If farming were to be organised like the stock market, a farmer would sell his farm in the morning when it was raining, only to buy it back in the afternoon when the sun came out.
Interpretation
The quote critiques the irrationality of market speculation compared to the more stable, grounded nature of farming.
John Maynard Keynes uses this metaphor to illustrate how wildly unpredictable and sometimes absurd the financial markets can be. He contrasts this with the more practical and measured approach seen in farming, suggesting that if farmers acted like stock traders, they would make hasty decisions based on transient conditions rather than sound judgment, highlighting the folly of treating essential activities like farming with the same speculation and volatility as the stock market.
In practice
In a discussion about market volatility, one might use this quote to illustrate irrational trading behavior.
As time goes on, I get more and more convinced that the right method of investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes.
The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is generally understood. Indeed, the world is ruled by little else.
The disruptive powers of excessive national fecundity may have played a greater part in bursting the bonds of convention than either the power of ideas or the errors of autocracy.
We will not have any more crashes in our time.
This long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.
The book, as it stands, seems to me to be one of the most frightful muddles I have ever read, with scarcely a sound proposition in it beginning with page 45 [Hayek provided historical background up to page 45; after that came his theoretical model], and yet it remains a book of some interest, which is likely to leave its mark on the mind of the reader. It is an extraordinary example of how, starting with a mistake, a remorseless logician can end up in bedlam.
The public firm can nowhere maintain itself in free competition with the private firm; it is possible today only where it has a monopoly that excludes competition. Even that alone is evidence of its lesser economic productivity.
My agency in promoting the passage of the National Bank Act was the greatest financial mistake of my life. It has built up a monopoly, which affects every interest in the country. It should be repealed, but before that can be accomplished, the people will be arrayed on one side and the banks on the other, in a contest such as we have never before seen in this country.
Wealthy Americans who benefit hugely from a system rigged in their favor react with hysteria to anyone who points out just how rigged the system is.
Capital is money, capital is commodities. By virtue of it being value, it has acquired the occult ability to add value to itself. It brings forth living offspring, or, at the least, lays golden eggs.
I am a huge bull on this country. We will not have a double-dip recession at all. I see our businesses coming back almost across the board.
Inequality has risen to the point that it seems to me worthwhile for the U.S. to seriously consider taking the risk of making our economy more rewarding for more of the people.
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