The Legacy of John Maynard Keynes

Greece is simply a representation – a shining example – of the corruption and bastardisation that capitalism has undergone over the past 40 years. And at the heart of this corruption is having a monetary foundation of unsound money.[1]

It is difficult to engage in any form of economic discussion today, without encountering the ghost of John Maynard Keynes (pronounced “Kaynes”). Why is this?

In 1999, Time magazine included Keynes in their list of the 100 most important and influential people of the 20th century. His radical idea that governments should spend money they don’t have may have saved capitalism.[2]

Keynes (1883-1946) had no economic qualifications; he was a mathematician. He was an optimist in relation to what governments (when guided by experts like him), could do for economies. He believed in the necessity of governments to intervene in tough times, to “stimulate spending.” If necessary, governments should borrow money in Depressions to help to “get things going.” This he believed, would lead to more employment, flowing on to economic growth and prosperity, but he was wrong. Gary North explains:

What distinguished Keynes’ anti-recession policy was his commitment to government deficits. He viewed the capital markets as being subject to paralysis induced by fear of the future… Savers were building up monetary assets. They were not spending enough money to create opportunities for investment and expansion.

What was needed, he argued, was for government to borrow the money, guarantee a rate of interest, and then spend on anything, just so long as it creates demand for labor.

So, he concluded, the government ought to borrow money from these people and start spending. It did not matter what the government spends money for, he said. Anything will do. Even pyramids:

“Ancient Egypt was doubly fortunate, and doubtless owed to this its fabled wealth, in that it possessed two activities, namely, pyramid-building as well as the search for precious metals, the fruits of which, since they could not serve the needs of many by being consumed, did not stale with abundance. The Middle Ages built cathedrals and sang dirges. Two pyramids, two masses for the dead, are twice as good as one; but not so two railways from London to York.”[3]

He was a defender of make-work projects. As children, teachers assigned us busy work to keep us occupied. Eventually, we caught on: the work was not meaningful. It was wasting our time. Keynes advised the governments of his era to imitate our teachers:

“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 to private enterprise on well tried principles of laissez-faire to dig the notes up again.”[4]

How did Keynes violate Biblical fundamentals?

1) He implicitly encouraged governments to extend a covetous eye over what wasn’t theirs, to confiscate it for government purposes. This is a violation of Ex.20:17: “you shall not covet your neighbor’s house; you shall not covet your neighbor’s wife or his male servant or his female servant or his ox or his donkey or anything that belongs to your neighbour.”

2) He encouraged big-spending governments to engage in theft via taxation, a violation of Ex.20:15: “you shall not steal.” Bearing in mind that Australia and most other western nations commenced the twentieth century with no income tax, this has had massive implications.

When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time, a legal system that authorizes it and a moral code that glorifies it. Frederic Bastiat

3) He also encouraged governments to borrow, in violation of Prov.22:7(“…the borrower becomes the lender’s slave,”) and Ro.13:8 (“owe nothing to anyone except to love one another.”)

The whole world has been following Keynes as though he were some economic Pied Piper, since 1936. In 1971, President Nixon said, “we’re all Keynesians now.”

But what has Keynes brought us? More trouble than we could poke a stick at. The United States has so much government debt it will never be repaid, and President Obama sees no problem in borrowing and spending more! Britain, along with many European nations such as Greece are on the brink of bankruptcy, and there is little prospect of escape. Keynesian doctrine has been at the root of it all.

If ever there was a demonic interpretation of economics, Keynes had it. He was also a homosexual and a child-abuser. And this is what has led us to the brink of economic disaster in the West, today.

Every day that passes brings us closer to the day of reckoning. And that indeed is good news. But in the meantime, every day that passes also brings us one day to closer to the final failure of the current system.[5]

Conclusion: “The use of Keynesian economics has been one of the great catastrophes for economic theory in the West.”[6]

Keynes has been dead for 65 years, but his followers are still driving the train. We’re in for a rough ride down a long hill, with every Western nation on board.

Have you prepared for the de-railment?

[1] Greg Canavan, ‘How a Bear Market Works,’ “The Daily Reckoning Australia,” 15/9/2011.

[2] Source: Wikipedia

[3] Keynes’ “General Theory of Unemployment, Interest and Money,” p.131.

[4] Keynes, ibid, p.129, quoted by North, G., “Bernanke’s Warning to Congress,” 5/6/2009.

[5] Dan Denning, “The Daily Reckoning,” 14/9/2011.

[6] Dr. Steven Kates, before an Australian Senate Committee, 21/9/09.

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