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/liberty/ - Liberty

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 No.71884

 No.71885

>>71884

>The total amount of spending drives the economy

That's pretty broad and vague. The total sum of all spending in itself is not useful to any individual. We're heading off to bad macro territory. How many individuals do you think look at the total world spending, or even national, to base their decisions on it? For it to be "driving" anything it has to be influencing it. The circulation of wealth in itself is a completely redundant classification.

"If you add up total spending and the total quantity sold in ALL of the markets, you have everything you need to know to understand the Economy. It's just that simple."

And I think it's not and he's just that dense. By that screwed logic all you would need to "keep" an economy healthy is to infinitely keep spending, and whenever you spend less it would mean you're doing poorly and have "lost" wealth.

Spending in itself does NOT drive the economy as he keeps repeating. You can't spend your way into creating demand. He also completely intentionally doesn't point out that the Central Bank has no means of knowing when to lower or prop up interest rates. The bank may lower interest rates in a time of deflation to keep people spending more, but it can not fix the damage from the misallocation of resources that remains a fact of reality. What it can do though, is increase the amount of misinvested capital by even more by further disincentivizing saving and cautious spending in a time the economy needs to cool off and see where it went wrong.

The "vicious cycle" is not a natural occurrence. All in all, it's too long of an explanation, inaccurate and at times makes assertions without argumentation. Especially every time he refers to "human nature" in itself. This is more Sociology playing with mathematical models than real Economic theory. The implied need for the Government to intervene and "fix" the Economy comes from the unsupported assertion that it was needed in the first place when it created the crash.


 No.71886

File: 5ca137bfd0903ff⋯.jpeg (24.29 KB, 454x482, 227:241, Mises.jpeg)

>>71885

What the video has to do is with monetary theory and business cycles which I'm arguing from this book's position.

https://mises.org/library/theory-money-and-credit

A simple explanation of how the economy works is not this one. Nor is it complete for taking half an hour.

This one is a lot better at it. http://freedom-school.com/money/how-an-economy-grows.pdf


 No.71889

File: 5d052c76dcacd6e⋯.pdf (2.48 MB, Arnold Kling - Specializat….pdf)

Arnold Kling wrote a good critique of the machine-metaphor, and some other concepts like money velocity. Not all he says is correct, but his critique of the economic mainstream is quite good.


 No.71890

>>71889

It's good to make it clear that at least the Austrians don't refer to the economy as a literal automated machine with clearly known functions and parts. Socialists may direct that critique somewhere else. There is no Homo Economicus in Austrian theory. The same can not be broadly said neither for Neo Classicals, nor Chicago school. There are individual differences there.

https://mises.org/blog/mises-killed-homo-economicus-long-thaler


 No.71891

>>71884

>if we can understand transactions we can understand economy

i disagree




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