Saving “the Market” out of Cambridge: “From Here to Eternity”

 

Here on Earth. For each and every one of us, the time (duration) in Here is limited to 125 years at the longest. As a natural consequence, the time is the most fundamental currency of us who are no macroeconomist. To paraphrase, anything valuable is the “output” of time spent, currently (“product”) or in the past (“asset”), in its creation (T-1) by some of us.

             The market trade is nothing but an exchange of the thing (“M” for mass in dimension denotation) between values (U for utility value in dimension) as appreciated by the two parties. The product in the form of a good or a service must have some value (M∙U). The invisible hand would not let a value-free product in the market. There is no place for the so-called “real quantities,” after all.

             For the sake of convenience in trade across the commonwealth (L-2 L for length), we use legal tender (and its derivatives) as the medium of exchange (U∙M). In other words, the currency unit, as opposed to legal tender, is the “unit of account” for value (U).  

             Now, what do we mean by “economy”? At the very base, it is our effort to create the maximum value of utility per period (M∙U∙T-1). The speed is no less important than the gross achievement or “value added.” Nay, the winner in the race is defined of the speed, never the aggregate distance.

             On the other hand, the "moment" has never existed in reality since before the time began. “The time” of the clock is no more than a temporal spot of conception or “speculation” (to J.S. Mill). More specifically, we say “at the moment” but mean “as of a short period wherein no change of substance takes place.” In terms of geometry, sharing a point or a spot is the same as non-sharing at all. Pretty much the same of “moment” as for an organism: The organism keeps changing incessantly in reality as opposed to speculation thereof.

In Eternity (T0). Across the River (L-1), the time stops lapsing or otherwise irrelevant. All that matters therein is the "gross" performance with the speed completely irrelevant.  

 

Let us revisit Cambridge macroeconomics supposedly envisioned for our life in Here.  

1)     The Cambridge Quantity equation of money demand: M= k∙P∙Y

There can be, if ever, only one equalizing of M as at a "moment" to Y per long year.

             To the rest of us, the two sides of the equation would practically never be equal!   

2)     The LM curve: Where is it?  A dot? "Never and nowhere" on Earth!

3)     The IS-LM model: What is that for? Of no use on Earth!

4)     The AS-AD model where P is the annual average ex post and Y over the year ex ante: When is the Golden Cross????

5)     The Solow growth model: How soon will the economy get 1.001 times greater????

 

A Compromise for the sake of our rest: All of us will eventually (T0) have the answers (M∙U) in our hands.


My Place In The Sun

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