Comments on economics, mystery fiction, drama, and art.

Tuesday, May 20, 2008

Keynes on Speculation

Sounds like the current tribulations in housing markets:

"Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. The measure of success attained by Wall Street, regarded as an institution of which the proper social purpose is to direct new investment into the most profitable channels in terms of future yield, cannot be claimed as one of the outstanding triumphs of laissez-faire capitalism…."

Found on Mark Thoma's blog, cited by him from a post by Tim Duy. The quote itself is from The General Theory..., p. 159.


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