The Chimera of Macroeconomics

Through the last couple of decades in the 20 th century, “ outsourcing ” was one of the buzz words in business. The implication: More often than not, “buy” from outside was more efficient (M ∙ U ∙ T -1 ) than “make” it inside, notwithstanding “ the Nature of the Firm .”              At any rate, “Rational People Think as the Margin.” Subject to: ① the fully-functioning machine is the marginal unit, as opposed to the infinitesimal thereof; ② the divide between “to invest or not to invest” is the rate of return 2% PA; ③ “make or buy” is a judgement call after thinking at the margin .   Free to choose. At the capital budgeting , the firm has, again, two alternatives, insourcing the machine and outsourcing the machine. Likewise is upon internal construction; that is, renting it in and selling it out.              In the Republic on the basis of free will a...

  Opening a text book on Principles of Economics, one of the first things we come across is “Supply.” Fact one, the supply is at the marginal cost of production. Fact two, the value of cost is accounted for in the sovereign currency unit .              Fact three, the supply schedule of the product exists with no regard to the Demand and a price. The price would be the opportunity “benefit” per unit in compensation for all the money and time spent for the supply. It’s more or less “weird” that no economist has ever referred to opportunity benefit , the mirror image of opportunity “cost.” Again, the article “the” means the single highest value of all opportunities forgone.              Such a narrative as the opportunity cost of “liquidity preference” is the interest rate is fatally misleading. To most everyone other than a macroeconomist, the opportunity ...