[Martin Taylor 2004.01.23.1633]
[From Bruce Gregory (2004.01.23.1547)]
Actually, no. If you read my entire post carefully (remember,
economics is
serious business) you'll see that this is putting savings under the
mattress
is not necessary in order to keep it distinct from money that is
invested.
The money in your savings account is not equivalent to the money that
is
loaned by banks to investors.My mistake. We don't agree.
Bruce, sometimes I find your messages puzzlingly terse. Perhaps
that's better than being overly prolix, but there must be a happy
medium somewhere.
I take it that you don't agree with Rick when he says that money you
put in the bank is different from money loaned out by the bank to
investors? Why would you disagree with that?
If it is permissible for the bank to loan out $5 when I put $1 into
my savings, how can the two be equivalent?
I think a more interesting question, though, hangs on the nature of
"investment." So far as I can see, the whole benefit of capitalism as
opposed to anarchy is that when a lot of money can be directed toward
controlling a single person's perceptions, it does more (whether for
good or bad) than when that same pot of money is divided among the
powers of many people to control their sometimes conflicting and
usually orthogonal perceptions. The problem of total state control is
the reverse, in that if the powerfully controlled perceptions are
misdirected, the evil that can ensue is commensurately great. A happy
medium, again--things evolving to be on the edge of chaos rather than
being too rigid or too fluid.
So the "better" question is to ask what constitutes "investment"? Is
it the handing over of one's money to someone or some institution
that coalesces many such contributions toward a single purpose, or is
it gambling, as in playing the stock market, where any influence on
real production of goods and services is a pure side-effect? The
latter seems the more usual use of the term, which I think obscures
the value of investment in the real economy.
Martin