[OPE] Dr Smaghi on debt (especially for Paul Cockshott)

When Kuznets refined a measurable concept of capital formation, he clearly
had in mind the net increase of the physical (tangible) capital stock. That
is very similar to your concept.

But from the point of view of a research statistician, which concept you
prefer to use just depends on the purpose of measurement and what the
results of measurement will be used for. If for example you want to
understand real social and economic relations in 2010, you need many
additional measures.

The weakness in the Marxist approach is that they assert a philosophical
theory of how reality fits together, and then they try to make this more
"scientific" by buttressing the metaphysics with statistical elaborations.

That is not my approach, because I start with the research question itself,
I start with "what is the question?". That is a scientific approach, not a
philosophical approach. The philosophical approach is that there exists an
answer already before you have asked a question.

Jerry's approach is a good example of the philosophical approach. From
behind his writing desk he can cut concepts into four square parts and
define such this as "productive labour", "services", "faux frais of
production" etc. and he has done nil research into it except that he worked
in a car factory once. He is just The Master of Distinctions, The Master of
Categorization, and the proof of his mastery is, that he earns a good salary
with it. Well good on him, he licked that problem well. But I do not regard
this as scientific.

Effectively Smaghi is saying that traders can wreck the internal balances of
an economy, but make money from doing so. They can make money even when they
jolly well know that the effect of what they are doing is not sustainable
and must cave in - it is of no concern, because before that happens they
have already taken their money out - in fact, their action of taking their
money out (because they're the first to anticipate trouble) precipitates the
economic havoc.

J.

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Received on Sat Oct 2 10:20:11 2010