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It is literally true that the government can print money out of thin air. This is a genuine fact about the world today, so I don't see how Keynes would draw a
by QuesnayJr 6y ago
It is literally true that the government can print money out of thin air. This is a genuine fact about the world today, so I don't see how Keynes would draw a different conclusion.
Keynes did say
If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again… the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.
which is a more eloquent argument for an expansionary monetary policy than most current economists could produce.
- deleted 6y ago[deleted]
- injb 6y agoI've never understood this. If everyone is doing unproductive "busy work" (digging up money) instead of making useful goods and services, then how could the money be worth anything?
- claudeganon 6y agoIt’s not everyone. It’s those whom the economy had rendered unnecessary for its continued growth and functioning. Keynes’ argument is that it would be better for the economy, in aggregate, to put these people to some end using government spending, ideally a productive one (his example, building homes for people) then remove them from the loop.
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- ori_b 6y agoSomeone has to make shovels, houses, clothing, etc. The people who find the cash also end up spending it on other things. It doesn't matter that the money isn't initially earned for useful work, as long as it gets spent on useful work. Since it's digging through a mine using drill bits to break up the rocks, you can call the idea "minecoin bitting"
- ultrarunner 6y agoI wouldn’t much like to trade the things that fill my house for shovels and other money-digging items. How many people can the economy afford to allocate to money-digging before the production of other things that support our current quality of life begins to suffer?
- QuesnayJr 6y agoYou are misunderstanding the basic idea. Keynes is writing in a time of massive unemployment and idle resources. If you have massive unemployment and idle resources, then there isn't much of a trade-off. And he even says right there in the quote it would be better to have people do something productive.
- ultrarunner 6y agoI'm not misunderstanding the basic idea so much as rejecting it. Isn't one of the supposed benefits of UBI that people, once no longer occupied by work in order to provide for themselves, will be free to pursue other interests? That it would enrich our lives to be free from labor prescribed by others? Burying and digging up money is not productive; that's exactly the point. To the extent that scare resources are allocated to unproductive work, actual productive use of resources (time being one) suffers. If money-digging is more lucrative than producing food, people eventually begin to starve, increasing the demand for money-digging. If a person spends his time digging for money instead of learning something (or, indeed, planting his own garden) society is immeasurably worse-off.
- TheOtherHobbes 6y ago