Shameless self-quoting: Dan Z: the circular flow is a huge part of both my micro and macro text book, it’s stupid. David Z: what you have to ask is this: “Where does it start?” The Circular Flow Diagram doesn’t answer this question. It can’t. That’s the most fundamental problem with Keynes’ General Theory (which, I might add, wholly neglects the price mechanism…) But you also might ask why capital is considered to be homogeneous on the macro level, when it most definitely is not. And this isn’t even bringing up the problems of GDP as the primary measure of an economy, or the problem of price indices and inflators … Keynes is a limp dick. … Read entire article »

If there were a Heaven, would that its receivers understood the intrinsic evil of the State, whose livelihood is war and tyranny: If we attempt to formulate [C.S.] Lewis’ religion into a universal ethic, we might call it the universal soldier’s ethic, worded such as this: It is justified to do whatever commanded by a government authority even if the act would otherwise be a terrible evil, such as murder, and individuals do not have the authority to judge which governments are legitimate or not. … Read entire article »