Saturday, February 25, 2017

Michael Roberts — Kenneth’s three arrows

So Kenneth Arrow leaves us with three arrows to enrich our understanding of the economic world: 1) markets collectively can never properly deliver every individual’s needs; 2) markets cannot equate supply and demand except under the most unrealistic assumptions and 3) economic growth is not achieved by just meeting the demand of consumers but requires decisions of investors to innovate. Ironically, none of the implications of these economic arrows have been accepted by the owners of capital and their politicians in practical policy. To do so, would be to admit that capitalism does not work for the majority or even much of the time for the capitalists.
Michael Roberts' Blog
Kenneth’s three arrows
Michael Roberts


Noah Way said...

Why is everything based on the notion of "economic growth"?

In medicine perpetual growth is called cancer.

Magpie said...

Economic growth?

Peter Dorman:

Degrowth and Disinvestment: Yea or Nay?
Hey, degrowthers! I know you’re out there. I’d like to get your take on a post by Tim Taylor on investment.

Andrew Anderson said...

Why is everything based on the notion of "economic growth"? Noah Way

Because government privileges for private credit creation drive people and businesses into debt? Debt which must be repaid with interest - interest which does not even necessarily exist except as more debt? Potentially causing exponential private debt which must be serviced with exponential growth?

“You shall not charge interest to your countrymen: interest on money, food, or anything that may be loaned at interest. You may charge interest to a foreigner, but to your countrymen you shall not charge interest, so that the Lord your God may bless you in all that you undertake in the land which you are about to enter to possess. Deuteronomy 23:19-20 New American Standard Bible (NASB) [bold added]

Not only do we allow interest from fellow countrymen but government privileges private debt creation!