Soft privatization

Doug Henwood dhenwood at
Thu Jul 30 22:12:31 PDT 1998

Jordan Hayes wrote:

>what i can't understand is why people think there's some
>pile of money out there that's presently _not_ being invested
>somewhere. i mean, they call it a 'trust fund' but it isn't
>really in any sense an actual fund, right? fica payments go into
>the treasury and the treasury makes payments to current recipients.
>what trust fund?

"No trust," as they said on Melville's Fidele.

>From Keynes's General Theory, pp. 104-105:

"Effective demand can be derived only from present consumption or from present provision for future consumption. The consumption for which we can profitably provide in advance cannot be pushed indefinitely into the future. We cannot provide for future consumption by financial expedient but only by current physical output. In so far as our social and business organisation separates financial provision for the future from physical provision for the future so that efforts to secure the former do not necessarily carry the latter with them, financial prudence will be liable to destroy effective demand and thus impair well-being, as there are many examples to testify. The greater, moreover, the consumption for which we have provided in advance, the more difficult it is to find something further to provide for in advance, and the greater our dependence on present consumption as a source of effective demand. Yet the larger our incomes, the stronger, unfortunately, is our propensity to withhold our income from present consumption. So, failing some novel expedient, there is, as we shall see, no answer to the riddle, except that there must be sufficient unemployment to keep us so poor that we are discinclined to set aside more gross savings than the equivalent of the physical provision for future consumption (including replacements) which it pays to produce today."


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