August 15, 2015

Stupid or duplicitous? Both!

Comment on Kristjan on ‘What is it with economists and accounting identities?’


You say: “I don't have to understand what profit is to say that Keynes is correct. Just like government deficit equals private sector surplus in a closed economy. I don’t have to understand what profit is to state that this is correct.”

It is not necessary to stress it two times that you don't have to understand what profit is. After all, you are an economist and the others, too, don't understand it.

In any case, Keynes didn't. “His Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson and Bezemer, 2010, pp. 12-13, 16), see also (2011)

It is pretty obvious that you do not understand the essence of the market economy if you do not understand profit. And, to paraphrase Wren-Lewis's unintended self-portrait: who cannot tell the difference between income and profit is stupid or duplicitous or both.*

Egmont Kakarot-Handtke

Kakarot-Handtke, E. (2011). Keynes’s Missing Axioms. SSRN Working Paper Series, 1841408: 1–33. URL
Tómasson, G., and Bezemer, D. J. (2010). What is the Source of Profit and Interest? A Classical Conundrum Reconsidered. MPRA Paper, 20557: 1–34. URL

* See ‘Mental messies and loose losers