Keynes and horticulture

I recently encountered a neat little dialog written by JP Hochbaum entitled "If Keynesians and Austrians were horticulturists."

I don't draw the same conclusions from it that he does, but I admire the brio he brought to his analogy, and I've done my best to hijack it below.

I haven't gotten his permission to quote it at length, so I won't. The gist of it is that the Keynesian wisely wants to water the dying plants. The Austrian economist (supposed to be the butt of the analogy) wants to rely on the natural water cycle, allowing the plants to die if they don't get rain.

"We need to wait for the sky to give us rain."

Now think about this ... isn't the Austrian in the right, even given the terms of Hochbaum's analogy? I think of the plants in question as capital investments of various sorts. So some investments succeed (grow and bloom), some investments fail (shrivel and die). Any investment should be allowed to fail. There should be no guaranteed successes in these matters.

The "water" would seem to be the supply of credit, considered as wealth, measured as money.

The dialog reminded me of certain horticultural/historical facts. The human species has an unfortunate tendency to bring high-consumption plants into areas where water is scarce. Someone who lived in New England all his working life might move to Arizona after retirement. When there, he might well try to recreate the sort of lawn he considered natural and proper back home. A big expanse of water-dependent grass.

In Phoenix, this sort of behavior is a resource misuse. So “bravo” to the Austrian for reprimanding our newly retired Keynesian.

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