[lbo-talk] Re: wotsit madder

Bill Bartlett billbartlett at dodo.com.au
Fri Mar 5 15:46:42 PST 2004


At 6:35 PM -0500 5/3/04, Doug Henwood wrote:


>>I doubt it makes the mechanics of the economy any clearer to refer
>>to supply as "effective demand".
>
>It makes a very important point for Keynes: the level of demand in
>an economy is determined by the investment and hiring decisions of
>businesspeople, and their decisions are based on expected profit.
>The word "expected" is very important for Keynes - a lot depends on
>the psychological state of the investing class. Supply siders like
>to claim that JMK didn't care about the supply side, which is very
>wrong.

Yes, expected investment has an important influence on effective demand. But supply is not demand and it irritates me when people distort the meaning of words.

Bill Bartlett Bracknell Tas



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