Saturday, February 21, 2009

The Keynes of Marx; the brother Groucho that is

An old blog post of mine over at Mises.org. It has relevance today.

While watching the classic comedy
Animal Crackers, I laughed as Groucho Marx – playing the character Captain Spaulding – engaged a gentleman named Chandler in a very funny Marxian discussion of inflation and fiat money:
The nickel today is not what it was fifteen years ago. Do you know what this country needs today?...A seven-cent nickel. Yessiree, we've been using the five-cent nickel in this country since 1492. Now that's pretty near a hundred years' daylight saving. Now, why not give the seven-cent nickel a chance? If that works out, next year we could have an eight-cent nickel. Think what that would mean. You could go to a newsstand, buy a three-cent newspaper and get the same nickel back again. One nickel carefully used would last a family a lifetime! (from Filmsite.org)


Note the absurd application of a Keynesian Money Multiplier effect, where inflation allows a carefully spent nickel to last a lifetime. Of course, the gentleman falls for the muddled logic and obfuscation, responding, "Captain Spaulding, I think that is a wonderful idea." One wonders if the Chandler character isn't simply a composite sketch of the typical congressman.

Oh, if life was only so easy.

No comments: