All Quotes

Question 1

«The purpose of exporting money is to enlarge our trade by enabling us to bring in more forraign wares, which being sent out again will in due time much increase our Treasure. For although in this manner wee do yearly multiply our importations to the maintenance of more Shipping and Mariners, improvement of His Majesties Customs and other benefits: yet our consumption of those forraign wares is not more than it was before; so that all the said increase of commodities…doth in the end become an exportation unto us of a far greater value.»

Answer 1

Thomas Mun. England’s Treasure by Forraign Trade. 1664

Question 2

«Instead of using only comparative and superlative words, and intellectual arguments, I have taken the course…to express my self in terms of number, weight or measure; to use only arguments of sense, and to consider only such causes, as have visible foundations in nature.»

Answer 2

William Petty. Political Arithmetick. 1690.

Question 3

«Productive expenditure is employed in agriculture, grasslands, pastures, forests, mines, fishing, etc., in order to perpetuate wealth in the form of corn, drink, wood, livestock, raw materials for manufactured goods, etc. Sterile expenditure is on manufactured commodities, house-room, clothing, interest on money, servants, commercial costs, foreign produce, etc.»

Answer 3

Francois Quesnay. Tableau Economique. 1758.

Question 4

«[M]anufactures encrease the power of the state only as they store up so much labour, and that of a kind to which the public may lay claim, without depriving any one of the necessaries of life. The more labour, therefore, is employed beyond mere necessaries, the more powerful is any state; since the persons engaged in that labour may easily be converted to the public service. In a state without manufactures, there may be the same number of hands; but there is not the same quantity of labour, nor of the same kind. All the labour is there bestowed upon necessaries, which can admit of little or no abatement.»

Answer 4

David Hume. Political Discourses. of Commerce. 1752.

Question 5

«Money is not, properly speaking, one of the subjects of commerce; but only the instrument which men have agreed upon to facilitate the exchange of one commodity for another. It is none of the wheels of trade: It is the oil which renders the motion of the wheels more smooth and easy. If we consider any one kingdom by itself, it is evident, that the greater or less plenty of money is of no consequence; since the prices of commodities are always proportioned to the plenty of money, and a crown in Harry VII ’s time served the same purpose as a pound does at present.»

Answer 5

David Hume. Political Discourses. of Money. 1752.

Question 6

«The nature of demand is to encourage industry. And when, it is regularly made, the effect of it is, that the supply for the most part is found to be in proportion to it, and then the demand is commonly simple. It becomes compound from other circumstances. As when it is irregular, that is, unexpected, or when the usual supply fails;… [this] occasions a competition among the buyers, and raises the current, that is, the ordinary prices.»

Answer 6

Sir James Steuart. Principles. of Trade and Industry. 1767.

Question 7

«The principle of self-interest will serve as a general key to this inquiry; and it may, in one sense, be considered as the ruling principle of my subject, and may therefore be traced throughout the whole. This is the main spring, and only motive which a statesman should make use of, to engage a free people to concur in the plans which he lays down for their government… [w]ere every one to act for the public, and neglect himself, the statesman would be bewildered, and the supposition is ridiculous.»

Answer 7

Sir James Steuart. Principles. of Trade and Industry. 1767.

Question 8

«[Though] among the different members of the society there should be no mutual love and affection, the society, though less happy and agreeable, will not necessarily be dissolved. Society may subsist among different men, as among different merchants, from a sense of its utility, without any mutual love or affection; and though no man in it should owe any obligation, or be bound in gratitude to any other, it may still be upheld by a mercenary exchange of good offices according to an agreed valuation.»

Answer 8

Adam Smith. Moral Sentiments. of the utility of this constitution of Nature. 1759.

