Briefly, the reason is that hypothetical thought experiments provide a way of mentally isolating a causal, explanatory, or logical factor for examination on its own which normally, in the real world, cannot be isolated, and to do so while still discussing a concrete situation.
David Hume once came up with this thought experiment: suppose that in the middle of the night, the money in everyone's wallet, safe, or other stash, suddenly doubled in quantity - so there is twice as much money, but no other changes are made. Would the country then suddenly be enormously better off - would we all be twice as wealthy as we are now? No, in fact we would have exactly the same amount of wealth as we presently do, for there would be exactly the same amount of capital around, and the same availability of labor. (Everyone could then double their prices.) What this shows is that increases in the money supply do not translate to increased wealth; it can also be used to explain why increases in the money supply cause inflation.
Of course, such a scenario is impossible: all our money cannot magically double in quantity. But that is not the point. The reason the thought experiment is useful is that this way of thinking of it enables you to mentally isolate just the one factor desired for consideration: the quantity of money. We imagine just the quantity of money changed and nothing else. In the real world, one cannot do this. In the real world, it is not possible to change the money supply uniformly (i.e. increasing everyone's money, without redistribution) and it is impossible to change the money supply without affecting the economy in some other way at the same time. So I cannot cite a historical case in which nothing but the money supply was altered. This is why thought experiments are useful.
The fact the the big "Trusts" come up with studies saying the opposite is that they have been pro communism for along time.
David Hume once came up with this thought experiment: suppose that in the middle of the night, the money in everyone's wallet, safe, or other stash, suddenly doubled in quantity - so there is twice as much money, but no other changes are made. Would the country then suddenly be enormously better off - would we all be twice as wealthy as we are now? No, in fact we would have exactly the same amount of wealth as we presently do, for there would be exactly the same amount of capital around, and the same availability of labor. (Everyone could then double their prices.) What this shows is that increases in the money supply do not translate to increased wealth; it can also be used to explain why increases in the money supply cause inflation.
Of course, such a scenario is impossible: all our money cannot magically double in quantity. But that is not the point. The reason the thought experiment is useful is that this way of thinking of it enables you to mentally isolate just the one factor desired for consideration: the quantity of money. We imagine just the quantity of money changed and nothing else. In the real world, one cannot do this. In the real world, it is not possible to change the money supply uniformly (i.e. increasing everyone's money, without redistribution) and it is impossible to change the money supply without affecting the economy in some other way at the same time. So I cannot cite a historical case in which nothing but the money supply was altered. This is why thought experiments are useful.
The fact the the big "Trusts" come up with studies saying the opposite is that they have been pro communism for along time.
