Abstract
As this book is rather sweeping in purview, it is appropriate to begin with a brief discussion of the premises which motivate and guide the analyses, together with an overview of the discussion to follow. The overarching concept in the book is that of myros (or what I will eventually rename as fluid capital). Myros is viewed as a fund (or equivalently a surplus), which comes into existence through saving out of current production and is extinguished through consumption, current production, and investment. Myros funds investment, current production, and consumption in excess of current income. Additionally, myros enables assets to acquire value, provides for both the existence and value of money, and is coextensive with the economic wealth of an economy. Myros is fundamental to the understanding of the macroeconomics of an economy, and what few macroeconomic laws that can be identified exist as consequences of the conservation laws, which myros imposes. Indeed, most of the analysis of the book can be viewed as a working through of the implications of these conservation laws.
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Notes
- 1.
An implication of this paragraph is that there is no difference in principle between the laws governing development in a low-income economy and development in a high-income economy. Institutional settings can differ, but the conservation laws imposed by the pool of myros are invariant. Growth and development will be the focus of Chaps. 12 and 13.
- 2.
The term is from Schumpeter (1934).
- 3.
- 4.
- 5.
That capital is a substance is uncritically accepted by the present generation of neoclassically trained economists was brought home to me a number of years ago by a bright young New Zealand economist, interested in macroeconomics and monetary theory, who was visiting Tucson for a few days. At one point, I asked him how he defined capital. His response was “Oh, capital! That is the K that appears in the aggregate production function!” Nothing, in my view, better illustrates the poverty of current-day capital theory.
- 6.
Probably my most unconventional views concerning demand theory are that consumption behavior should be approached in terms of the structure and functioning of the brain and that consumption decisions are derivative from decisions to maintain acceptable levels of psychological and physiological well-being. For elaboration, see Taylor (1987, 1988, 1992) and Taylor and Houthakker (2010).
- 7.
Throughout this book, “today,” “yesterday,” and “tomorrow” will be used frequently. “Today” refers to the current period, or simply the present; “yesterday” refers to the past, usually the indefinite past, but occasionally (depending upon context) to the most recent past period; “tomorrow” refers to the future, usually the indefinite future, unless the context specifies otherwise.
References
Mirowski, P. (1989), More Heat than Light: Economics as Social Physics, Physics as Nature’s Economics, Cambridge University Press, Cambridge.
Schumpeter, J.A. (1934), The Theory of Economic Development, Harvard University Press, Cambridge.
Taylor, L.D. (1987), “Opponent Processes and the Dynamics of Consumption,” in Economic Psychology: Intersections in Theory and Application, ed. by A.J. MacFadyen and H.W. MacFadyen, North Holland Publishing Co, Amsterdam.
Taylor, L.D. (1988), “A Model of Consumption Based on Psychological Opponent Processes,” in Psychological Foundations of Economic Behavior, ed. by P. Albanese, Praeger, New York.
Taylor, L.D. (1992), “Brain Structure and Consumption Dynamics,” in Aggregation, Consumption and Trade: Essays in Honor of Hendrik S. Houthakker, ed. by L. Phlips and L.D. Taylor, Kluwer Academic Publishers, Dordrecht.
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Taylor, L.D. (2010). Premises and an Overview. In: Capital, Accumulation, and Money. Springer, Boston, MA. https://doi.org/10.1007/978-0-387-98169-7_1
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DOI: https://doi.org/10.1007/978-0-387-98169-7_1
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