acceleration, measured as thrift —Ac, and ex post acceleration Ag at the same
moment. Otherwise we don’t have the clearest test between free growth and thrift theories. Both agree that consumption can keep pace with output and capital over
time. Free growth theory asserts that they keep pace continuously.
Correlations tell the same story. Tables show that coefficients between r and g run about 1, as with the free growth index, while correlations between f and g run
about zero.
I do not claim that anyone but Mill and | has actually proposed free growth theory, nor that anyone at all has proposed thrift theory as here defined. It is my impression, not assertion, that modern consensus fits thrift theory given Harrod’s qualifier that attempted (ex ante) net saving (thrift) must not exceed the technological growth
rate (warranted growth path). My impression is that Solow and modern tradition agree, but blunt Harrod’s knife edge. Free growth theory counters that the same growth arrives costlessly when ex ante net saving/investment is held at zero. Nor do I claim that data shown in my charts and tables prove free growth theory. Rather
they demonstrate that all growth has proved free wherever measured to date.
Saving /Investment
Unlike Lord Keynes and modern tradition, I define saving and investment as synonymous from the start. | don’t strictly need either term. My “transfer in”, “unrealized output” and “plowback” arrive at the same thing. But | know I must do my best to write in a language already understood. | will usually say “investment” to
mean saving/investment, and will use Keynes’ notation I for both.
Keynes did not explicitly recognize human capital, although he very probably
understood it. He treated investment in physical capital only. I notate this I(K). I also treat investment in total capital, to be notated I(K,). Each, as in Keynes, sums depreciation recovery and “net investment”. The latter, in my treatment, is
APPENDIX A: The Argument in Notation 3/7/16 20
HOUSE_OVERSIGHT_011146