Question 9

**«I have seen a small manufactory of this kind where ten men only were employed, and where some of them consequently performed two or three distinct operations. But though they were very poor, and therefore but indifferently accommodated with the necessary machinery, they could, when they exerted themselves, make among them about twelve pounds of pins in a day. There are in a pound upwards of four thousand pins of a middling size. Those ten persons, therefore, could make among them upwards of 48,000 pins in a day. Each person, therefore, making a tenth part of 48,000 pins, might be considered as making four thousand eight hundred pins in a day. But if they had all wrought separately and independently, and without any of them having been educated to this peculiar business, they certainly could not each of them have made 20, perhaps not one pin in a day; that is, certainly, not the two hundred and fortieth, perhaps not the four thousand eight hundredth part of what they are at present capable of performing, in consequence of a proper division and combination of their different operations.»

Answer 9

Adam Smith. Wealth of Nations. 1776.

Question 10

«In the progress of the division of labour, the employment of the far greater part of those who live by labour […] comes to be confined to a few very simple operations; frequently to one or two. But the understanding of the greater part of men are necessarily formed by their employments. The man whose life is spent in performing a few simple operations, of which the effects, too, are always the same, or very nearly the same, has no occasion to exert his understanding. […] He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become. […] In every improved and civilised society this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall, unless government takes some pains to prevent it..»

Answer 10

Adam Smith. Wealth of Nations. 1776.

Question 11

«Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniences and amusements of human life. But once there is a thorough division of labour, it is but a very small part of these with which a man’s own labour can supply him. The far greater part of them he must derive from the labour of other people, and he must be either rich or poor according to the quantity of that labour which he can command, or which he can afford to purchase. The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities.»

Answer 11

Adam Smith. Wealth of Nations. 1776.

Question 12

«When the price of any commodity is neither more nor less than what is sufficient to pay the rent of the land, the wages of the labour, and the profits of the stock employed in raising, preparing, and bringing it to market, according to their natural rates, the commodity is then sold for what may be called its natural price.»

Answer 12

Adam Smith. Wealth of Nations. 1776.

Question 13

«That part of the annual produce, which, […] is destined for replacing a capital, is not only much greater in rich than in poor countries, but bears a much greater proportion to that which is immediately destined for constituting a revenue either as rent or as profit.»

Answer 13

Adam Smith. Wealth of Nations. 1776.

Question 14

«The consideration of his own private profit, is the sole motive which determines the owner of any capital to employ it either in agriculture, in manufactures, or in some particular branch of the retail trade.»

Answer 14

Adam Smith. Wealth of Nations. 1776.

Question 15

«The increase of stock, which raises wages, tends to lower profit. When the stocks of many rich merchants are turned into the same trade, their mutual competition naturally tends to lower its profit and when there is a like increase of stock in all the different trades carried on in the same society, competition must produce the same effect in them all.»

Answer 15

Adam Smith. Wealth of Nations. 1776.

Question 16

«It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.»

Answer 16

Adam Smith. Wealth of Nations. 1776.

Question 16

«Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view. But the study of his own advantage naturally, or rather necessarily leads him to prefer that employment which is most advantageous to society… He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was not part of his intention.»

Answer 16

Adam Smith. Wealth of Nations. 1776.

Question 17

«It is worthwhile to remark that a product is no sooner created than it, from that instant, affords a market for other products to the full extent of its own value. When the producer has put the finishing hand to his product, he is most anxious to sell it immediately, lest its value should diminish in his hands. Nor is he less anxious to dispose of the money he may get for it; for the value of money is also perishable. But the only way of getting rid of money is in the purchase of some product or other. Thus the mere circumstance of creation of one product immediately opens a vent for other products.»

Answer 17

Jean-Baptiste Say. Traité d’économie politique. 1803.

Question 18

«[under the Poor Laws, the poor were] subjected to a set of grating, inconvenient, and tyrannical laws, totally inconsistent with the genuine spirit of the constitution…utterly contradictory to all ideas of freedom…[and adding] to the difficulty of those struggling to support themselves without assistance»

Answer 18

Thomas Robert Malthus. Essay on Population. 1798.

Question 19

«I think I may fairly make two postulata. First, That food is necessary to the existence of man. Secondly, That the passion between the sexes is necessary, and will remain nearly in its present state. . . . Assuming, then, my postulata as granted, I say, that the power of population is indefinitely greater than the power in the earth to produce subsistence for man. Population, when unchecked, increases in a geometrical ratio. Subsistence only increases in an arithmetical ratio. A slight acquaintance with numbers will show the immensity of the first power in comparison with the second.»

