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• Appendix a Critique of Böhm-bawerk’s Reasoning In Support of His Time Preference Theory
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K

Kadi, (Arabic). In Moslem countries, a judge or magistrate who exercised the judicial authority of the Sultan.

Kaleidoscopic. Characterized by an unending variety due to a constant shifting of the multitudinous elements which comprise the total.

Katastrophenhausse, (German). The “crack-up boom” (q.v.) that follows in the wake of a catastrophic inflation. See “Flucht in die Sachwerte.”

Kathedersozialisten, (German). Academic socialists, or socialists of the chair; a term applied to the university professors of the Historical School (q.v.). These German professors were opponents of the Austrian School (q.v.) in the Methodenstreit (q.v.).

Keynesians. Advocates of the policies espoused by Lord John Maynard Keynes (1883–1946), particularly those contained in his The General Theory of Unemployment, Interest and Money (1936). In general, these policies are a restatement in new terminology of a number of previously refuted economic fallacies. Keynes denied Say’s law of markets, believed general overproduction possible, disparaged savings and advocated both increased consumption and deficit spending as a remedy for recessions or depressions. His remedy for unemployment, created by the ability of politically protected labor unions to raise the wage rates of their members above those of the free market, was to lower the value of the monetary unit by credit expansion and inflation. He believed such an increase in the quantity of money would stimulate employment by increasing purchasing power which he called “effective demand.”

King, Gregory, Law of. The law attributed to Gregory King (1648–1712) who estimated that a deficiency in the wheat harvest of:

10% would raise prices by 30%

20% would raise prices by 80%

30% would raise prices by 160%

40% would raise prices by 280%

50% would raise prices by 450%

This “law” or estimate was an advance over the still more crude formulation of the quantity theory of money which held that any drop in the supply would lead to a proportional rise in prices.

Ku Klux Klan. A secret American society organized at the close of the Civil War (1861–65) for the purpose of re-establishing and maintaining local “white supremacy” in the South. During World War I, it was revived with members who were anti-Semitic and anti–Roman Catholic as well as anti-Negro. Its members dressed in white sheets and hoods, particularly when engaged in threatening or criminal acts against those who had incurred their wrath.