- Registration time
- Last login
- Online time
- 363 Hour
- Reading permission
KEYNESIAN ECONOMIST FOLLOWERS TOTALL F**KED THE WHOLE WORLD.|
Guru Intoxication: Keynes as Shaman and Drug Dealer
John Maynard Keynes (1883-1946) was the famous British economist who advanced the provocative notion that governments could and should smooth out the business cycle by manipulating the supply of money. This was to be accomplished by creating new currency (easy enough to do since every modern government has gone off the gold standard), and by directly spending it. Or by creating new money and lending it out at zero interest or by borrowing money against a promised prosperity in the future, and by directly spending it. Of course when countries play the borrowing game they create “sovereign debt”. They tend to collaterize these loans with the promise that the sovereign will use its taxing power -or fiat money creation power as a last resort. How is that working out?
Reality check: Ultimately, all sovereigns must pay the borrowed money back, not because their debtors can sue them but because when their credit-worthiness falls into question, only fools will lend them more. Note here that the Chinese are not fools.
KEYNES WAS NO MAGICIAN
Here is a short description of Keynes’ theory, excerpted from the “Concise Encyclopedia of Economics” — available on the web “Library of Economics and Liberty”:
“Keynes’s General Theory revolutionized the way economists think about economics. It… introduced the notion of aggregate demand as the sum of consumption, investment, and government spending; and … that full employment could be maintained only with the help of government spending…Why shouldn’t government, thought Keynes, fill the shoes of business by investing in public works and hiring the unemployed? The General Theory advocated deficit spending during economic downturns to maintain full employment.”
The most foolish thing Keynes ever advocated (and – to be fair – later partly retracted) was his example that full employment can be attained by burying money and employing people to dig it up.
“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 (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.” The General Theory of Employment, Interest and Money by John Maynard Keynes (1935).
Keynesian economic theory is a spectacular 21st century failure due to the operation of three factors, all of which have been recently demonstrated in the laboratory of real world experience:
(1) The utter lack of discipline of popular democracies, whose politicians are ever seduced by the promise of a free fiscal lunch;
(2) the profound impact of the world economy, the monetary effects of which are fully capable of swamping local currency and money supply policies, and;
(3) The complete incompetence of government bureaucracies when it comes to the creation of wealth-generating enterprises.
The edifice of Keynesian-derived policy among the Western democracies has been discredited. That which remains should be cautiously implemented by clear eyed economists and political leaders who have undergone reality therapy.