ABSTRACT
The essential mechanism is a “perfect” capital market in which it is possible to borrow and lend without restriction. “The rate of interest will be such as to equalize the demand for loans with the supply of them. The actual preferences of the Dums and the Dees as revealed in the market-place are shown in the centre column. They signal an increase in the desire for Leisure relative to Consumption and Real Wealth. Classical theology simply ignores the actual market signals and replaces them with assumptions invented to prove its own conclusions. The false inference is motivated by the need to justify Classical religious convictions. The Act of Faith lies in assuming what is to be proved, namely, that demand does not fall. Incorporation of this false assumption into the analysis from the outset is the nature of the “Classical Distortion”.