Answer 19

Thomas Robert Malthus. Essay on Population. 1798.

Question 20

«The number of labourers also being above the proportion of the work in the market, the price of labour must tend toward a decrease; while the price of provisions would at the same time tend to rise. The labourer therefore must work harder to earn the same as he did before. During this season of distress, the discouragements to marriage and the difficulty of rearing a family are so great, the population is at a stand. In the meantime the cheapness of labour, the pleanty of labourers, and the necessity of an increased industry amongst them, encourage cultivators to employ more labour upon their land; to turn up fresh soil and to manure and improve what is already in tillage; till ultimately the means of subsistence become in the same proportion of the population as at the period from which we set out.»

Answer 20

Thomas Robert Malthus. Essay on Population. 1798.

Question 21

«First, and mainly, That quality of the earth, by which it can be made to yield a greater portion of the necessaries of life than is required for the maintenance of the persons employed on the land. Secondly, That quality peculiar to the necessaries of life of being able, when properly distributed, to create their own demand, or to raise up a number of demanders in proportion to the quantity of necessaries produced. And, Thirdly, The comparative scarcity of fertile land, either natural or artificial.»

Answer 21

Thomas Robert Malthus. Principles. 1820.

Question 22

«I am convinced, that the substitution of machinery for human labour, is often very injurious to the interests of the class of labourers. My mistake arose from the supposition, that whenever the net income of a society increased, its gross income would also increase; I now, however, see reason to be satisfied that the one fund, from which landlords and capitalists derive their revenue, may increase, while the other, that upon which the labouring class mainly depend, may diminish, and therefore it follows, if I am right, that the same cause which may increase the net revenue of the country, may at the same time render the population redundant, and determine the condition of the labourer.»

Answer 22

David Ricardo. Principles. 1821.

Question 23

«The farmer and manufacturer can no more live without profit, than the labourer without wages. Their motive for accumulation will diminish with every diminution of profit, and will cease altogether when their profits are so low as not to afford them an adequate compensation for their trouble, and the risk which they must necessarily encounter in employing their capital productively.»

Answer 23

David Ricardo. Principles. 1821.

Question 24

«If, therefore, by the extension of foreign trade, or by improvements in machinery, the food and necessaries of the labourer can be brought to market at a reduced price, profits will rise. If, instead of growing our own corn, or manufacturing the clothing and other necessaries of the labourer, we discover a new market from which we can supply ourselves with these commodities at a cheaper price, wages will fall and profits rise; but if the commodities obtained at a cheaper rate, by the extension of foreign commerce, or by the improvement of machinery, be exclusively the commodities consumed by the rich, no alteration will take place in the rate of profits.»

Answer 24

David Ricardo. Principles. 1821.

Question 25

«If one of two things commands, on the average, a greater value than the other, the cause must be that it requires for its production either a greater quantity of labour, or a kind of labour permanently paid at a higher rate; or that the capital, or part of the capital, which supports that labour must be advanced for a longer period; or lastly, that the production is attended with some circumstance which requires to be compensated by a permanently higher rate of profit.»

Answer 25

John Stewart Mill. Essay on some Unsettled Questions. 1844.

Question 26

«It appears to me impossible but that the increase of intelligence, of education, and of love of independence among the working classes, must be attended with the corresponding growth of the good sense which manifests itself in provident habits of conduct, and that population, therefore, will bear a gradually diminishing ratio to capital and employment.»

Answer 26

John Steward Mill. Principles. 1848.

Question 27

«I know not why it should be matter of congratulation that persons who are already richer than anyone needs to be, should have doubled their means of consuming things which give little or no pleasure except as representatives of wealth. […] It is only in the backward countries of the world that increased production is still an important object.»

Answer 27

John Stewart Mill. Principles. 1848.

