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Showing posts from May, 2023

Futurity pg. 429-438 (9) discount and price

 In this section, Commons starts by again trying to clarify the mistakes made by Macleod.  The banker in making a profit moves in one transaction to lend and create money for debtor and then receive a profit at the end of that period as enforcement of the duty to pay the debt is enforced.  The merchant makes money via two transactions whereby there is a buying price for the inputs and a selling price for the outputs.  Unlike the banker, these are two separate negotiated transactions. Commons turns to the importance of a lapse of time versus a flow of time which he will continually emphasize throughout this chapter. A lapse of time relates to a debt and debt payment.  There is a specified time where an amount must be repaid to a lender at a specified rate of interest.  A flow of time is the recognition of profit as a merchant tries to gain forma  number of buying and selling transactions over time. The final section talks about the impact of the bank di...

Commons Futurity pg. 423-429 subsection (7) and (8)

  Subsection (7) from incorporeal to intangible property and subsection (8) commodity market and debt market This subsection 7 starts with a good summary of Commons thinking, "the institutional set-up gives us the idea of a going concern acting by means of inducements to participants in their forecasts of working, waiting, and risking, under rules that set limits to their bargaining, managerial, and rationing transactions. "(Commons. pg 423, 1034).  A going concern is looking forward to transacting with other going concerns ( broadly defined). and here we get to a key point for Commons. The going plant, the production function in modern economics terminology, is churning out the goods and services under technical efficiency of the managerial transaction. The going concern and the going plant are interrelated but also separable in their thinking and operations. This is a point he empathizes many times throughout the book. The going concern deals with scarcity and the changing ...

Commons Futurity pg. 420-423 - intangible property

 The next subsection we are covering is (7) intangible property.  Commons felt that Macleod made a mistake by calling intangible property as incorporeal property.  He then goes through a series of definitions to clarify what Macleod meant:  “annual income for ever”  = the expected products for one's own use or the money income from future sales of the products, or future “ground rent.”  “His credit” =  is not a particular credit against a debtor, but is the general “good credit” of a business man, that is, the good-will of investors and bankers who are expected to be willing to lend to him by buying his promises to pay.  “The good-will” = expected profitable transactions with customers.  “The practice” = the good-will of a lawyer's clients or a physician's patients, willing to pay for his services.  Copyrights and patents  = expectations of preferential or monopolistic sales-incomes.  “The shares”  = commercial company are...

Commons Futurity pg. 414-420

  This post refers to pages pg. 413-420 (4) exchangeability and (5) Double meaning of credit Subsection 4 is fairly brief and is mostly Commons defining again that Macleod made economics about exchange and that value was derived by the two parties mutually in the exchange process. He also re-emphasizes the point that exchange is the derivation of value as opposed to production with the orientation of classical economics like Smith and Ricardo. Subsection 5 is in a way a fairly complicated section but is intended by Commons to show the errors that MacLeod made. These errors meant that economists did not take him seriously and to their discredit did not follow the important advances that Macleod did in fact make.  Macleod used the term for one thing when it should have been separated into two things.  Credit can be future sales of product or output and credit can be payment of a debt.  The first one is intangible property and the second one is incorporeal property. Mac...