As usual, your economic analysis is riddled with sophistries and egregious examples of economic illiteracy.You often repeat the flawed and long debunked labor theory of value. Economists, dating from the late 19th century, have thrown-out that myth and have replaced it with the subjective theory of value. This theory states, that value is not inherent in the object itself, but the human mind. Value exists in an object because we, as free-thinking human beings, think something is valuable. The good thing about this theory is that what one person thinks is valuable, someone else may not think is valuable. This wonderfully reflects human autonomy. For example, if you made 2 t-shirts that were made with the same material, were the same size and had the same ink, and took exactly the same amount of time to create, you would rightly say that the same amount of labor was put into them. However, the value of the shirts would be different if one had a face of Hitler and the other had a face of Gandhi. The mere fact that Gandhi as a subject on a shirt is more desirable (to most if not all), means it has a higher value. You could sell the Gandhi t-shirt for much more than the Hitler shirt (if you could even get rid of it at all). Your second example of economic illiteracy is your claim that demand "is what makes an economy work." Although I agree with your assessment that the simplistic argument "the rich create jobs, don't tax 'em" does little to enlighten us and is a flawed argument itself, it is based on a principle that is not wrong. The reasoning you use to try to debunk it is filled with logical fallacies. Let us start with the obvious: Jean-Baptiste Say in 1803 said this: "It is worthwhile to remark that a product is no sooner created than it, from that instant, affords a market for other products to the full extent of its own value. When the producer has put the finishing hand to his product, he is most anxious to sell it immediately, lest its value should diminish in his hands. Nor is he less anxious to dispose of the money he may get for it; for the value of money is also perishable. But the only way of getting rid of money is in the purchase of some product or other. Thus the mere circumstance of creation of one product immediately opens a vent for other products." or as he stated, simply: "products are paid for with products" Demand itself does not create anything. It is the creation of products from which we derive demand. People create, work and invent in order to make their lives better. Peoples' demand is derived from their creations and the creations of others. People work and create, and with the product of their labor, demand the products of others' labor. We only have the power to demand if we have created something beforehand. Say, we used your logic of “demand is what makes the economy work” as the framework to fix the economy. We decided that demand is most important and money in the hands of all people is what is most desirable because people spending money is the key to economic growth! Say then we pay half of all people 20 dollars an hour to dig holes and the other half 20 dollars an hour to fill holes. Everyone would have money to spend, be employed, and according to your logic, have demand. Except there is nothing buy! People can demand things: "I want food! I want housing!" but there is none of that! But according to you the economy is fixed, people have money, people have demand. If you disagree with any of this by saying we need to build and make things that are useful, you have already conceded that your logic is flawed and supply does matter. Other economic principles you chose to ignore or have no clue of their significance are the role of incentives, the role of profits, and competition to name a few. I suggest you take a break from your nearly childish economic analysis and brush up on some simple economic theory. Then I will take you more seriously when you talk about capitalism or economics in general.
Very brave of you to post anonymously.The Keynesian argument that we should hire half the unemployed to dig holes and the other half to fill them is not wrong, and it got us out of the Great Depression.This video is not longer than 5 minutes. I could do a two hour video and cover every aspect of economics, but the only thing I am doing here is tackling the simplistic idea that "the rich are job creators and therefore cannot be taxed."Which is bullshit for the reasons stated in the video, and for other reasons as well.Economics is complex. This short video is not.
You have no clue what you are talking about. Keynesian economics did not get us out of the Great Depression. How is that Keynesian economics and FDR got us out of the Great Depression when we had double digit unemployment and a terrible economy all the way through the 30's? Huh? The unemployment rate started to go down slightly for like the first 4 years of FDR's presidency and hit a bottom of around 14% and then shot up back to 19% in the late 30's. How is that getting us out of the depression? Let me guess. The usual Keynesian response. We didnt spend enough? Right? That's the only response Keynesians have when they cant explain their failed methods, or are you going to give me the whole WWII got us out of the depression? Unemployment did drop at the beginning of the war. It is very easy to accomplish such unemployment numbers when HALF YOUR POPULATION IS SENT OVERSEAS TO FIGHT A WAR! And yes, our GDP did go up during the war. It's easy to accomplish this when you have government using the entire economy to produce TANKS AND BOMBS. But can you honesty tell me having a civilization producing weapons and items that destroy is beneficial in any way? No. We did not get out of the Great Depression until after WWII. After the war, government cut spending drastically and we had an entire work force now available ready to work and had numerous factories available just sitting by idle because no more weapons and bombs were needed. The free market kicked in and we ended up having one of the biggest economic booms in American history. It also sure helped that half the world was in ruins from the war, leaving way less competition. We also had the worlds largest gold supply on hand. Gold is this precious metal (real money) that backed the dollar. This is how the dollar became widely excepted at the world's reserve currency, because the dollar was as good as gold. Free markets and sound money got us out fo the Great Depression. Not Keynesian economics. Keynesian economics is what made the depression GREAT.-Kurt
Wait-- you are saying that we couldn't get out of the Great Depression until half the population was employed by the government!!! You are arguing for Keynesian economics!You're saying that it was the government employing everybody and paying them a decent salary that got us out of the depression.War is government spending. And according to you, it ended the great depression. Yet government spending can't fix anything? How do you manage to hold ideas that are in such direct opposition at the same time? You expect people to take you seriously, and you poo-poo on others, saying that they "don't understand economics."Saying that somebody "doesn't understand economics" because they don't advocate the same free-market religious bullshit that you do is a solipsistic argument. Your problem is that you have a superb understanding of a thoroughly flawed economic philosophy.
I love your blog. You don't hear nearly as many people actually making sense and stating the obvious. I'd love to add you to my blogroll if that's alright by you. My blog has plenty of political and social issues, but also focuses on literature and music.
Cody-- you don't need to ask my permission to add me to your blogroll! Please do! I'm checking out your blog right now.
Fair enough. I suppose I'd just like to know on whose blogroll my own blog appears hahaPlease feel free to leave a comment. I don't get nearly enough of those. Keep up the great blog.Cheers.
As usual you have not let me down. Anonymous sounds so educated...brain up his arse? It is truly a delight how you point out that he won your argument for you.Keep it up Punk!P.S. Thanks for the shirt. I will be wearing it in D.C. on October 6th in Freedom Plaza!