From: gcf@panix.com (Gordon Fitch)
Subject: Re: Economics and the Dart Board
Date: Wed, 16 Dec 1992 21:26:41 GMT
Distribution: usa
Organization: mydog in exile

gcf@panix.com (Gordon Fitch) writes:
| }>>}As evidence I refer you to the "Clinton recovery", which
| }>>}seems to be taking place only because Clinton was elected 
| }>>}(actually, because Clinton was _likely_ to be elected, at
| }>>}first).

starr@genie.slhs.udel.edu (Tim Starr) writes:
| }>>Nope.  It's caused by Greenspan's credit expansion at the Fed, a.k.a.,
| }>>inflation.

palmer@icat.larc.nasa.gov (Michael T. Palmer) wrote something which
Peter excised, unless it was the previous thing.

nelson_p@apollo.hp.com (Peter Nelson) writes:
| }  So which is it?  How do we know those are the only two 
| }  possibilities?  If it was the Fed expansion then how do we 
| }  explain that in August, after a dozen or so Fed cuts, the 
| }  M2 actually went *down*?   Inflation is defined as an increase
| }  in the money supply, so a falling M2 rules this out and more-
| }  over a falling M2 sure isn't predicted by any theory that's been
| }  presented here.

Tim Starr:
| While I'll leave it to actual economists to judge the merit of explaining
| the drop of M2, M1 has been going up steadily and quite a bit for quite a
| while now.

Let me put forward what I think "recovery" and "prosperity"
are.  As I said, I believe the facts of economics are
psychological in origin, and that economics is therefore a
science of human behavior, and thus generally imprecise, in
fact generally fictive, at the current stage of our
knowledge.

We should distinguish between the bourgeois concept of
prosperity and what an unbourgeoisified human would consider
to be prosperity.  The latter's version of prosperity is
clearly "having enough, or more than enough, stuff" where
_stuff_ is defined as "goods and services possessing use-
value to me."  The bourgeois approach is different: it is
"tending to enhance my project, capital."  The latter
definition excludes vernacular production for consumption,
even when some of the production is locally capitalized,
because it doesn't enter into the general economy and become
subject to bourgeois control.  Otherwise, although it looks
different, it intersects greatly with the non-bourgeois
definition, because the production of goods and services
under bourgeois control enhances capital; the important
difference is that while vernacular production is concerned
with use-value, bourgeois production is concerned with
exchange value.

That's what the GNP (and similar measures) measure: exchange
value.

So in order to have the kind of "prosperity" or "recovery"
that the (inevitably bourgeois) media talk about, production
has to be manifested as exchange value.  To get this to
happen -- to get more exchange value to appear in one season
than in another -- several things have to happen: people
have to be motivated to job-work; people have to be put in
jobs, situations where they can produce exchange value; and
people have to be motivated to recognize the exchange value
in markets, that is, to buy stuff.  Of the these three
things, two are mostly a matter of manipulating the emotions
of the public; that is, they are products of hucksterism.
(The other, "employment", is pretty mystical, and will have 
to be treated at another time; but it has substantial 
emotional and intuitive components.)

There are many forms of hucksterism, and printing money,
also known as "lowering the prime rate" and "increasing Mn,
(n = 1, 2, ...)" is one of them; people Pavlovianly hook
money to use-value, so if you give them a wad of it they get
excited and happy.  The problem with it is that it tends to 
run out pretty quickly, that is, tolerance develops.  So 
increasing the money supply _might_ bring about "recovery" 
but it might not.  Bush, being a repulsive-preppie type,
could expand the money supply but he couldn't throb the
masses as Reagan did; Clinton, apparently, is more to their 
taste, a lover-boy and sometime pot-smoker who seems to 
have his wits about him and to be at once daring and 
conservative.  Of course, he's eventually got to be 
inaugurated, which may pose serious problems for him.
-- 

 )*(    Gordon Fitch    )*(    gcf@panix.com    )*(
( 1238 Blg. Grn. Sta.,  NY NY 10274 * 718.273.5556 )
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