“gold-mining is the only pretext for digging holes in the ground which has recommended itself to bankers as sound finance” – JM Keynes, 1936

33 Responses

  1. Warren, I say this as someone who had respect for you, please read The General Theory and particularly chapters 19 – 24. Also it would be helpful to read Pigou (1933). Disregard PK teaching and interpretation of Keynes which is distorted at best, dishonest at worst. You should expect PK replies now coming in parroting Samuelson and Brady in order to save face and project the appearance that they knew all along but we both know that would be yet another PK fabrication. Please do the right thing.

  2. ” which has recommended itself ”

    I think Keynes was spot on here. It looks like this stuff (the 3 elements in column 11 of the Periodic Table of the Elements) can at least in effect if not literally “talk” to these people and seduce them… rsp,

  3. @Marcos – for all the flies on the wall here… what specifically should we be thinking about when reading chapters 19-24…? …And what have I missed in relation to PK?!?!?

    1. @Adam1, google “michael emmett brady”.

      It has something to do how all “Keynesians” including PKers, which MMT has a relationship to, misinterpreted Keynes, especially those chapters.

    2. @Adam1, PK is inconsistent with Keynes’s theory of effective demand, uncertainty in decision making, logic and probability, fiscal policy proposals, and its math is incorrect. These are all provable simply by reading Keynes, something Warren has admitted he’s never done. MMT takes all the bad things about PK and worsens them.

      1. @WARREN MOSLER, Warren, you’ll have to do the work yourself on this one but it’s not difficult to arrive to. I suggest you do it yourself because you clearly seem smarter than the economists you’ve been working with. Also recommend the Collected Writings of John Maynard Keynes volumes 13, 14, and 27.

      2. When anybody comes to the door pushing some sort of ‘good book’ written in the distant past, I generally smile sweetly and tell them ‘not today thank you’.

      3. @WARREN MOSLER, I expect you to do nothing aside from prolonging this PK/MMT illusion. Neil has already displayed his lack of utter lack of and opinion towards scholarship. Warren, despite what you may believe, Keynes was far, far, far more intelligent and prescient than you ever have been and there are reasons for what his proposals were and were not.

      4. @WARREN MOSLER, It is difficult to get a man to understand something when his paycheck depends on him not understanding it.

        Also I find it odd that those who feel they have the liberty to quote Keynes, to take his name, an to propose do called “Keynesian” stimulus know so little about him and are threatened enough by it to treat suggestions to actually review the very material being quoted as tactics comparable to Jehovah’s witnesses. Well, not of at all of there is something to hide.

      5. @WARREN MOSLER, You’re a good man, Warren. Despite Neil’s bizzarw objections, I still recommend you do two things he and PK have not been able to do: Read/understand The General Theory and A Treatise on Probability. I will leave you alone from this point.

      6. any specific points i should be on the lookout for?
        the parts of keynes I’ve read I already agreed with so didn’t see much point in reading any more.
        and most was written in the context of the gold standard of the time to be applicable,
        recognizing that he didn’t like it.

      7. @WARREN MOSLER, In A Treatise on Probability(TP) Keynes was able provide a general theory of probability showing degrees of uncertainty (later expanded upon by Daniel Ellsberg). This was his general theory of probability. Keynes implemented this uncertainty in decision makin to The General Theory in chapters 20 and 21 to prove the neoclassical is a special case. Keynes used Pigou’s microeconomic foundations chapters 8-10 on Pigou’s Theory of Unemployment) to combine with his Treatise on Probability discoveries. Only original Keynes, not the distorted monstrosity that is PK and it’s mathematically illiterate negligent scholars, can prove neoclassical wrong so we all can move forward. Keynes foundations for his theory of effective demand can be matched via isomorphism to CE Ferguson’s Microeconomic Theory section 13.2a in the third edition) for further validation. Also, despite what may be promoted, Samuelson came very close to Keynes an it is Davidson and PK that actually stray thought they are too illiterate to recognize it and too indifferent in terms of scholarship as Neil has demonstrated to see them as anything but impeding progress in economic theory. I suggest you upgrade your talent pool, Warren. Mosler Economics can do far better.

    3. @Adam1, PK and specifically Weintraub, Davidson, Kregel, Galbraith, Shackle, Harcourt, Hayes, Ambrosi, Chick, Dow, etc., resulted from the canards and fabrications spread by Joan and Austin Robinson and Richard Kahn, and the mathematical illiteracy of Dennis Robertson. Warren has been heavily influenced by Davidson. The continuation of this seems to be driven by by a combination of intellectual dishonesty, mathematical illiteracy, and poor scholarship (ex. How Warren can’t be bothered with actually reading Keynes prior to launching a rehashed amalgam of economic theories).

      1. @y, Joan Robinson told Paul Samuelson in 1948 that Richard Kahn was he real writer of GT. Joan Robinson has said that Keynes did not take the 20 minutes necessary tO learn the theory of value, Joan Robinson said that Keynes had no micro foundation in GT, Joan Robinson was not forthcoming in her “A lecture delivered at Oxford by a Cambridge economist”. Richard Kahn told Don Patinkin that he was responsible for the mathematical development of Aggregate Supply Curve – Aggregate Supply Function in GT chapters 20-21 (which he and PK don’t understand anyway). You are likely already familiar with most of he aforementioned but feel free to revisit, also read he biography of Keynes, one my Moggridge and one that may be later mentioned.

  4. Recommended by Mosler Economics as sound finance: digging holes in the ground to build unused structures that stand for generations (or fall down within a year).

    Aka, ‘infrastructure spending’ ‘public purpose’

    See, Ordos, China

    See, much of the rest of China

    Malinvestment, impoverishing the world on a scale beyond the dreams of the most hopped-up, inflated, too big for their britches, private sector entrepreneurs/builders.

  5. Not sure if you’re pro gold-digging (the real type, not the trying to find a rich husband type) or anti gold-digging. I always thought you were more on the anti-gold digging side.

    I’m rather indifferent, I think I’d prefer hiring people to dig for gold rather than hiring them to write yet another essay on obesity for the USDA, or update the USDA twitter feed or USDATV. If they’re digging for gold it’s probably easier to convince them that they aren’t changing the world and that other jobs would probably be more worthwhile – in fact, that sentiment should probably be a pre-condition for any Jobs Guarantee job.

    Anyhow, in the larger context (the chapter and section this quote comes from, not the whole book) Keynes seems to think that building pyramids and digging for gold may not be such a bad thing. In fact, he seems to think it’s a good thing.

    At periods when gold is available at suitable depths experience shows that the real wealth of the world increases rapidly; and when but little of it is so available, our wealth suffers stagnation or decline. Thus gold-mines are of the greatest value and importance to civilisation. just as wars have been the only form of large-scale loan expenditure which statesmen have thought justifiable, so gold-mining is the only pretext for digging holes in the ground which has recommended itself to bankers as sound finance; and each of these activities has played its part in progress-failing something better.

    Ancient Egypt was doubly fortunate, and doubtless owed to this its fabled wealth, in that it possessed two activities, namely, pyramid-building as well as the search for the precious metals, the fruits of which, since they could not serve the needs of man by being consumed, did not stale with abundance.

    So, does the quote mean you’re pro-gold digging too?

      1. @WARREN MOSLER,

        Oh absolutely. Keynes even makes the analogy of digging up buried dollars.

        But many seem to think that gold-digging is bad (I’m not advocating a gold standard), because they think there are clearly better things for people to be doing.

        My reading of the section suggests Keynes wasn’t so sure. So it wasn’t necessarily a dig at the bankers/gold-diggers — which is what many of the commenters seem to think.

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