The main propositions which follow from definitions and axioms are listed here.  These propositions are scientifically refutable, but are tested and not yet refuted by available evidence.  Unlike axioms, these propositions would need constant testing and revision.

1. Predictions are possible in economics, but forecasts are generally not possible.

2. Net investment is the driver of economic growth.  Money or credit is necessary but not sufficient for investment.

3. There is an optimal structure of aggregate demand for maximum economic growth.

4. There is a limit to the rate of sound economic growth determined by the optimal structure of aggregate demand.

5. Sound consumption or investment should be financed only from savings or capital accumulated from economic production.

6. Excessive debt above economic growth leads to wasteful spending, diminished economic growth and destruction of capital.

7. Consumption cannot increase indefinitely faster than income without economic collapse.

8. Government can impede economic growth.  Recent data suggest a 10 percent increase in government expenditure to GDP leads to a 1.5 percent per annum average decrease in real GDP growth.

2 Responses to Propositions

  1. David Chester says:

    It has been suggested that today land is not important, because it is no longer greatly needed, except in agricultural economies. Firstly the amount of food we need to grow has not lessened so the land is still vitally necessary, even if the numbers of farmers has become less. Secondly, the land in cities (where more people are now finding work) is so much more valuable due to this concentration of society, that its importance (not its area) remains as necessary as if the population and their occupying land were elsewhere.

    • admin says:

      Agree that land is important, as it is still a means of production. Whether it is the most important asset or whether it needs to be singled out among others (as in Georgism) are not priority issues for the moment. Historically in agrarian society land ownership has been singularly important.

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