Definition & Reality in the General Theory of Political Economy

Thomas Colignatus

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• Publié par: cahun
• Publié le: 08 décembre 2010
• Nombre de lectures: 36
• Langue: English

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The Project Gutenberg eBook, Definition & Reality
in the General Theory of Political Economy, by
Thomas Colignatus
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Title: Definition & Reality in the General Theory of Political Economy
Author: Thomas Colignatus
Release Date: May 30, 2005 [eBook #15939]
[Most recently updated: June 12, 2005]
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***START OF THE PROJECT GUTENBERG EBOOK DEFINITION & REALITY IN THE
GENERAL THEORY OF POLITICAL ECONOMY***
Copyright (C) 2005 by Thomas H.A.M. Cool
Definition & Reality
in the
General Theory of Political Economy





Thomas Colignatus










Dutch University Press
&
Samuel van Houten Genootschap
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Prologue


The basic idea of this book is that Keynes’s General Theory is generalised even further by including endogenous
government in the model, so that we arrive at a truly general Political Economy. The world had the Great Depression
1930-1940 and has the Great Stagflation 1970-today and by including ‘stagnation in economic policy making’ in our
analysis we find a better explanation. The general theory also advises a democracy to create an Economic Supreme
Court as a separate constitutional power, next to the Legislative, Executive and Judicial branches.
This book is primarily directed at my fellow economists and it primarily gives theory and stylized facts. The colleagues
will specifically have to understand the ‘Definition & Reality methodology’ before they will appreciate that my analysis
is scientifically warranted. Much work remains to be done in practical research. And much work remains to be done by
the other professions.
Since the current imbalance of powers has many victims, it may be hoped, none the less, that the parliaments of our
democratic nations investigate the issue too, so that there is more hope for improvement in their living conditions.
Parliaments should do as Alfred Marshall (1890, 1947:3) wrote:
“Now at least we are setting ourselves seriously to inquire whether it is necessary that there should be any
socalled ‘lower-classes’ at all: that is, whether there need be large numbers of people doomed from their birth to
hard work in order to provide for others the requisites of a refined and cultured life; while they themselves are
prevented by their poverty and toil from having any share or part in that life.”
Books are more stimulating and more enjoyable to read if they are guided by questions and if they cause questions
themselves. This book has been written in the style that it provides answers and thus it must be feared to be a dull read.
It is too late to change that style. However, some questions are: (1) How is it possible that Europe has an unemployment
of about 10% for more than three decades now, and the USA the mirror image of poverty ? (2) Can we really trust our
governments ?
With this book ends a project that basically started with the Fall of the Berlin Wall in 1989. My hope is that this book
contributes to the fall of some other walls, i.e. the intangible mental ones, consisting of perceptions and conventions -
but equally confining.
Contents in Brief


Book I Introduction 11
Book II Trias Politica and Economic Supreme Court 16
Book III Economics ‘as usual’ 36
Book IV Presentations for the general public 60
Book V Methodology: Definition & Reality 69
Book VI Structural models 87
Book VII Social Choice 158
Book VIII Supportive notions 186
Book IX Reduced form 198
Book X Conclusions 216
Appendices 266










The symbol ° is used to indicate market clearing equilibrium (and possibly expectational). The symbol * or E[.]is used
·for expectations and expectational equilibrium (and possibly market clearing). The symbol °* is used for both, and for
the one or the other (and possibly both).

Contents

Book I Introduction 11
1. Order of presentation 11
2. The general theory 11
3. Methodology 14
Book II Trias Politica and Economic Supreme Court 16
4. The Trias Politica 16
th5. The economic record of the 20 century 18
6. An Economic Supreme Court 24
7. Position of the Court in economic theory 26
8. The record of economics itself 26
9. Economics ‘as usual’ and its inadequacy 30
10. Four empirical cases 32
11. The moral imperative