Question 28

«[…] by classical Political Economy, I understand that economy which, since the time of W. Petty, has investigated the real relations of production in bourgeois society in contradistinction to vulgar economy, which deals with appearances only, ruminates without ceasing on the materials long since provided by scientific economy, and there seeks plausible explanations of the most obtrusive phenomena, for bourgeois daily use, but for the rest, confines itself to systematising in a pedantic way, and proclaiming for everlasting truths, the trite ideas held by the self-complacent bourgeoisie with regard to their own world, to them the best of all possible worlds.»

Answer 28

Karl Marx. Das Kapital. Volume 1. 1867.

Question 29

«The labouring population […] produces, along with the accumulation of capital produced by it, the means by which itself is made relatively superfluous, is turned into a relative surplus population, and it does this to an always increasing extent. This is a law of population peculiar to the capitalist mode of production; and in fact every special historic mode of production has its own special laws of population, historically valid within its limits alone. An abstract law of population exists for plants and animals only, and only in so far as man has not interfered with them.»

Answer 29

Karl Marx. Das Kapital. Volume 1. 1867.

Question 30

«The introduction of power looms into England probably reduced by one half the labour required to weave a given quantity of yarn into cloth. The hand-loom weavers, as a matter of fact, continued to require the same time as before: but for all that, the product of one hour of their labour represented after the change only half an hour’s social labour, and consequently fell to one-half its former value.»

Answer 30

Karl Marx. Das Kapital. Volume 1. 1867.

Question 31

«[A]ll commodities, as values, are realized human labour, and therefore commensurable, that their values can be measured by one and the same special commodity, and the latter converted into the common measure of their values, i.e. into money.»

Answer 31

Karl Marx. Das Kapital. Volume 1. 1867.

Question 32

«If the quantity of unpaid labour supplied by the working class, and accumulated by the capitalist class, increases so rapidly that its conversion into capital requires an extraordinary addition of paid labour, then wages rise, and, all other circumstances remaining equal, the unpaid labour diminishes in proportion. But as soon as this diminution touches the point at which the surplus-labour that nourishes capital is no longer supplied in normal quantity, a reaction sets in: a smaller part of revenue is capitalized, accumulation lags, and the movement of rise in wages receives a check.»

Answer 32

Karl Marx. Das Kapital. Volume 1. 1867.

Question 33

«Along with the constantly diminishing number of magnates of capital, who usurp and monopolize all advantages of this process of transformation, grows the mass of misery, oppression, slavery, degradation, exploitation; but with this too grows the revolt of the working class, a class always increasing in numbers, and disciplined, united, organized by the very mechanism of the process of capitalist production itself. The monopoly of capital becomes a fetter upon the mode of production, which has sprung up and flourished along with, and under it. Centralization of the means of production and socialization of labour at last reach a point where they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.»

Answer 33

Karl Marx. Das Kapital. Volume 1. 1867.

Question 34

«To me it seems that our science must be mathematical, simply because it deals with quantities. Wherever the things treated are capable of being greater or less, there the laws and relations must be mathematical in nature. The ordinary laws of supply and demand treat entirely of quantities of commodity demanded or supplied, and express the manner in which the quantities vary in connection with the price. In consequence of this fact the laws are mathematical.»

Answer 34

William Stanley Jevons. Theory of Political Economy. 1871.

Question 35

«The value of a given quantity of a particular good of higher order… is equal to the importance of the satisfactions provided for by the portion of the product that would remain unproduced if we were not in a position to command the given quantity of the good of higher order. [I]t is evident that the value of the goods of higher order is always and without exception determined by the prospective value of the goods of lower order in whose production they serve.»

Answer 35

Carl Menger. Principles. 1871.

Question 36

«We shall seldom need to consider the degree of utility except as regards the last increment which has been consumed, or, which comes to the same thing, the next increment which is about to be consumed. I shall therefore commonly use the expression final degree of utility, as meaning the degree of utility of the last addition. [T]he degree of utility […] decreases as that quantity increases.»

Answer 36

William Stanley Jevons. Theory of Political Economy. 1871.

