Matt Forstater quotes one of Keynes's most confusing (or confused?)  
arguments:  
 
"An act of individual saving means- so to speak- a decision not to have 
dinner today.  But it does _not_ necessitate a decision to have dinner or 
to buy a pair of boots a week hence or a year hence or to consume any 
specified thing at any specified date.  Thus it depresses the business of 
preparing to-day's dinner without stimulating the business of making ready 
for some future act of consumption.  It is not a substitution of future 
consumption-demand for present consumption-demand, -it is a net dimunition 
of such demand.  Moreover, the expectation of future consumption is so 
largely based on present consumption that a reduction in the latter is 
likely to depress the former, with the result that the act of saving...may 
reduce present invstment-demand as well as present consumption-demand...In 
any case...an individual decision to save does not, in actual fact, involve 
the placing of any specific forward order for consumption, but merely the 
cancellation of a present order." (1964[1936]: 210-11). 
 
There's more good stuff there, with words like 'absurd', 'specious' and 
'fallacy' used to describe the idea that "current investment is promoted by 
individual saving to the same extent as present consumption is diminished", 
but my fingertips are starting to hurt." 
 
Along with Ric Holt, Keniv Quinn, and Mary Schweitzer, he wants still  
to downplay the primacy of savings in the process of growth.  I have  
just found out that my article "A Paradox of Thrift or Keynes's  
Misrepresentation of Saving in the Classical Theory of Growth?"  
(Southern Economic Journal, Vol. 62, July 1995, pp. 16-33) is now on  
library shelves.  In that article I lay out Keynes's confusion with  
classical usage of terms such as saving, investment, and capital, and  
why his claim that there is such a thing as a paradox of thrift is  
incorrect.  (I deal with the quote cited by Matt on p. 23ff, having  
laid out the classical argument on saving and growth on pp. 18-22.)  I  
also document how unsuccessfully Keynes's contemporaries such as  
Robertson, Hawtrey, and Pigou tried to point out his  
confusion to him (pp. 28-29). 
 
I can only invite those who believe in the validity of the paradox of  
thrift to take a look.  Perhaps they themselves might get an article  
or a note out of their efforts.  On the other hand, they might well  
be impressed with how incredibly wrong Keynes was!  
 
James Ahiakpor 
CSUH, Hayward  
[log in to unmask] 
(510) 885-3330