From time to time, it is a good idea to remind yourself what it is that Keynes actually believed, and there’s no better place than his final chapter of The General Theory (http://www.marxists.org/reference/subject/economics/keynes/general-theory/ch24.htm), in which he presents his view, at once vitriolic and uncomprehending concerning laissez-faire but politely stepping away from recommending full-scale socialism in all things.
His goal is “transmuting human nature,” not managing it — though this claim if ridiculous on its face, since it is presumably impossible to change one element into another, as in attempted alchemy, without managing it.
You will also find here his bonkers view that the state can abolish the interest rate with the stroke of a pen and thereby guarantee full employment. Of course this means the “euthanasia of the rentier” who wickedly exploits such inconvenient facts as the scarcity of capital. Still, nothing short of the “socialisation of investment” is needed finally to bring utopia. A good start, he writes, would be very high taxes on the rich.
Won’t all of this change the incentive structure of society? Sure, he admits, but not enough to make a difference anyone should care about.
I’m sorry, but reading this guy again just gives me the chills. I can easily imagine his dispassionately narrating events in a Gulag, justifying every horror with a pseudo-scientific rationale made up on the spot.
Oh wait: he did do that. As he wrote in the 1936 foreword to the German edition of The General Theory: “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 production and distribution of a given output produced under conditions of free competition and a lance measure of laissez-faire.”
The Hazlitt evisceration should never have been necessary but I’m glad he did it.
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Hazlitt’s “Failure of the New Economics” is one of the best books I’ve ever read. It’s the only book that I’ve ever read that’s a line by line refutation of another book. Can you imagine all of the work it took to write that book? Absolutely amazing.
Keynes was basically calling for more government control while ignoring the fact that there were government controls and that they have unintended consequences to the economy. It is hardly different than what some contemporary economists (to say the least of politicians, business people, and journalists) are calling for. Keynes’s thoughts are only original in the sense that he wrote them in a book that got cited by several economists and the media. But I sense that statement doesn’t make him justice.
AJ, I agree it must have taken a ton of Hazlitt’s time (not to mention patience!) to write the line-by-line refutation of Keynes’ garbled and inconsistent theory.
The part that stuck out to me in “Failure of New Economics” is near the end where Hazlitt wonders aloud whether or not Keynes’ General Theory was an enormous exercise in satire. If only we were so lucky…
Keynes, and current U.S. officials, forget to realize that oppression of any people will only go so far, and free thought and action will prevail as proven throughout history. Just ask look at the American history of the Irish, African-Americans, and Oriental people, which where the most oppressed people in American, and, possibly World history.
And as many of us know, when society retains any level of freedom to act, Free Market fundamentals and principles will trump any amount of Gov’t invention….
It’s a good thing that we have a voluntary income tax system here in the United States.
@ehmoran – good points. The only thing right now preventing Leviathan collapsing from its own size is time.
Heh – the government needs to learn a quote from Star Wars, “The more you tighten your grip, Tarkin, the more star systems will slip through your fingers.”
That’s why its illegal to own guns in the District of Comlumbia.
And they thought the Million Man march was Big.
Let’s see, they’ll be Whites, Orientals, African-Americans, Native Americans, Rednecks, Bubbas, Indians, Yankees, Southerners, Jews, Christians, Buddhists, (not sure about Muslims, their Leaders need to voice what they truly believe in, Individual Freedom or Societal Oppression) and other such Old School Patriotic Americans. (I don’t mean to exclude any other individuals or groups). Roughly about 100 million people, and all with guns and knives, oh yeh, and ROPES.
P.S. You can blame the Grouping Mentality on the pseudo Science of Psychology. (Gees, maybe that’s where “prejudicism” comes from?)
“His goal is “transmuting human nature,” not managing it — though this claim if ridiculous on its face, since it is presumably impossible to change one element into another, as in attempted alchemy, without managing it.”
Isn’t this distinction (transmuting/managing) ‘human nature’ largely a facetious semantic play at looking ‘right’ about something (‘human nature’) that is not really so easy to pin down as to justify the semantic quibble in the first place? On this level of generality, you have made no meaningful claims, and only a clumsy attempt at wordplay…
Weird echoes of Nietzsche, minus the sheen of eloquence: “Thus I deny morality as I deny alchemy, that is, I deny their premises…” (Daybreak).