Question 37

«Accordingly, in every concrete case, of all the satisfactions secured by means of the whole quantity of a good at the disposal of an economizing individual, only those that have the least importance to him are dependent on the availability of a given portion of the whole quantity. Hence the value to this person of any portion of the whole available quantity of the good is equal to the importance to him of the satisfactions of the least importance among those assured by the whole quantity and achieved with an equal portion.»

Answer 37

Carl Menger. Principles. 1871.

Question 38

«How could these economists prove that the results of free competition were beneficial and advantageous if they did not know just what these results were? And how could they know these results when they had neither framed definitions nor formulated relevant laws to prove their point? […] the fact that economists have often extended the principle of free competition beyond the limits of its true applicability is proof positive that the principle has not been demonstrated.»

Answer 38

Leon Walras. Elements of Pure Economics. 1874.

Question 39

«The system of new quantities manufactured and new prices […] is closer to equilibrium than the previous one, and it is necessary only to continue the tatonnement in order to approach it more and more closely. In equilibrium, prices are those at which the quantities demanded and supplied of each service or product are equal, and for which, moreover, the price of each product is equal to its average cost of production.»

Answer 39

Leon Walras. Elements of Pure Economics. 1874.

Question 40

«…a good mathematical theorem dealing with economic hypotheses was very unlikely to be good economics: and I went more and more on the rules – (1) Use mathematics as a shorthand language, rather than as an engine of inquiry. (2) Keep them till you have done. (3) Translate into English. (4) Then illustrate by examples that are important in real life. (5) Burn the mathematics. (6) If you can’t succeed in 4, burn 3.»

Answer 40

Alfred Marshall. Letter to Bowley. 1906.

Question 41

«[…] good management is shown by so adjusting the margins of suspense on each line of expenditure that the marginal utility of a shilling’s worth of goods on each line shall be the same. And this result each one will attain by constantly watching to see whether there is anything on which he is spending so much that he would gain by taking a little away from that line of expenditure and putting it on some other line.»

Answer 41

Alfred Marshall. Principles. 1890.

Question 42

«It is not true that the spinning of yearn in a factory, after allowance has been made for the wear-and-tear of the machinery, is the product of the labour of the operatives. It is the product of their labour, together with that of the employer and subordinate managers, and of the capital employed; and that capital itself is the product of labour and waiting; and therefore the spinning is the product of labour of many kinds, and of waiting. If we admit that it is the product of labour alone, and not of labour and waiting, we can no doubt be compelled by inexorable logic to admit that there is no justification of interest, the reward of waiting; for the conclusion is implied in the premiss.»

Answer 42

Alfred Marshall. Principles. 1890.

Question 43

«In fact when the production of a commodity conforms to the law of increasing return in such a way as to give a very great advantage to large producers, it is apt to fall almost entirely into the hands of a few large firms; and then the normal marginal supply price cannot be isolated on the plan just referred to, because that plan assumes the existence of a great many competitors with businesses of all sizes, some of them being young and some old, some in the ascending and some in the descending phase. The production of such a commodity really partakes in a great measure of the nature of a monopoly; and its price is likely to be so much influenced by the incidents of the campaign between rival producers, each struggling for an extension of territory, as scarcely to have a true normal level.»

Answer 43

Alfred Marshall. Principles. 1890.

Question 44

«The recent history of fluctuations of general credit shows much variety of detail, but a close uniformity of general outline. In the ascending phase, credit has been given somewhat boldly, and even to men whose business capacity has not been proved. For, at such times a man may gain a profit on nearly every transaction, even though he has brought no special knowledge or ability to bear on it; and his success may probably tempt others of like capacity with himself, to buy speculatively. If he is quick to get out of his ventures, he probably makes a profit. But his sales hasten a fall of prices, which must have come in the course of time. Though the fall is likely to be slight at first; yet each downward movement impairs the confidence which had caused the rise of prices, and is still giving them some support. The fall of a lighted match on some thing that smoulders has often started a disastrous panic in a crowded theatre.»

Answer 44

Alfred Marshall. Money, Credit and Commerce. 1923.

