For a very long time, I have strived to elaborate a genuine General Theory of the Economy which has been deemed the Monetary Circuit (or Circulation) approach. Its founding cornerstone is the Principle of Essentiality of Money. It leads to the fundamental distinction between two kinds of economic systems :
The Non Monetary Economics The Monetary Economics
Money doesn't exist because it is not
Money exists because it is
their existence condition. their existence condition
Barter of course never existed.
It is a logical impossibility.
Model : The Pure Command Economy Model : The Pure Capitalist Economy
Because of this approach I delved into history (including history
of economic thought but always its historical context), philosophy, logic
etc. When in the works mentioned in this site I use formalisation, it is
always a simple one. It is not so because I am against the so-called "high
mathematics" but because I do not think it could be fruitful for the research
I have started, but I am quite open-minded on this question (I could say
the same for
"high econometrics". As any reader will discover, since the start, I have been interested into pure economic theory because I believed that it is the prerequisite for a general theory of economic policy leading to a genuine
full-employment policy. The reader is also to discover that I endeavoured to prove that most (if not all) the so-called constraint on economic policy are imaginary or self-imposed ones rooted into ignorance of the principles of modern economies and hidden choices.
To illustrate my purpose I invite the reader to begin the tour of
this site by discovering the philosophical dialogues and an unknown true
precursor of the General Theory.
From an idea of Henri Sader, we wrote together two philosophical dialogues in the fashion of the 18th century during summers 1999 and 2000. The first dialogue introduces Socrates striving to explain to his student Amphytrion why fiscal conservative Athenian politicians are wrong. They ignore the secret of modern banking in Babylon financing by the issue of notes both international trade and a large share of the Great king expenditures.
The second dialogue introduces one of the greatest minds that ever lived, Ibn Khaldun, striving to explain the laws of finance to an envoy from the bankrupt King of France. With explicit reference to the economic part of Ibn Khaldun masterpiece Prolegomenas and Universal History. Ibn Khaldun reveals himself as a genuine precursor of the Theory of the Monetary Circuit, much more Keynesian than Keynes ever was. He had already discovered that the true good prince increases the wealth of his people by his sole outlays while being free from any constraint in the amount of his expenditures.
To the dialogues I add the reference to an unknown precursor of Keynes'
General Theory discovered by Henri Sader. It is the introduction of the
book "Les Nouveaux Principes d'Economie Politique" by Max-Fr Vanlerberghe
published in 1857 (!) Brussels (Librairie de Tarride) and Tournai (Imprimerie
de Malo). Pages X and XI of this introduction spell out the Keynesian Principle
of the Multiplier even in its algebraic aspect (the leakage factor being
obviously the propensity to save!).
I translate the most interesting part:
"What is the true limit to general prosperity? It is the number of people earning money. An increase in this number generates more consumption which generates more output which generates a rise in equipment, land available for agriculture and ultimately population.....
The rise in consumption (resulting from the increase in the number of people earning money) generates a new increase in this number. This second increase determines a second rise in consumption which generates a third rise in the number of people earning money generating a third increase in consumption etc..
Those increases follow a decreasing geometrical progression because rich people do not increase their consumption by an amount equal to the rise of their income. Here is an example of this diminishing geometrical progression: 1000, 900, 810, 751, etc... Because of the leakage from consumption, the terms of the progression decrease in each round by an amount of ten per cent"