JK Galbraith….

On the floating currency:
The term [floating currency] is a fraud. Economists and Central Bankers invented the reference to floating currency when instability in the exchange rates become inevitable. With prices rising at different rates in different countries, there was no chance for stability in the rate at which different currencies were exchanged. That was inconvenient. But what was inevitable and inconvenient could be improved by giving it a better name. So instead of speaking of currency instability and unpredicitability or disorder or chaos, the term “floating currency” was invented. The public heard the monetary experts & authorities speaking with wonderful solemnity of “the float” & imagined that they had found something new. They hadn’t. They were in a bad storm and called it atmospheric ventilation.

On Unemployment:
Unemployment is always less evident in an agricultural economy. People divide up what work there is, and work less hard. Disguised unemployment replaces the open statistical unemployment of the industrial economy and factory system.

On Price Controls:
When prices are generally fixed, inflation manifests itself not in higher prices, but in longer queues, longer lines waiting for scarce goods (remember the License Raj?)

Income & Inflation:
It has been been proposed that there be a specific differential between the lowest-paid worker & the highest paid executive. Sooner or later, there will probably be some such rule….Income causes inflation and therefore must be restrained.

On Monetary Policy:
Monetary policy is a natural & legitimate expression of conservatism. If you are not concerned about unemployment, if you don’t like trade unions, and if you prefer large business over small business that depend on borrowed money, you should be in favour of monetary policy. Umm….

On Education:
All education increases mobility.


Posted on March 29, 2005, in Uncategorized. Bookmark the permalink. 3 Comments.

  1. People divide up what work there is, and work less hard.

    Seems fine to me. How hard should someone work anyway?

  2. Arun,

    Can you please mail me your email address at suman.karumuri@gmail.com.
    I can post the message here but i did not think it was appropriate.

    Sorry for the intrusion.


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