Simple Keynesian Theory, Part 1

Feb 8, 2013 by

deanProgressive liberals use Keynes like Stalin used Marx

By Dean Kalahar

February 8, 2013

Whether they honor his ideas or are just using his name to support a big government command and control agenda; progressive liberals are either openly radical, or blissfully ignorant regarding their allegiance to their economic spiritual leader, John Maynard Keynes. (Cains)

Who is this man that defines the intellectual base of the progressive economic philosophy? In this first of a two part series we will spotlight Keynes the radical. In part two, we will document Keynes’s classical economic beliefs and point out how his philosophies do not align with today’s liberal economic agenda.

John Maynard Keynes was an intellectually inconsistent man who played loose with economic principles. He had no problem of articulating and supporting a set of steadfast core economic doctrines on one hand and then offer up their antitheses with equal conviction on the other. Some might regard him as being more interested in elevating himself as a visionary than actually having a visionary philosophy. Eloquent, and at times aligned with the progressive movement, his stature has been exploited by those who want to solidify economic power in the central government.

Keynes believed at times that capitalism was an ill and that society could do better. He railed against fundamental market precepts and despised the use of a negative human nature to propel man forward. Keynes wanted to end the free market system and replace it with a totalitarian system packaged as a utopian dream.

“When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money-motive at its true value. The love of money as a possession — as distinguished from the love of money as a means to the enjoyments and realities of life — will be recognised for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease … But beware! The time for all this is not yet. For at least another hundred years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still.” –The Future, Essays in Persuasion, 1931.

In short, capitalism is an evil mental health disorder that must be cured; yet to destroy it we must be covert and act as if we believe in free markets.

“For my part I think that capitalism, wisely managed, can probably be made more efficient for attaining economic ends than any alternative system yet in sight,” –The End of Laissez-faire,1926.

Concerning his love of socialism Keynes remarked:

“Socialism must always remain a portent to the historians of Opinion — how a doctrine so illogical and so dull can have exercised so powerful and enduring an influence over the minds of men, and, through them, the events of history.” -The End of Laissez-faire, 1926.

It might be eerily noted that we are approaching the 100 year blueprint for Keynes plan. If one is looking, it would seem that the current administration is taking their signals right out of the Keynes playbook as they push a radical anti free market policy at warp speed.

Keynes also pushes for a totalitarian state and shows his disregard for Adam Smith’s laissez faire free market in, The General Theory of Employment, Interest, and Money, 1935.

“Nevertheless the theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state, than is the theory of the production and distribution of a given output produced under conditions of free competition and a large measure of laissez-faire.”

He continues his condescension to classical economic theory by advancing the idea that the government can simply print money to create economic activity. His words are both clever and stunningly ignorant at the same time.

“If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coal mines which are then filled up to the surface with town rubbish, and leave it private enterprise on well tried principals of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is.”

In essence, Keynes says that by simply printing money the treasury (through public works projects) can end unemployment, increase wealth, and create economic growth. Unfortunately he ignores the necessity for productivity and actually serving one’s fellow man by meeting needs in a world of scarcity.

Continuing further, Keynes all but comes out and calls for a government to take direct control over the economy as he says the state is more efficient at organizing the economy than the principles of the free market.

“I expect to see the State, which is in a position to calculate the marginal efficiency of capital goods on long views and on the basis of the general social advantage, taking an ever greater responsibility for directly organizing investment;”

When he spoke as a radical his allegiance was clear.

“Well the only course open to me is to be buoyantly Bolshevik” -Letter to mother; Keynes’s Theory Seventy-five Years later, Edited by Thomas Cate.

If John Maynard Keynes is the darling of the progressive left, they ought to have the guts and intellectual integrity to admit they are radicals that wish to end capitalism as we use to know it. Otherwise, they might want to actually get a clue as to what they are talking about and who they are canonizing.

Progressive liberals, who use Keynes like Stalin used Marx, might want to think about the 62 million Russians who were murdered under the Union of Soviet Socialist Republic’s economic plan.

Print Friendly, PDF & Email

Related Posts


Share This

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.