's taken as axiomatic that 'reform is good.' There's lip service paid to nonsense ideas like trickle-down. And most people seem to have realised by now that it's just self-serving nonsense.

The answer thirty or forty years ago would have had a much more populist and socially responsible slant.

If you can't agree on what you're trying to achieve politically and economically, there's little point arguing about theories, means and ends.

And economics is in a laughable state today because no one officially and explicitly tackles the question of who economics is supposed to be for.

Instead, most statements come with an implied populist or (more often) corporatist bias.

Those biases are currently in conflict, by definition. It's impossible for economics that benefits one group to make rational sense in terms the other group can understand.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun Sep 10th, 2006 at 05:37:21 PM EST
In your populist v. corporatist dichotomy, Keynes reads definitely populist. He's always talking about the "social purpose" of things.

Nothing is 'mere'. — Richard P. Feynman
by Migeru (migeru at eurotrib dot com) on Sun Sep 10th, 2006 at 05:40:51 PM EST
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