I can think of the 10, 30 and 40 to 1 multiplications that banks have, on a 100 dollar in deposit, for example, they can loan out $4000. This is the issue in a nutshell. The arguments is how do the people become the currency as shareholders, business-owners, investors, workers and on wages.

Or is it the Swedes that are famous for massage? Darn my American penchant for confusing social idioms!

In all seriousness though, an Austrian economic stimulus package (as suggested by some of the above commentary) sounds about as twisted as Ingsoc’s “Freedom is Slavery” line.

Ayn Rand has it right, go on strike.

Furthermore, if this director were able to measure the difference between good investment and malinvestment (and what the structure of production should be, including how factors of production should be allocated among all lines of production), then why not place all investment decisions in the economy in his hands? Why not a *total* “stimulus package”? (I.e., socialism.) I think you are ignoring the Austrian arguments against central planning–that there is no way for the director to do what you are asking him to do.

You ask “what is the best way out?” But it is not clear to me what you think the problem is. What price and wage rigidities are creating an insurmountable obstacle to necessary falls in price and adjustment of the structure of production?

I think I’ve insisted more than once that the idea of an Austrian stimulus, as an actual policy option, is a fictional idea. From the abstract, at least:

“The thought experiment presented in the paper is designed to provide the reader with a direct comparison of major analytical claims of the two competing approaches to assess the ability of each of the two to affect, positively or negatively, employment, capital accumulation, and the general standard of living/real wages.”

“Comparison of analytical claims” is the key issue here.

Yet, if not a “stimulus package”, assuming price and wage rigidities that we undoubtedly have to acknowledge, what is the best way out? I think that Prof. Reisman’s proposal to return to a gold standard (fn. 2) appears to me as the best option available under the present reality.

Still, if we had a choice the “structural of production theory” would offer a better “stimulus package” than the one inspired by Keynesian economics. Specifically, I’m sure we would be able to avoid financing many of the more wealth-destroying projects but which according to the Keynesian view are unobjectionable.

Please let me know if it doesn’t make sense to you and you have further questions.

I wonder if any group of Austrian economists would agree to the necessity of a stimulus package.Conceding even this point, Austrian economists, much like the Keynesians, would have no mechanism to disperse the funds into the economy; furthermore, they cannot guarantee high monetary velocity, rapid capital goods consumption, or to prevent wealth disparity. Finally, I agree with your assertion that “CSRA funds must be saved and productively expended.” However, you fail to predict whether the CSRA recipient ‘will save and productively expend’ the funds. This is simply beyond the capacity of any economist, no matter how well-meaning or planned.

I liken this paper to fictional works that compare alternate realities. While thought-provoking, this paper has more substance on the Keynesian side,while offering substantially less vis-a-vis compare and contrast (as was its stated objective?).

If you would like to add caveats, feel free to contact me.
Kind regards,

J Braddoc