Part III
The State will have to exercise a guiding influence on the propensity to consume partly through its scheme of taxation, partly by fixing the rate of interest, and partly, perhaps, in other ways. Furthermore, it seems unlikely that the influence of banking policy on the rate of interest will be sufficient by itself to determine an optimum rate of investment. I conceive, therefore, that a somewhat comprehensive socialisation of investment will prove the only means of securing an approximation to full employment; though this need not exclude all manner of compromises and of devices by which public authority will co-operate with private initiative.
Whoa. Now the bank nationalization becomes scary to me.
Well yeh. Just the other day I was listening to a Politician (D) rehashing the plan to control 401k’s. But the Gov’t will promise you 3 to 4% return on investment. I guess the other retirement program (Social Security) didn’t provide enough tax money to Washington.
Now, if I’m not mistaken, 3 to 4% isn’t even close to Real Inflation.
Wow, were do I sign up for that retirement security.
Do you guys and gals ever feel like the Little Dutch Boy?
@Justin:
I’ve been thinking the same thing all week about the bank nationalization.
A PRIME EXAMPLE of CAPITALISM at WORK and its GOODNESS in SOCIETY and ECONOMICS
Most Written Media are going bankrupt, and some TV Media sources are having severe financial difficulties.
During this past election, many of the Written Media and some TV Media channels did not inform the public in an unbiased fashion and this political prejudice and bias has recently been recognized by the educated and learned readers.
Society has selected them for corporate and economic extinction for their inability to provide free-choosing people with the product they demanded.
Amazing that Fox News, the Wall Street Journal, the Washington Post, and other similar reporting companies are not experiencing the same problems.
This is why these near extinct Media outlets, like GE, the New York Times, and others, want Socialism; they need Gov’t intervention and support for their Financial Survival because the people have REJECTED their BILE and refuse to participate.
From “Liberalism: History and Future”:
To be capitalist or to be socialist? — that is the question. Precisely what is the mix of the mixed economy? When is it capitalist and when is it socialist? When does it protect property and when does it confiscate it? When does it leave people alone and when does it coerce them? When does it adhere to the ethics of individualism and when does it obey the code of collectivism? And just which is the metaphysical primary — the individual or the collective (e.g., the nation, the race, the class)? The fundamental truth about the mixed economy is that mixed practices imply mixed principles, which in turn imply mixed premises — i.e., an incoherent grasp of reality. With socialism, the chaos was economic; with “social democracy,” it’s epistemological. Ultimately, the latter can no more generate rational policies than the former could generate rational prices.
The mixed economy doesn’t present us with a mosaic portrait of the just society,
but with a jigsaw of pieces taken from different puzzles.
FOR THE REST OF THE ARTICLE, CLICK HERE
If you look here:
http://www.truthandpolitics.org/top-rates.php
It seems to me that there have been much higher tax rates for the rich (over 90% from 1950-63) without turning the economy upside down. In fact you could almost draw the conclusion that high tax rates not a problem at all when looking at the GDP corrected for CPI graph here: http://www.valueinvest.org/27.html
you can see that growth has been quite steady since the mid 1930′s.
Apolitical Political Commentary!
Friday, February 27, 2009
Destructive Keynes and Marx!
Although there are many ego-driven interventionists it would be difficult to find one who is as perfectly intertwined with all of its narcissism and political perversions as John Maynard Keynes. Keynes is the archetype ego-driven interventionist and any and all speculation that he did not really intend to dismantle economic theory is just one more piece of evidence that his forked-tongue fooled the foolish.
Just like Marx, whose ego consumed him and drove him to attack the divine institution of the economy, so too Keynes could only see himself and like Gollum, he convinced himself that he was the one to hold the ring. So he devised a plan and seduced the politicians (which he knew was the easiest thing in the world to accomplish). He was the ‘eye’ that knew the true ego-driven nature of the politicians.
These horrible ego-driven maniacs – Marx and Keynes – intended to destroy civilization for one reason: they were consumed by their ego.
Why are people unaware of their criminal minds? Well, their followers molded an education system that does their bidding.
But truth is sought and what is now becoming increasingly evident to everyone is that Marx and Keynes were charlatans. Rid them and their systems and their agents from modern thinking and then the diseases caused by their immorality will go with them into the dustbin of economic ignorance.
