Who Were the Sea Peoples?

Mr. LOVEDAY then points out that for various reasons these financial rigidities have increased. "In recent years, the joint- stock system, under names varying with the law in different countries, has replaced to a constantly increasing extent the more personal enterprise. . . . Gradually with the growth of the big industrial concern, with the extension of the multiple shop . . . a greater and greater proportion of the population has been thrust out of positions of direct, independent control into the mass of wage-earning and salaried classes. Such persons can no longer invest in themselves; to the extent that they play for safety or apparent safety, and give preference to fixed-interest-bearing obligations over profit-sharing equities, they inevitably add to the rigidity of the financial system. Many forces have induced them to prefer safety to profit..." -- Prosperity and Depression , p. 117 Wilhelm Röpke referred to the treatment for this as the "de-proletarianizati...

"The [substitution] principle states that higher relative prices tend to discourage and lower relative prices encourage the use of a commodity or service. [Demand curves slope downward.] "If the principle of substitution is sufficiently strong, then decentralized markets are reliable tools for allocating output to households and input to businesses. However, in financial and capital-asset markets, in which speculative and conjectural elements are powerful, the principle of substitution does not always apply. A rise in the relative prices of some set of financial instruments or capital assets may very well increase the quantity demanded of such financial or capital assets. A rise in price may thus breed conditions conducive to another such rise." -- Hyman Minsky, Stabilizing an Unstable Economy , p. 106