Economics Dictionary of ArgumentsHome
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| Economy: Economy is the system of production, distribution, and consumption of goods and services within a society. It determines how resources are allocated and how goods and services are produced and distributed. See also Economics, Markets, Goods, Labour, Society._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Murray N. Rothbard on Economy - Dictionary of Arguments
Rothbard III530 Economy/Rothbard: A progressive economy is marked by aggregate net profits. >Production/Rothbard, >Capital value/Rothbard, >Capital structure/Rothbard. When there is a shift from one savings-investment level to a higher one (therefore, a progressing economy), aggregate profits are earned in the economy, particularly in the higher stages of production. >Production structure/Rothbard, >Profit/Rothbard, >Rate of profit/Rothbard. The increased gross investment first increases the aggregate capital value of firms that earn net profits. As production and investment increase in the higher stages, and the effects of the new saving continue, the profits disappear and become imputed to increases in real wage rates and in real ground rents. >Factors of production/Rothbard, >Land/Rothbard. The latter effect, added to a fall in the rate of interest, leads to a rise in the real capital values of ground land. >Capital value/Rothbard, >Interest rate/Rothbard, >Factor income/Rothbard, Cf. >Evenly Rotating Economy/Rothbard. Rothbard III 531 Retrogressing economy: The case of decreasing gross capital investment is defined as a retrogressing economy. The decreased investment is first revealed as aggregate losses in the economy, particularly losses to firms in the highest stages of production, the firms which are now losing customers. As time proceeds, these losses will tend to disappear, as firms leave the industry and abandon the now unprofitable production processes. The losses will thereby be imputed to factors in the form of lower real wage rates and lower real rents, which, combined with a higher interest rate, cause lower real capital values of ground land. Particularly hard hit will be the factors specific to these lines of production. >Gain and Loss/Rothbard, >Rent/Rothbard, >Wages/Rothbard, >Demand/Rothbard, >Supply/Rothbard. In the retrogressing economy, investment funds are lowered, and this leaves net areas of overcapitalization of factors in the economy. Their owners suffer aggregate net losses during this period of change. >Capitalization/Rothbard. Stationary economy: (…) [here] aggregate profits will equal aggregate losses (…), i.e., profits and losses will equal zero. This stationary economy is not the same construct as the evenly rotating economy (…). Cf. >Evenly Rotating Economy/Rothbard. In the stationary economy, uncertainty does not disappear and no unending constant round pervades all elements in the system. >Capital Consumption/Rothbard, >Crises/Rothbard, >Progress/Rothbard. Rothbard III 560 Economy/progress/Rothbard: In the progressing economy, the supply of capital per person increases. The supply of all ranks of capital goods increases, thereby decreasing the marginal value productivities of capital goods, so that the prices of capital goods fall. The relative MVPs of land and labor factors, in the aggregate, tend to rise, so that their income will rise in real terms, if not in monetary ones. >Factor Market/Rothbard. Rothbard III 817 Economy/Rothbard: In a progressing economy, the secular trend for the four determining factors is likely to be: 1) Money stock: the money stock increasing gradually as gold production adds to the previous total; 2) Stock of goods: the stock of goods increasing as capital investment accumulates; 3) Reservation demand for goods: the reservation demand for goods disappearing because short-run speculations disappear over the long run, and this is the main reason for such a demand; 4) Reservation demand for money: the reservation demand for money unknown, with clearing, for example, working to reduce this demand over a period of time, and the greater number oftransactions tending to increase it. Economics: The result is that we cannot precisely say how the PPM will move in a progressing economy, though the best summary guess would be that it declines as a result of the influence of the increased stock of goods. Certainly, the influence of the goods side is in the direction of falling prices; the money side we cannot predict. Subjectivity: Thus, the ultimate determinants of the PPM as well as of specific prices are the subjective utilities of individuals (the determinants of demand) and the given objective stocks of goods (…)._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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