Modern Money

Keynes discusses the changes on society created by inflation and deflation of prices: the investing class profits less by saving during inflation, the business class must lay off workers because of deflation but gain due to inflation by paying less out of the profits earned, and the earning class faces unemployment during deflation but in a time of inflation, the earner has the opportunity to increase his livelihood. Next, Keynes says that the mere anticipation of a change in the price level can cause a change in the level of production; he believes that business should always gain or lose with fluctuating prices. Finally, Keynes concludes that deflation is worse for society because it causes a higher unemployment rate instead of just costing investors money.
I think this piece seemed to be an accurate analysis of what happened leading up to and during the depression. The observations he makes about the trends of economics and the human reaction to economics are still relevant in our society. The business man still anticipates the changing market for his product. This is understandable because everyone would attempt to minimize his own losses. What I think is one thing that has changed recently, in regards to gaining money, is that everyone is preoccupied with gaining as much as possible, or even more than is offered to them. That is why I think there is such a problem with gambling, specifically, playing the stock market. Stocks used to be purchased in support of a company or as a hopeful earning opportunity but today are treated as quick cash. People buy cheap stock when there is even a slight chance of it increasing in value, but are too impatient to wait for any trend to be established. They then sell the stock and may even lose money on it.
I agree with Keynes assumption that the economy should favor the majority working class. In an ideal system, business men would give back much to their employees as they did after the war, but today, it seems that companies and business men feel little responsibility to give back and seldom do. Companies wish to pay as little as possible, and if a company goes under, wish to pay nothing. This fact can be seen today in two ways. First, there have been several companies sharing the same fate as Enron; the company goes under with the bosses trying to escape with their money and the employees unemployed and without compensation. Second, large companies are always searching for the employee who will take less pay and fewer perks. Today so many companies are pushing for overseas jobs, and if a company doesn’t feel the need to give back with jobs than it will not give back at all.
One thing that made me think was the point that money depreciates and eliminates the possibility of a perpetual fortune. If this trend was to be kept true, money must always depreciate in value and depreciate constantly. Thinking about the average income today, people make much more today than years ago and goods cost more all the time. The price of gas is one example, as people earn more money, the price goes up only, gas is slightly different. Recently the price of gas has risen rapidly, disproportionate to the raising of wages, showing a depreciation of money at the same time as inflation in prices and making the situation seem much worse than it may actually be. Yes the price of gas is slowly outgrowing wages but the price should not be compared to gas prices in the past because the value of money is different.