Trickle-Down Economics—Gary North

“We cannot, as economic scientists, say that any policy will increase total social utility. There is no way to measure “total social utility.” So effective is this argument that it denies to economics the legitimacy of making estimates of the total value of any aggregates.  What does Gross National Product mean, anyway, if we cannot assign any value (or meaning) to the columns of figures in a GNP index? If Robbins’ thesis is correct—and since 1932, no economist has shown how it might be incorrect—then most of what we know as modern applied economics, including the formulation of economic policy, is an illusion.” Gary North

YESGDP (not to mention fake government numbers, for many, many reasons) and modern applied economics (for many, many reasons) are illusions! And when the crash comes the Keynesians will say: Who knew? It was just “animal spirits” [Keynes said that]. Austrians know what causes booms (lower interest rates than market interest rates are primary in causing malinvestment booms, which must necessarily end in busts [liquidations of malinvestments]). Keynesians and their math and fake statistics don’t understand the causes of booms and busts. It is just the animal spirits of people. Their mathematical models—that treat people like cattle—cannot see the causes of malinvestment booms, which cannot be sustained, and they cannot understand that the unsustainable malinvestments must be liquidated.  Blame the crash on the people instead; and their animal spirits.  GDP numbers are dehumanizingGDP NUMBERS DO NOT CONSIDER PRODUCTION AND PRODUCTIVE EFFORTS–ESPECIALLY BY ENTREPRENEURS–AND RELATES ONLY TO CONSUMPTIONSO WHY DO PEOPLE RELY ON GDP NUMBERS AND WHY DO THE NUMBERS APPEAR TO WORK?–UNTIL THEY DON’T WORKTHE ANSWERAS WE HAVE FAITH IN THE FAKE DOLLAR, MANY HAVE FAITH IN THE FAKE GDP NUMBERS.  Richard Duke


The Faulty Logic of GDP Necessitates an Economic Paradigm Shift


Economists still lack a proper understanding of business cycles


Say’s Law or Say’s Law of Markets is a principle attributed to French businessman and economist Jean-Baptiste Say, stating that there can be no demand without supply. He theorized that the activity of production opens a demand for the products produced. Thus the mere creation of one product immediately opens an avenue for other products. To put it another way, Say was making the claim that production is the source of demand. One’s ability to demand goods and services from others derives from the income produced by one’s own acts of production. Wealth is created by production not by consumption. My ability to demand food, clothing, and shelter derives from the productivity of my labor or my nonlabor assets. The higher or lower that productivity is, the higher or lower is my power to demand other goods and services.



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