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11. Money and Its Purchasing Power

17. Further Fallacies of the Keynesian System

In the text above, we saw that even if the Keynesian functions were correct and social expenditures fell below income above a certain point and vice versa, this would have no unfortunate consequences for the economy. The level of national money income, and consequently of hoarding, is an imaginary bogey. In this section, we shall pursue our analysis of the Keynesian system and demonstrate further grave fallacies within the system itself. In other words, we shall see that the consumption function and investment are not ultimate determinants of social income (whereas above we demonstrated that it makes no particular difference if they are or not).

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