measure its change (net investment) at book? And isn’t it better to measure the effectiveness of thrift with neither the lag nor the well-known problems of book
depreciation?
I will show the math of my simultaneous rates method in Chapters 4 and 5. Chapter 4 reasons from the Y =C +] equation, even though I don’t accept it, while Chapter 5 translates findings into the new version I do accept. Charts and tables show both versions for all eight countries reported, over all years reported, and run the averages. The thrift index, or ratio of the supposed cost to actual growth, averages zero. I found it best to show separate charts for each country by each of the two versions of the Y = C + I equation and by each of three levels of denominator- screening (none, then two progressively wider screens). Other charts track other data that seemed informative. That explains why charts take up so much of this
book.
This completes my first survey of free growth theory and its support in the data. Chapters 4 and 5 will cover the same ground again from new perspectives. So it will be with other themes of this book and other chapters. My problem is to sell unfamiliar ideas, although not necessarily new ones, and in somewhat unfamiliar language too. My “simultaneous rates method”, yet to be clarified, is an example. | use the standard language of economics where I can, but must sometimes tweak words or coin them. We will see that in Chapter 3. I try to cope with that double challenge - unusual ideas in unusual terms - by the same strategy of restatement
from new perspectives until all fits together.
Fixing the Y =I + C Equation
If] had any sense, I would pretend to accept the Y = 1 + C equation as Mill and all other economists seem to do. Then I could have done with only half as many charts, and made this a book about free growth only. Any fool knows that a book should pick a focus. The data confirming Mill’s idea would have made a spectacular finale.
Why undermine my own case by questioning his assumptions? So I should probably
Chapter 2: Fast Forward 1/06/16 10
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