Unfortunately, the three major schools of economics today (Keynesian, Monetarist, and Austrian) as well as most of the minor ones are based on a rejection of the real bills doctrine, and insist that all capital formation must be financed using existing accumulations of savings. Every binary economist, however, knows that this assumption was completely disproved by the work of Dr. Harold Moulton in his 1935 classic, The Formation of Capital, written as volume 3 in a four-part series to present an alternative to the Keynesian New Deal. The real bills doctrine is also supported by Adam Smith in The Wealth of Nations (1776), Henry Thornton in An Enquiry into the Nature and Effects of the Paper Credit of Great Britain (1802), John Fullarton in On the Regulation of the Currencies of the Bank of England (1845), and, of course, Louis O. Kelso and Mortimer J. Adler in their 1961 collaboration, The New Capitalists: A Proposal to Free Economic Growth from the Slavery of Savings.
In essence, Mr. Bernanke is trapped within a paradigm that insists upon using a screwdriver as a hammer. He might eventually get a nail driven in by sheer force and great persistence, but it's not going to do the job right or (more probably) at all, and he's only going to ruin the tool, the fastener, and the workpiece while he's at it.
Despite this, proponents of the Just Third Way continue to try and bring the principles of binary economics and Capital Homesteading to the attention of the powers-that-be — for which intensive and ongoing door opening efforts are essential. Remember: if you don't open a door to your contacts, nobody else is going to do it. To further door opening efforts of the Just Third Way and other initiatives, these are some of the events that happened during the week. As can be seen, the closer we get to the holidays, the more activity winds down as people anxiously await the end of the year — as if the New Year will be any better if there has been no effort put forth to make it so.
• On Tuesday, December 15, 2009, CESJ held another biweekly "summit" meeting to discuss aspects of the Just Third Way and develop specifics for moving forward. Among other things, it was pointed out that 2012 will be the 150th anniversary of Abraham Lincoln's 1862 Homestead Act. Perhaps not coincidentally, the original Homestead Act came at a time when many people believed that it is impossible to finance capital formation without the use of existing accumulations of savings or for the economy to survive without chattel slavery. This was the premise behind David Christy's immensely influential book, Cotton is King (1855), credited with supplying the South with the economic arguments it needed to justify continued slavery and succession. We have not advanced beyond that today, with most people absolutely convinced that it is impossible to finance capital formation without the use of existing accumulations of savings, or for the economy to survive without wage slavery. This is the premise behind John Maynard Keynes's immensely influential book, The General Theory of Employment, Interest, and Money (1936), credited with supplying the world with the economic arguments it needs to justify continued wage slavery and effective State socialism.Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.
• Getting the word out about Capital Homesteading in time to enact the Capital Homestead Act in 2012 (or before) appears to be shaping up as a definite focus.
• CESJ's monthly Executive Committee meeting took place on Wednesday, December 16, 2009. While lengthy, the meeting was lively, again focusing on how to spread the word about Capital Homesteading and open doors to prime movers and others with a vested interest in bringing an end to the current seemingly endless spate of economic and political crises.
• Early today we reconnected with an old friend from college who reacted very positively to what he heard, and immediately began thinking of business and political connections with whom we should be in touch. This shows what can happen when people become familiar with the potential of the Just Third Way and start using their connections to open doors.
• As of this morning, we have had visitors from 42 different countries and 43 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, the UK, Canada, Brazil and the Philippines. People in Senegal, Aruba, Venezuela, the Philippines, and Indonesia spent the most average time on the blog. The postings on a Pro-Life Economic Agenda hold three of the top five spots, with "Aristotle on Private Property" and "Thomas Hobbes on Private Property" in the No. 2 and No. 3 places, respectively.