My understanding is that Keynes was the only economist who made money in the Free Market.
So, if this is true, then Keynes used Free Market fundamentals and principles with minimum Gov’t Intervention to make his profit on a system that worked and decided, with his ego, to make changes as he saw necessary because, possibly, the little guy could actually invest and rise above the toilet he was in without Gov’t assistance and welfare..
I think it’s telling that the link about Keynes is from marxists.org.
Even more alarming is the way Australia’s PM worships Keynes:
http://www.smh.com.au/opinion/dead-economists-society-may-be-way-to-save-our-own-20090227-8k7n.html
Are we headed for the following:
NOVO-OGARYOVA, Russia, Feb 27 (Reuters) – Russian Prime Minister Vladimir Putin warned opposition critics on Friday not to use the economic crisis as an excuse to challenge his government and told them to abide by the law.
Unrest across Russia over economic upheaval has been muted, with the biggest protests so far taking place in the Far East port of Vladivostok where hundreds were arrested in January demonstrations over car tax.
Speaking at a meeting with leaders of Russia’s dominant political party, United Russia, ahead of regional elections this weekend, Putin said that criticism of the Russian government during a crisis was allowed, but only within the laws.
“If opposition actions go outside the law, it means they are not pursuing the goals of improving people’s lives, but their own selfish goals and the state has the right to defend itself properly,” Putin said at his residence outside Moscow.
Russia has tight controls that restrict opposition groups from holding rallies or marches without official sanction. Applications from groups like chess grandmaster Garry Kasparov’s ‘Other Russia’ movement are frequently rejected.
Putin and other senior Russian officials have criticised “people’s revolutions” in ex-Soviet Georgia and Ukraine which propelled pro-Western leaders to power through street protests.
“We won’t allow events to happen like in some other countries, to which I will not point a finger now. At the same time, we won’t limit lawful forms of protest,” Putin said.
This will blow you MINDS:
“Abstract
This paper reexamines the issue of international financial capital mobility, which has become today’s economic orthodoxy. The policy discussion is often framed in terms of the impossible trinity. That framing distorts discussion by representing capital mobility as having equal significance with sovereign monetary policy and control over exchange rates. It also distorts discussion by ignoring possibilities for coordinated monetary policy and exchange rates, and for managed capital flows. The case for capital mobility rests on neo-classical economic efficiency arguments and neo-liberal political arguments. The case against capital mobility is based on Keynesian macroeconomic inefficiency arguments, neo-Walrasian market failure arguments, and neo-Marxian arguments regarding distortion of the social structure of accumulation. Close examination shows the case for capital mobility to be extremely flimsy. That points to the ideological dimension behind today’s policy orthodoxy.”
http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_151-200/WP193.pdf
Perhaps it ironic that Russians seem more revolutionary than Americans?
Gil,
But only when they’re allowed to be, with moderation by the State if needed.
This is what we’re up against:
http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_151-200/WP191.pdf
ehmoran,
The article you posted is scary stuff. Perhaps you should contact the author and point him towards argumentation ethics. The foolish author doesn’t even realize he’s contradicting himself. He’s presupposing self ownership and the right to own property while insisting that others should be denied self ownership and the right to own property.
This is my favorite article on Argumentation Ethics: http://mises.org/journals/aen/aen9_2_1.pdf
Did you NOTICE the affiliation.
All the publications on this site discusses the Obama Administration’s, Congress, and the Senate’s AGENDA in perfect lock-step. (A look into the future, or nightmare, whichever you decide).
Yeh, this is really scary, I can’t believe I found this site.
I did ask the author:
“Are your research publications advocating that everyone in the World should get an annual income of about $50,000 (?) to bring about social and economic equality?
Should there be any differential in income?
