Now I come to a question that has the full flavor of the Keynesian theory:
7. Neglecting the acceleration effects, public investment directed to
useless projects enriches the country. (Answer: T)*8
Since I have not read this chapter of Tarshis' book, I do not know his
precise explanation. No doubt it is very similar to mine: governments are so
foolish that they are more likely to do good when they don't try than when
they do. This reminds me that an economist named Sir Roy Harrod resently wrote
a pamphlet in which he argued that a country (named England) was getting
impoverished beacuse there was too much useful public investment. Oddly enough,
Harrod (who wrote the offical life of Keynes) claims that Keynes would agree
with him!
Lesson 8: Not Everybody understands Keynesian Economics.
Fianlly, I want to emphaisize how important it is for the student to keep
his wits about him:
4. Farmers suffer as much in depression as do wage earners. (Answer: T －
but really F)*9
Thw wrong answer was given in the appendix, I am sure, to see if the
student had been lulled into a state of uncritical receptiveness. It stands to
reason that farmers do not suffer as much as do wage earners. For one thing,
there aren't as many farmers. For another thing, it is not very probable that
farmers suffer exactly as much as wage earners.
Lesson 9: Nobody Knows the Suffering That Farmers (And Students) Do.
*8: Ibid., p.115. It also enriches the city.
*9: Ibid., p.88.
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