LewRockwell.com is running my most recent commentary on the Real Bills Doctrine of Antal Fekete, An Error in Fekethmetic. The main point of contention between the Austrians and the Feketians is the question of whether savings and only savings are necessary to fund production, or whether real bills can substitute. On this point, I will quote a particularly insightful email that I received from a reader of one of my other articles on this topic:
I have been following the other defenders of RBs and I am not surprised at the "mental" blocks of logic. I remember, when I was in a position of desiring to have "reality" be something else than it was. I was trying to get a business going and having "credit" (as opposed to "savings") needs, to fund the development (production) process, I was in those same shoes as those RB supporters. Finally, I had to have a perspective shift and allow new partners into the business, so we could use their savings; but this meant a dilution of my anticipated financial gains; a bitter pill (unmet expectations) but one I am better for swallowing. This is what needs to happen to those RB supporters, one cannot have the cake and eat it too. Till they make that perspective shift, all your accurate and precise reasoning is in vain. I know, I was there, I was blind; till I saw the light...I put myself in the shoes of those with savings and realized that if I were them, I wouldn't part with my savings until I had control of the business either.
