A proven lack of economic know-how

In March 1981, after the first decade of guessing about the reasons for stagflation, the Nobel Memorial Prize Winner for Economics in 1978, Professor Herbert A. Simon of the Mellon-Carnegie University in Pittsburgh PA made, during a conference, organized by the Dutch Government, the following remarks about this phenomenon of Stagflation: (Sluggish economic growth coupled with a high rate of inflation and unemployment.)

Stagflation and the same counts for our stagnating growth of productivity form an illustration of the great significance of the economic know-how, or rather the lack of it, with some of the most serious problems and with that feeling of impotence in regard to the solution of these problems.

and further:

Stagflation that combination of unemployment and decrease in value of money, a combination that presses our noses into the lacunae in our knowledge about the process of the economy.

Both statements were, of course, made in English. However, we read them in a report about this conference in the Dutch language and translated them again back into English. Therefore, the original phrasing may have been a little bit more American. However, it shows clearly that even the leaders in the economic science were, and still are, totally unaware of the destructive working of the disastrous quality of the capital in circulation.

The consequences of the statements of Herbert A. Simon resulted in an extensive research. The first question that we tried to answer was:

Stagflation