Question 45

«[…] the collective ownership of the means of production would deaden the energies of mankind, and arrest economic progress; unless before its introduction the whole people had acquired a power of unselfish devotion to the public good which is now relatively rare. And […] it might probably destroy much that is most beautiful and joyful in the private and domestic relations of life. These are the main reasons which cause patient students of economics generally to anticipate little good and much evil from schemes for sudden and violent reorganization of the economic, social and political conditions of life.»

Answer 45

Alfred Marshall. Principles. 1890.

Question 46

«[when the money rate is below the natural rate] saving will be discouraged and for that reason there will be an increased demand for goods and services for present consumption. In the second place [since the real rate- the marginal efficiency of capital-depends only on real factors, which have not changed] the profit opportunities of entrepreneurs will thus be increase. […] Owing to the increased income thus accruing to the workers, landowners, and the owners of raw materials, etc., the prices of consumption goods will begin to rise, the more so as the factors of production previously available are now withdrawn for the purposes of future production. Equilibrium in the market for goods and services will therefore be disturbed. As against an increased demand in two directions there will be an unchanged or even diminished supply, which must result in an increase in wages (rent) and, directly or indirectly, in prices.»

Answer 46

Johan Gustaf Knut Wicksell. Lectures on Political Economy. 1906.

Question 47

«There is a certain rate of interest on loans which is neutral in respect to commodity prices, and tends neither to raise nor to lower them. This is necessarily the same as the rate of interest which would be determined by supply and demand if no use were made of money and all lending were effected in the form of real capital goods. It comes to much the same thing to describe it as the current value of the natural rate of interest on capital.»

Answer 47

Johan Gustaf Knut Wicksell. Interest and Prices. 1898.

Question 48

«[…] As a matter of fact all argument in favour of free competition rests on one tacit assumption, which, however, corresponds but little to reality, namely that from the beginning all men are equal. If that were so, everyone would be equipped with the same working power, the same education and, above all, the same economic assets, and much could then be said in favour of free, unhampered competition; each person would have only himself to blame if he did not succeed. But if all conditions are basically unequal, if some people have good hands from the beginning and others hold only low cards, free competition does nothing to stop the former from winning every trick while the latter pay the table.»

Answer 48

Johan Gustaf Knut Wicksell. Alliances between Workers and Employers. 1902.

Question 49

«The effort of the economist is to "see," to picture the interplay of economic elements. The more clearly cut these elements appear in his vision, the better; the more elements he can grasp and hold in his mind at once, the better. The economic world is a misty region. The first explorers used unaided vision. Mathematics is the lantern by which what before was dimly visible now looms up in firm, bold outlines. The old phantasmagoria disappear. We see better. We also see further.»

Answer 49

Irving Fisher. Theory of Value. 1892.

Question 50

«It is clear that if the unit of length were changed and its change were foreknown, contracts would be modified accordingly […] To alter the mode of measurement does not alter the actual quantities involved, but merely the numbers by which they are represented. […] We thus see that the farmer who contracts a mortgage in gold is, if the interest is properly adjusted, no worse off and no better off than if his contract were in a ‘wheat’ standard or a ‘multiple’ standard»

Answer 50

Irving Fisher. Appreciation and Interest. 1896.

Question 51

« […] in practice, general over-production, as popularly imagined, has never, so far as I can discover, been a chief cause of great dis-equilibrium. The reason, or a reason, for the common notion of over-production is mistaking too little money for too much goods. While any deviation from equilibrium of any economic variable theoretically may, and doubtless in practice does, set up some sort of oscillations, the important question is: Which of them have been sufficiently great disturbers to afford any substantial explanation of the great booms and depressions of history?»

Answer 51

Irving Fisher. The debt-deflation theory of great depressions. 1933.

Question 52

«What is the problem we wish to solve when we try to construct a rational economic order? On certain familiar assumptions the answer is simple enough. If we possess all the relevant information, if we can start out from a given system of preferences, and if we command complete knowledge of available means, the problem which remains is purely one of logic. This, however, is emphatically not the economic problem which society faces. And the economic calculus which we have developed to solve this logical problem, though an important step toward the solution of the economic problem of society, does not yet provide an answer to it. The reason for this is that the “data” from which the economic calculus starts are never for the whole society “given” to a single mind which could work out the implications and can never be so given.»

