There is little doubt that the observation that quality may depend on price (productivity on wages; default probability on interest rates) has provided a rich mine for economic theorists: A simple modification of the basic assumptions results in a profound alteration of many of the basic conclusions of the standard paradigm. The Law of Supply and Demand has been repealed. The Law of the Single Price has been repealed. The Fundamental Theorem of Welfare Economics has been shown not to be valid. More than that, the theories that we describe here provide the basis of progress toward a unification of macroeconomics and microeconomics. They pro vide an explanation of unemployment and credit rationing, derived from basic microeconomic principles. It is a theory in which the extensive idleness that periodically confronts society's resources, human and capital, is seen as but the most obvious example of market failures that prevasively and persistently distort the allocation of resources.
Joseph StiglitzRelated topics
allocation alteration basic basis capital credit default demand doubt economics example explanation fundamental human idleness interest law market mine modification observation paradigm price pro probability productivity profound progress quality rich seen show simple single standard supply theorem theory unification wages welfare rationing macroeconomics microeconomics unemployment ratesRelated quotes
Wages, profits, prices are determined, always have been determined, and always will be determined until we go Communist, by the market-by supply and demand working through the market. While we tie ourselves into knots trying to invent non-market criteria for our commissions to use, the market is there, noiselessly, efficiently, irresistibly doing the job for us all the time. Irresistibly-yes, and there's the rub. For there is one thing outside the market in a modern economy, and that is money itself. Governments can and do satisfy the demand for money, raise and lower the supply of money. In short, governments have the power to control money, which is so largely their own creation. If governments allow monetary demand to increase faster than productivity, the market will not stop the process, because it cannot stop it. The market will simply go on determining wages, profits and prices in ever higher monetary terms-until something busts.
Enoch Powell
Regional Banks that are constrained to lend within a particular area are a necessary part of the institutional ecology in that they resist the centralising power of capital, allow a more stable access to credit for regional and smaller businesses and encourage relationships and reciprocity to constrain the demand for higher rates of return that have decimated the mutual bank sector in Britain. They also offer an alternative to usurious lending, one of the great growth areas in our economy. Any serious reflection on ‘employment policies' must confront the centralisation of capital and the state and seek to constrain both through the endowment of decentralised regional and sectoral institutions that constrain centralisation and preserve and renew traditions of virtue within the economy through resisting the commodification of human beings, nature and knowledge demanded by the maximum return on investment. It allows initiative and enterprise to be oriented towards the future.
Maurice Glasman, Baron Glasman
As is often the case with major disputes in economics, the argument over fiscal policy went on for years, with some critics of fiscal policy still defending their position when this book went to press. It seems fair, however, to say that among economists a more or less Keynesian view of the effects of fiscal policy came to prevail. Careful statistical studies at the International Monetary Fund and else where showed that austerity policies have historically been followed by contraction, not expansion. Recent experience, in which countries like Spain and Greece that were forced into severe austerity also experienced severe slumps, seemed to confirm that observation. Furthermore, it was clear that those who had predicted a sharp rise in U. S. interest rates due to budget deficits, leading to conventional crowding out, had been wrong: U. S. long-term interest rates remained near record lows even during the years from 2009 to 2012, when the government ran very large deficits.
Paul Krugman
One must therefore portray the meaning of the sacred writings in a threefold way upon one's own soul, so that the simple person may be edified by what we may call the flesh of the scripture, this name being given to the obvious interpretation; while the one who has made some progress may be edified by its soul, as it were; and the one who is perfect and like those mentioned by the apostle: "We speak wisdom among the perfect; yet a wisdom not of this world, nor of the rulers of this world, which are coming to nought; but we speak God's wisdom in a mystery, even the wisdom that has been hidden, which God foreordained before the world unto our glory" (1 Cor. 2:6-7)--this one may be edified by the spiritual law, which has "a shadow of the good things to come" (cf. Rom. 7:14). For just as the human being consists of body, soul and spirit, so in the same way does the scripture, which has been prepared by God to be given for humanity's salvation.
Origen
It is not to be inferred that it would be anything less than courting national disaster to leave our country barren of defense. Human nature is a very constant quality. While there is justification for hoping and believing that we are moving toward perfection, it would be idle and absurd to assume that we have already reached it. We can not disregard history. There have been and will be domestic disorders. There have been and will be tendencies of one nation to encroach on another. I believe in the maintenance of an Army and Navy, not for aggression but for defense. Security and order are our most valuable possessions. They are cheap at any price. But I am opposed to every kind of military aggrandizement and to all forms of competitive armament. The ideal would be for nations to become parties to mutual covenants limiting their military establishments, and making it obvious that they are not maintained to menace each other. This ideal should be made practical as fast as possible.
Calvin Coolidge
