EOpriv

John: On aggregates and ownership. I have a son who while not an economist has that degree from the Air Force Academy. He emailed your note to his former academy advisor who has a PHD in economics, left the academy for a liberal arts college as a professor of economics and has now returned to the academy as a civilian professor. The fellow is very bright and may shed some insights on your questions.I am a retired businessman who studied economics 50 years ago. My sons training ended in 1989. Since then he has been a figher and now airlines pilot.We both sense that you might be trying to find a model using a combination of economics and a social consience. They might be unrelated and such a model may not exist. We both do believe though that there is a crossover point where even a free market economist would cheer Keynes. That is the point at which enough wealth is shared, created by pump priming or whatever, so that there there is a level of consumer purchasing power in the economy to sustain a GNP. level or grow it. Services provided by government, to the extent that the taxes to support them, do not exceed the cost of purchase on the open market - frees up resources to create other purchasing power. Another is lower taxes and rebates.Another is to is to pay higher wages. Another subjective element is an employment level to create consumer confidence. It could be based on a free market or as I saw in the old Soviet Union an inefficient ( in my businees terms) planned economy with "full" employment.

I personally see this idea being applied to globalization. While no doubt the goal to create wealth for the multinational corporations , and maybe their investors is prime.- At least for the GE's and Walmarts who need among other things consumer purchasing power so that they can sell their productsor services - there needs to be a population which has either cash or credit to buy them in whatever country they want to expand.So it would seem that it is in their best interest to see that happen. I imagine that they are bright enough to have figured it out I know of no such examples. However, someone did a good job of providing TV sets to the residents of the river slums in Bankok. This was 15 years ago and hopefully by now those sets are being manufactured there. I hope our friend can help you and thank you for the question.It created an interesting discussion different that the usual "what the Cincinatti Bengals have to do to win a football game."We live in Louisville, KY. Don Ward.

From: John Médaille

>Reply-To: EOpriv@cog.kent.edu

>To: EOpriv@cog.kent.edu

>Subject: EOpriv: OWNERSHIP: Aggregates and Ownership

>Date: Fri, 20 Sep 2002 20:37:00 -0500

>I have a question for the economists on the list, and it is likely a

>naive question. Is it the accepted opinion that an economy can be

>described entirely (or at least adequately) in terms of aggregates

>of wealth and income, or must the mathematics encompass the

>distribution curves of the same? I believe that this question is

>equivalent to the question, "Is justice intrinsic to economics, or

>is it economics indifferent to justice?"

>ISTM that the distribution curves always embody some notion of

>justice, whether that notion be "the rich should rule" or "everybody

>should get the same," or whatever. Now if an economy of a given

>amount of wealth and income operates the same, or nearly, regardless

>of what the actual distributions might be, then we must conclude, I

>think, that justice is extrinsic to economics. However, if different

>curves describe different economies in terms of stability,

>investment opportunity, market size, etc., then economics

>willy-nilly embodies some particular view of justice; the two cannot

>rationally be separated. If the later is the case, as I suspect it

>is, then justice can be "justified" on purely economic grounds. And

>one can then work either way: one can validly criticize the economy

>on moral grounds, with the result of producing a stronger economy,

>or one can adopt purely economic criteria (market stability in terms

>of freedom from recession, for example) to reach a more moral

>system. Or, to state it another way, moral criteria will have an

>equivalent in purely economic terms, and vice-versa. Thus, one can

>say in moralistic terms, "Each work ought to be able to earn enough

>to support his family and obtain some reasonable security," or one

>can say in economistic terms, "a broadened purchasing base leads to

>more stable markets, increased competition, and better investment

>opportunities, etc." The two statements would really refer to the

>same thing, but from different points of view.

>My understanding of Keynes (which is probably incorrect) is that he

>was somewhat schizophrenic on this issue. He described the economy

>in terms of aggregates, but the whole point of his theory was to

>pump funds from the wealthy to the less wealthy in order to keep the

>"money machine" supplied with purchasing power. ISTM that if you

>could describe the economy solely in terms of aggregates, then there

>is no need to improve the purchasing power of the mass of men, at

>least not from a purely economic standpoint.

>IAC, in the vast literature of economics, there must be some

>writings and studies done on this. Has anybody got any suggestions

>for reading?

>John C. Médaille

>"A dead thing can go with the stream...

>but only a living thing can go against it."

> -G. K. Chesterton

>http://www.medaille.com/distributivism.htm

>john@medaille.com

Re: EOpriv: OWNERSHIP: Aggregates and Ownership