Keynesian alchemy
2009-01-17 · Original WordPress address
When chemist discovered alchemist were cranks and one couldn't actually turn lead to gold, what were the policy implications?
When the king asked his alchemists-turned-chemists for gold, did the chemists continue the alchemist's line --- "I can turn 1 pound of lead into 1.5 pounds of gold!" --- or did they have the guts to share with him their new found truth that you can't get something for nothing?
Did kings have to learn graduate level chemistry before they stopped asking for gold or did their advisors grow spines?
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Perhaps the chemists didn't have faith that their new science was correct. Why upset the king with the truth if you don't believe it either?