Saturday, September 19, 2020

The False Distinction Between “Micro-“ and “Macro-“ Economics

Sound economics always considers the actions of the individual in relation to the rest of the economic system and the economic system as a whole in relation to the actions of individuals.

So-called "micro-economics” considers the actions of individuals as though divorced from the rest of the economic system, while so-called "macro-economics" considers the economic system as though divorced from the actions of individuals. It's a double error.

But it is so pervasive that it is sometimes necessary to use its terminology so that those who know little or nothing about sound economics will be able to feel a measure of the familiar.

Post is in response to a tweet by Mikiel de Bary, at

Friday, September 18, 2020

Replace Justice Ginsburg with a Strong Constitutionalist

The United States is teetering on the brink of a revolution or civil war. To move our country back toward peace and stability, Pres. Trump must immediately appoint a strong Constitutionalist to fill the vacancy on the Supreme Court opened by the death of Justice Ginsburg.

He should give absolutely no consideration to fear of provoking more rioting by the Left. The Left will riot in any case. Better that they do it when there is an additional Constitutionalist on the Court than when there isn’t, or worse, another Leftist.

You do not gain anything from your enemy by making yourself weaker. That serves only to further embolden him. You must be stronger, not weaker, if you are going to stop him.

Wednesday, September 16, 2020

Are Marxists Scaredy-Cats?

Marxists and the other mindless morons they influence, have been running around picking fights with statues of long dead slave owners that they gleefully topple over and destroy.


What’s the matter, Marxists? Why do you need to pick fights with statues? In your dreck-bedecked world, there are plenty of present-day, living, breathing slave owners. You call them capitalists or “capitalist exploiters.”


And you call their employees “wage slaves,” by which you mean real live slaves.


What makes you confuse employees with slaves is your lunatic belief that under capitalism, wages are set at the same level as the remuneration of slaves, namely, minimum subsistence, and that all that the workers produce beyond that goes to the capitalists as profit.


Knowing how close you are to a psychotic break, I don’t want to name any specific targets for you to demonstrate against in the name of abolition, lest you burn down their houses and kill them. But you know who many of them are. They’re very prominent. And many of them fund you.


So why don’t you pick some targets on your own. Be sure to present a good, fat list of demands. I hesitate to call them “reparations,” because BLM and Antifa have already laid claim to those. Anyway, I’m sure you’ll work something out.


To learn more, everyone should buy and read “Marxism/Socialism…” 99¢ at

Tuesday, September 08, 2020

In Aggregate Economic Accounting Most Spending Is Not Consumption but Is Concealed under Net Investment

Attention: all economics students. Perhaps the most prominent equation in macroeconomics is that national income (essentially the sum of profits and wages) equals net national product, which is the sum of consumption plus net investment.

Because consumption is much larger that net investment, it is almost universally assumed that it pays the bulk of national income. However, most spending in the economic system is actually not consumption. RATHER, IT IS CONCEALED UNDER NET INVESTMENT.

Net investment is the difference between two enormous sums: a minuend consisting of the total of business spending for capital goods and labor, and a subtrahend consisting of the costs that are deducted from sales revenues in calculating profits.

The minuend contains additions to asset accounts (plant and equipment and inventory and work in progress) while the subtrahend contains subtractions from asset accounts, notably depreciation and cost of goods sold. Selling, general, and administrative expenses appear equally in both the minuend and the subtrahend.

The difference between additions to and subtractions from asset accounts is the net change in those accounts, i.e., net investment.

The minuend in calculating net investment is where the bulk of spending in the economic system lies. I call this spending “productive expenditure.”

The concept of productive expenditure is not recognized in contemporary economics. It is believed that it is somehow included in consumption expenditure and that to recognize it separately would constitute the error of “double counting.”

For further elaboration and proof, including a thorough discussion of the issue of “double counting,” see Chapter 15 of my Capitalism: A Treatise on Economics. It’s available at

Read this chapter, tell your economics professors about it, and ask them to show you what’s wrong with my claim that most spending takes place under the head of net investment.