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From: orb@whuxl.UUCP (SEVENER)
Newsgroups: net.politics.theory
Subject: Re: Business Cycles -- Note to Gadfly:Re to DKmcK
Message-ID: <632@whuxl.UUCP>
Date: Fri, 10-May-85 10:46:50 EDT
Article-I.D.: whuxl.632
Posted: Fri May 10 10:46:50 1985
Date-Received: Sat, 11-May-85 02:27:36 EDT
References: <1146@ratex.UUCP>
Organization: AT&T Bell Laboratories, Whippany
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> 
> Comment of Gadfly:
> >[...] Capitalism has its strong points, but the misery brought
> >about by boom-and-bust overproduction is not one of them.
> 
> Business cycles are indeed not a strong point of Capitalism; nor are they a
> weak point.  They are, in fact, not a point of Capitalism at all, but rather
> of government manipulation of the money supply which distorts patterns of
> savings and investment.
> 
>                                Back later,
>                                DKMcK

Come now, Dan, surely you jest.  Cycles are a phenomenon of *any* 
dynamic system, be it economic, ecological or biological.
In order for there to be *no* economic cycles whatsoever the
system would have to be *constantly* at the exact equilibrium point.
Plausibly the only way such a system could exist would be if were
actually no longer dynamic whatsover-i.e. either stagnant or dead.
Indeed the whole point of neoclassical economic theory (and Marx'
statements about the dynamism of Capitalism) is that supply and
demand are dynamic and constantly shifting- such things as
price controls restrict such dynamic changes in price and supply.
As conditions shift the equilibrium point also shifts-but responding
to these shifts involves lag effects and other factors.
 
As I have pointed out earlier, it is possible theoretically for
the market system to become more and more erratic under the
conditions of the cobweb effect.
 
Statements such as the above make me wonder if you are studying
economics as a science or Libertarianism as a simplistic
ideology totally divorced from either reality or logic.
 
At the same time, I think it is just as much a mistake to assume
that economic cycles do not exist in centrally planned economies.
It is merely that such economic cycles are different in character
from market cycles and probably more tied to political shifts.
 
"There is no way for the human body to ever have high-blood pressure,
 diabetes, or other such ills except for interference from the
 brain!"
                       tim sevener   whuxl!orb