Re: how does it work?

In article <1142539913.197871.108590@xxxxxxxxxxxxxxxxxxxxxxxxxxxx>,
"Zerge" <zerge@xxxxxxxxxxx> wrote:

edi wrote:

"How can in the sum total of the worlds economy, from the gross global
product, goods and services, (which for tallying purposes is converted
into the symbol "money"),
some 80% is extracted and given control to 20% of the people, where
does the ability come from to purchase all (or most) of it?
I mean the top few can't physically consume it all, and there isn't
enough "money" left for the rest to purchase it.

Very simple. Those who have a lot of wealth and can't spend it all,
LEND it to other people. These people use the money to create new
businesses, or to consume...

I think the original poster asks a good question. Zerge gives a
mistaken answer.

Consider my post this morning (16 March) in which the rate of growth
along a smooth growth path is determined by the animal spirits of
corporate managers. In this model, the decisions of consumers to
save (and lend) or consume cannot affect whether smooth growth is
achieved.

And the model I give has something to do with institutions in
the American economic system. Furthermore, Stephen Marglin showed
some time ago that some such model was empirically superior to
Zerge's (probably illogical*) ideas.

"It is better to be left with an empty mind than one filled
with nonsense - with deductive inconsistencies and fanciful
empirical hypotheses."
-- Paul Samuelson

* The rate of interest is not determined by the interaction of
well-behaved supply and demand curves in either a market for
"capital" or a market for loans.

--
Mostly economics: <http://www.dreamscape.com/rvien/#PublicationsForFun>
r c
v s a Whether strength of body or of mind, or wisdom, or
i m p virtue, are found in proportion to the power or wealth
e a e of a man is a question fit perhaps to be discussed by
n e . slaves in the hearing of their masters, but highly
@ r c m unbecoming to reasonable and free men in search of
d o the truth. -- Rousseau
.

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