Given that a basic question about money flow in such an important science as economics is unsettled to this day, can basic questions about objective reality be resolved in economics (or any subject)? Is the proper response denying the assumption that economics (or any subject) has a basic reality?

Similar to the issue I discuss below with respect to the source of profits and interest at the macroeconomic level, some scientists and others have cited the Heisenberg principle of uncertainty or indeterminacy in quantum mechanics as support for a belief in solipsism. According to this principle, both the location and momentum of a particular electron cannot be determined at the same time. Due to this lack of understanding and measurement at a basic scientific level, some scientists and others believe that the universe is irrational or unreal. Others, however, respond that epistemological problems should not lead to ontological conclusions.

Likewise, the conundrum in economics as to the source of profits and interest at the macroeconomic level is baffling to economists as a whole. A free paper on this issue, entitled “What is the Source of Profit and Interest? A Classical Conundrum Reconsidered,” by Gunnar Tomasson and Dirk J. Bezemer, dated January 29, 2010, and posted March 11, 2010, can be found online at https://mpra.ub.uni-muenchen.de/21292/. Although I have not exhaustively researched this issue or economists’ attempts to address it, of the explanations I have studied, I believe that the monetary-circuit approach of Professor Louis-Philippe Rochon most plausibly resolves the conundrum by considering that, in firms’ investment cycles, a cash outflow required for the purchase of capital goods and financed by long-term bank loans occurs in the first period of production in the investment cycle while long-term bank loans may be paid back over multiple periods of production until the end of the investment cycle.

Just as the Heisenberg principle may be fundamental to quantum mechanics, knowing the source of profits and interest at the macroeconomic level appears to get to the heart of the concept of money flow and seems fundamental to economics.

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    Your question is hard to follow, especially for people not versed in economics... But if the issue is about the lack of "consensus" about some economic theory between the economists, I do not see why this fact can support views like anti-realism or external-world skepticism. I would say: if the external world does not exists, no money, no banks, no deflation,... Thus, why bother about Wall Street, Lehman Bros crack or the (purported) fact that my banck account has disappeared ? – Mauro ALLEGRANZA Oct 2 '16 at 17:32
  • They do, on a certain level, very well know where 'the money' comes from: Bits and Bytes that come into existance by central banks granting that they will hand out RL(tm) money for it if asked. These digits are what in nuce is (monetary!) macroeconomic groth in modern times: A promise, granted by central banks. It is exactly as real as kantian rights, granted by law enforcement. If law enforcement/central banks loose their authority, Houston's got a problem. Because the reality of practice will change, not because the digits/rights become less real (ontologically). But macroeconomics is more. – Philip Klöcking Oct 2 '16 at 23:34
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    At a minimum, it seems like you could edit this question down significantly. As far as I can tell by skimming it, the question is "economist disagree about the concepts of profit/money/interest. Ergo, philosophy ???" – virmaior Oct 2 '16 at 23:35
  • In response to virmaior's comment, I note that the Philosophy Stack Exchange website states to "[p]rovide details" and "[s]hare your research" in drafting a question for the Philosophy Stack Exchange. I am hoping that, at least with respect to most readers, the background in my question helps. – shineontruth Oct 3 '16 at 0:22
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    @shineontruth to notify someone of your comments, put @ in front of their name. (1) as a matter of policy, you don't need your first and last paragraphs about "I want an answer from SE". (2) The question is still not clear to me at all after your edits. Yes, you need to provide background about questions, but here the bigger problem is that while there's a whole lot of exposition it's not entirely clear what your question about philosophy is. Make that way clearer – virmaior Oct 3 '16 at 2:46

Profit is a result of an entrepreneur using goods and services for which people would be willing to pay $x to produce stuff that is valued at some larger value $(x+y). Interest is a result of the fact that people prefer stuff now to the same stuff later. So if you want people to wait for stuff, you have to pay them.

You are not very clear about what problem you're trying to solve. For example, you don't explain what the macroeconomic level means, or how you would measure it, or why anybody should care about it. The paper you cited is also clear as mud and favourably cites Marx and Keynes while ignoring criticism of their ideas:



Does the failure to solve a badly stated, unclear problem suggest some radical conclusion about objective reality? No. It suggests that you should think more clearly. You should start by stating your problem in terms that a ten year old child could understand. If you can't do that, you need to go back to the basics of economics.

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