Answer 52

Friedrich August von Hayek. The Use of Knowledge in Society. 1945.

Question 53

«There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.»

Answer 53

Friedrich August von Hayek. The Road to Serfdom. 1944.

Question 54

«The ignorance of even the best-informed investor about the more remote future is much greater than his knowledge, and he cannot but be influenced to a degree which would seem wildly disproportionate to anyone who really knew the future, and be forced to seek a clue mainly here to trends further ahead. But if this is true of the best-informed, the vast majority of those who are concerned with the buying and selling of securities know almost nothing whatever about what they are doing. They do not possess even the rudiments of what is required for a valid judgement, and are the prey of hopes and fears easily aroused by transient events and as easily dispelled.»

Answer 54

John Maynard Keynes. A Treatise on Money. 1930.

Question 55

«Say’s law, that the aggregate demand price of output as a whole is equal to its supply price for all volumes of output, is equivalent to the proposition that there is no obstacle to full employment.»

Answer 55

John Maynard Keynes. The General Theory. 1936.

Question 56

«It is impossible to study the notions to which the mercantilists were led by their actual experiences, without perceiving that there has been a chronic tendency throughout human history for the propensity to save to be stronger than the inducement to invest. The weakness of the inducement to invest has been at all times the key to the economic problem..»

Answer 56

John Maynard Keynes. The General Theory. 1936.

Question 57

«But this decision having been made, there is a further decision which awaits him, namely, in what form he will hold the command over future consumption which he has reserved, whether out of his current income or from previous savings. Does he want to hold it in the form of immediate, liquid command (ie in money or its equivalent)? Or is he prepared to part with immediate command for a specified or indefinite period, leaving it to future market conditions to determine on what terms he can, if necessary, convert deferred command over specific goods into immediate command over goods in general? In other words, what is the degree of his liquidity-preference.»

Answer 57

John Maynard Keynes. The General Theory. 1936.

Question 58

«It is not a case of choosing those [faces] that, to the best of one's judgment, are really the prettiest, nor even those that average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees.»

Answer 58

John Maynard Keynes. The General Theory. 1936.

Question 59

«[…] the influence of moderate changes in the rate of interest on the propensity to consume is usually small. It does not mean that changes in the rate of interest have only a small influence on the amounts actually saved and consumed. Quite the contrary. The influence of changes in the rate of interest on the amount actually saved is of paramount importance, but is in the opposite direction to that usually supposed. For even if the attraction of the larger future income to be earned from a higher rate of interest has the effect of diminishing the propensity to consume, nevertheless we can be certain that a rise in the rate of interest will have the effect of reducing the amount actually saved.»

Answer 59

John Maynard Keynes. The General Theory. 1936.

Question 60

«There is the possibility...that, after the rate of interest has fallen to a certain level, liquidity-preference may become virtually absolute in the sense that almost everyone prefers cash to holding a debt which yields so low a rate of interest. In this event the monetary authority would have lost effective control over the rate of interest. But whilst this limiting case might become practically important in future, I know of no example of it hitherto..»

Answer 60

John Maynard Keynes. The General Theory. 1936.

Question 61

«Whilst, therefore, the enlargement of the functions of government, involved in the task of adjusting to one another the propensity to consume and the inducement to invest, would seem to a nineteenth century publicist or to a contemporary American financier to be a terrific encroachment on individualism, I defend it, on the contrary, both as the only practicable means of avoiding the destruction of existing economic forms in their entirety and as the condition of the successful functioning of individual initiative. For if effective demand is deficient, not only wasted resources intolerable, but the individual bring these resources into action is operating him.»

Answer 61

John Maynard Keynes. The General Theory. 1936.

Question 62

«If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coal-mines which are then filled up to the surface. with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering the leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.»

Answer 62

John Maynard Keynes. The General Theory. 1936.