Keynes Was Wrong


(Lord) Keynes is one of the greatest celebrities in economy. As such, he has been an inspiration of the self-declared “left” (“liberal” in the USA; “New Deal” in the 1930s).

Keynes was involved in three major concepts:

  1. That the Versailles Treaty of 1919 was the cause of Nazism (he created it).
  2. That government should create useless work (another key idea of Nazism).
  3. That the dollar shouldn’t be the world reserve currency (only on this was Keynes right).

***

Keynes advocated wanton government spending. Such stupidity, is the oldest imperial trick of distributing coins to the poor. It demeans the plebs, and helps the established order, and no one else. Unbelievably, the so-called great economist proposed, as a job creation measure, the idea of filling bottles with old bank notes and then burying them, so that people would be employed to dig them 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. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.

Book 3, Chapter 10, Section 6 pg.129 of Keynes’ “The General Theory..”

This is the exact opposite of the Absolute Worth Energy Economy. Inflation of useless work feeds inflation of the CPI and then RAGFLATION.

***

Keynes was a dedicated racist, who despised, in very explicit writing, Poles and Slaves, extolled Germans, and launched the theory that the Versailles Treaty of 1919 would lead to economic collapse, as Slavs were just good when used as slaves to the Germans (this is all in his “Economic Consequences Of Peace”, a proto “Mein Kampf” rag). The Nazis grabbed Lord Keynes’ outrageously racist theory, and it is repeated to this day by racist idiots to excuse Nazism. Not only this, but the theory of the evil of Versailles is mainstream thinking, and if one doubts it, one is viewed as uneducated or… racist (being racist against Nazis being a great theme Nazis and their followers bemoan…)

***

Krugman, of Jewish descent, was always an admirer of Keynes (not knowing Keynes was one of the master thinkers of Nazism!). So Krugman, a Nobel Laureate was of the persuasion that whatever hare brained stimulus plan Obama or Biden were coming up with, was a good thing. It didn’t come to his mind that money spent on holes, instead of growing the real economy profiting the poor, was a trick to make the wealthiest, wealthier. 

Wrote Krugman on I Was Wrong About Inflation, July 21, 2022:



In early 2021 there was an intense debate among economists about the likely consequences of the American Rescue Plan, the $1.9 trillion package enacted by a new Democratic president and a (barely) Democratic Congress. Some warned that the package would be dangerously inflationary; others were fairly relaxed. I was Team Relaxed. As it turned out, of course, that was a very bad call. 

 

Government spending to do good stuff is always good. Government spending to do stuff that the private sector should do is always bad Example: Biden wanted to spend 3.5 billion on plugs in the desert for wealthy people with ultra expensive electric cars: bad. Instead he should spend the same money on fundamental research on new clean energy which is way too expensive and resource (PhDs) consuming to be funded by private companies or VCs. 

 

Obama, on his day one, cut to zero fundamental government research on hydrogen… Although that’s how the US got to the Moon (by electrical power from fuel cells). However, renewables can’t really work without “green” hydrogen (for storage and to put in planes, etc.). That was a disastrous decision, but Obama owned it. No private company could be accused.

 

A lot of the stimulus packages were the equivalent of making holes to fill the Albert Hall. Keynes thought that was smart. In truth, that was idiotic: work, energy, human genius, are all finite, they can’t be squandered. Squandering government funds is, in the present state of the planet, criminal. 

 

Not to say that governments should not invest in decency. Just watch the giant camps of homeless, the worst in the world, according to the UN, in Oakland, while the governor of California sits on a budget surplus larger than most countries’ GDPs, while so many bus lines have been cut that the poor cannot travel. 

 

Inflating the good is good, inflating gangrene is not. 

***

Keynes was of course complex, as all very intelligent people are. So, although he did not see that filling the Albert Hall with holes would feed inflation (by reducing supply, thus increasing cost of useful activities), he wrote this:

There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

The Economic Consequences of the Peace by John Maynard Keynes, on Project Gutenberg

This would promptly be implemented in Germany by Dr. H. Schacht… The German central banker who would become one of Hitler’s main sponsor… and was an international creature of JP Morgan…

The present inflation was not created accidentally. It profited mostly to those who wanted free money, and could be expected to reimburse the loans: the wealthiest.

Not a surprise. And even distribution of coins to the poor is the oldest plutocratic trick, used for millennia, making the wealthiest and more powerful look generous, and economically indispensable…

Patrice Ayme

The last explosion of inflation, in the 1970s, was caused bt war (Yom Kippur) followed by Arab oil embargo, which exploded the price of oil. Now, at least in absolute terma, the world is much more dependent on fossil fuels: world consumption is close to 100 million barrels… a day… Good job, Kremlin paid “ecologists”!

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3 Responses to “Keynes Was Wrong”

  1. ianmillerblog Says:

    I think Keynes gets an unfortunate reputation, in part from his rather silly extreme examples (he didn’t really think that just digging holes and refilling them was what should be done; he assumed there was something more productive that could be done) but more from the fact that there was a second half of the recipe – pull the money back out of the economy when things start to come right. In short he was advocating the government act like a sort of economic capacitor.

    What he overlooked is that in a democracy, no politician is going to ebforce the second half of the recipe.

    Like

    • Patrice Ayme Says:

      Lord Keynes was one key originator of the racist, anti-Slav, Nazi system of thought. That, by itself, is enough to put him in the trash bin of history. That government stimulus works was known before Homer, as explained by Homer himself. Trojan war was a vast government stimulus!

      Like

    • Patrice Ayme Says:

      A plutocrat much revered, thus most evil, Lord Keynes, created in his famous pamphlet, “The Economic Consequences of Peace”, what would become one of the Nazis’ main theories, complete with outrageous racism. Keynes is viewed as the pillar of the “Neo-Liberal” economy, revered and promoted by the Main Stream Politicians of the West. Increasingly many view the “liberal” economy just a tool to increase inequality, build plutocracy. It is enlightening to realize that the main and first proponent of the Neo-Liberal economy also spawned Nazism.

      https://patriceayme.wordpress.com/2015/11/24/considering-evil-prince-charles-lord-keynes/

      Like

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