And if so, what and/or who determines that income differentiation?”
ehmoran,
I’m glad you challenged the author. Argumentation ethics constitutes the greatest challenge to socialists. I’m not sure if you’re familiar with argumentation ethics, but Hoppe’s proof is the most hard core refutation of socialism ever written. Any person who tries to refute it is immediately caught up in a contradiction. The problem, of course, is that socialist are often too thick headed to understand the argument. Any person who takes the time and effort to fully grasps Hoppe’s proof will always be capable of easily refuting any socialist. Remember, socialism is any institutionalized policy of property title redistribution. So any person advocating tax increases, money supply expansion, or any other policy that entails property title redistribution will be easily refuted using Hoppe’s proof. Argumentation ethics is a treasure.
i liked “dissent on keynes”: edited by mark skousen, with a bevy of great article-writers, familiar names to most of us.
in pdf format in the “literature” section.
to ehmoran:
you may care to read chapter 10, by mark skousen:
“keynes as a speculator: a critique of keynesian
investment theory”.
there’s a murkiness around his initial deal-makings that bears thought.
Keynes was a brilliant conman and a most detestable human being. Jeffrey Tucker has done us all a great service by bringing attention to the latter chapters in Keynes’s “General Theory”. The ideas expressed in these chapters are neglected in economic textbooks, but they are the most dangerous ideas expressed in the book.
The first part of Keynes’s “General Theory” outlines a theory of short run fluctuations in effective demand. These are the theories we learn in college macroeconomic courses. But Keynes’s solution to these short term problems could not correct the inherent long term problems of the market economy. The later chapters discuss Keynes’s long term solutions. Keynes’s long term solution was to socialize investment. He believed scarcity could be eradicated in a few generations by socializing investment.
Roger Garrison’s “Time and Money” is the best interpretation of Keynes. He outlines Keynes’s short term and long term prescriptions. I highly recommend Garrison’s Book.
Beta Hater and newson,
Thanks guys, I’ll read them.
Beta Hater,
Holy crap, the author responded!!!! And very respectfully may I add.
ehmoran
“My understanding is that Keynes was the only economist who made money in the Free Market.”
Keynes was a somewhat successful investor. However, he did not make “money in the Free Market”. He took advantage of his government post in a socialist English government to earn his profits. Skousen demonstrates that Keynes was good at buying at market bottoms, but was notoriously bad at selling at the top.
I had the opposite problem, I’ve somewhat corrected some of Trading mistakes however.
“He took advantage of his government post in a socialist English government.” About par for the course, good thing for no regulation like he called for, nothing like that Inside Trading to make profits. Lord help me if I did that!
Who said Keynes was a charlatan, sounds like he was a regular criminal looking for an easy buck on somebody else’s DIME. What a slime bag.
@J Cortez
“I think it’s telling that the link about Keynes is from marxists.org.”
I think it’s transparently intentional that, out of a huge number of possible sources, the link is from marxists.org. Do you care for midway games? You’re already so close to winning the giant teddybear!
maybe someone can shed light on this enigma:
“… he was so convinced of the American recovery that he leveraged his position to the hilt. In 1929 his margin debt was £14,000; by 1936 it was £300,000! Frequently, over half of his securities were in borrowed money. Yet his stock selections were so successful that his net worth rose to £500,000 in 1936.”
- skousen on keynes.
how come keynes can access such enormous leverage, when finance was so hard to get during the depression? wouldn’t his bank sold him out at the bottom rather than bankrolling a growing loss position? sounds like he had a pretty enviable banking relationship. 300 000 pounds 1930′s translates to about 15 million pounds today.
if he’d been stopped out at the bottom, as happens to mr nobody, his long-term performance would have looked much worse.
…actually 300 000 pounds sterling would be about 56 million today if you gross it up via average earnings.
I have heard that Keynes speculated using the funds of his Cambridge college, King’s, and not as a purely private individual or in a government capacity (I’m not talking about when he conducted similar operations for the government that had other objectives like unblocking currency problems rather than making a gain).
to pm lawrence:
skousen goes on to say:
“His performance as a money manager for various insurance companies and for King’s College showed a similar pattern. According to a study by J. H. Chau and R. S. Woodward, Keynes was an outstanding portfolio manager of the Chest Fund at King’s College, Cambridge. Between 1927 and 1945, he beat the U.K. market by a large margin, with an annual mean return of 13 percent, compared to 0 percent for the U.K. market as a whole.”
300 000 quid seems an awful lot of margin debt p/a.
Keynes did make large gains, but later he lost them.
He made a lot of money by investing in gold shortly before the US government began purchasing it. It seems quite likely he was tipped off that the gold purchases were about to happen.
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