Today is “John Frum Day.” John Frum (also known as “From” and “Fram”) is a god in the South Pacific originally known as “John From Jesus Christ,” a reincarnation of John the Baptist. As the myth evolved in the late nineteenth century, John Frum was to restore the ancient way of life of the native peoples and open Heaven’s Cargo Workshops to them instead of restricting the wealth to white people.
|"Perform the right rituals, and it will work."|
After World War II, the movement that at first resembled the “Ghost Dance” of American Indians promising a future golden age if the white man would just leave, rapidly evolved into a millennialist religion that promised the good life here and now if the white man would only return — as long as the airplanes and vessels carrying the cargos of spam, Coca Cola, and Hershey bars that the American soldiers were so willing to share kept on coming.
Knowing that the white people were concealing the proper magical rituals from black people, the natives took careful note of the arcane ceremonies the Americans employed to summon their fabulous wealth from God’s Cargo Workshops. They built their own airstrips and warehouses, duplicating in wood, straw, and bamboo the control towers and radio shacks and the equipment they contained — sometimes even the personnel — so that they could receive the messages John Frum would send to his faithful followers to signal the day and hour when he would climb out of the volcano known as Yasur (God) and restart the flood of cargo.
|"Perform the right rituals, and it will work."|
This is actually supremely logical, given the assumptions of the natives. The idea is that by duplicating outward forms and anticipated results you can bring about the desired ends. This is a type of “magical” thinking, the “law of similarity” whereby if a thing looks the same, it is the same. The rationale is that if the outward forms are duplicated with sufficient accuracy, the cargo will reappear. Americans and Europeans who try to explain the fallacies in the paradigm are treated with pity and condescension at best, with suspicion and hatred at worst. It is useless to point out that the same effort put into productive activities would long ago have made the islanders much wealthier than their ephemeral dreams of cargo.
Nor does this sort of magical thinking afflict merely presumably ignorant and benighted native people of the South Pacific. It is rife amongst allegedly advanced and sophisticated people everywhere . . . especially Keynesians.
|"Think it through, experiment, and see if it works."|
Physicist Richard Feynman coined the term “cargo cult science” in his 1974 Caltech commencement speech, and later included it in a chapter in his book Surely You're Joking, Mr. Feynman! (1985). Feynman claimed cargo cult science mimics real science (especially by publishing in scientific journals) but lacks genuine experimentation — in other words, a way to get or maintain a Ph.D. without actually having to come up with something that is verifiably true.
More to the point, in his novel The Trouble with Nigeria (1984), Chinua Achebe criticized the “cargo cult mentality” of the governments of many developing countries. They issue proclamations about how great things are going to be if they’re elected, but don’t do anything to try and establish the desired state of affairs, evidently thinking that the mere proclamation or the passage of a law or two will, in and of itself, do the job.
|"Just do as I tell you, and it will work."|
Just as Cargo Cultists can point to a time when everything worked the way they claim it should and for the reasons they assert, adherents of Keynesian economics can point to a specific time — coincidentally that same Second World War — during which the economy was restored and universal prosperity was established through full employment. Earlier efforts to achieve full employment during the (second) Great Depression had been balked by the refusal of FDR and other leaders to perform the proper rituals and invoke the necessary spirits, as Keynes complained in his famous open letter published in the New York Times on December 31, 1933.
Once the war was over, the Keynesian rituals to maintain full employment were continued, and seemed to work for a while. Cracks soon appeared, however, necessitating the development of new rituals. The strain of paying for both the Vietnam War and the Great Society increased the national debt enormously. Given the right ceremonies and calling on the right gods, however, economists and politicians were confident that full employment (the developed nations’ version of cargo), could be permanently restored.
|"Remember people, we're all Keynesians except when we're not!"|
Since the 1970s (when even Milton Friedman declared, “We are all Keynesians now”), much effort and tremendous resources have been expended to duplicate the outward forms of a prosperous society. Just as the Cargo Cultists build bamboo airplanes and warehouses, Keynesians create the usual accompaniments to full employment, e.g., plenty of money, high paying wage system jobs, the creation of gigantic corporations, welfare, entitlements, a well-educated citizenry, and so on. Keynesians fail to realize, for example, that education doesn’t generate wealth. Wealth pays for education. The myth that has burdened millions of students with unrepayable debt is that education brings prosperity, rather than that prosperity allows people to become educated.
|"Just follow the good book . . . of me."|
Pointing out that things like full employment, adequate wages, benefits, education and social welfare are not the causes of prosperity but the results earns the pointer-outer the pity and condescension of the economic and political establishment at best, its contempt and anger at worst. It is useless to explain that paying people for nothing or increasing the amount of money before increasing the present value of existing and future marketable goods and services (current and future production) only debauches the currency and redistributes existing wealth without creating any new wealth. Noting that neglecting to establish widespread ownership of capital to replace disappearing wage system jobs as technology takes over the burden of production incites rage at such heresy.
|Creating symbols of wealth creates wealth . . . right?|
Keynesians ignore the obvious fact that there is no actual increase in the money supply through the alleged operation of the money multiplier. There is only a transfer of existing money as checks are deposited, presented for payment, and clear. The Keynesian money multiplier explains nothing. It is only useful in explaining away the operation of the ridiculed real bills doctrine. Reversing cause and effect and ignoring all evidence to the contrary, the unquestioned dogma is that increasing the money supply brings full employment. Keynesians and others deride the possibility that money is a result of creating a means to convey a claim on the present value of existing and future production — the real bills doctrine, a result of wealth creation, not its cause.
|"I'm from the government, and I'm here to help!"|
Keynesians remain firmly convinced that prosperity can only result if John From the Government establishes full employment (brings back cargo) and the outward signs of prosperity by law, that is, by force. Then wealth production will presumably follow automatically, creating abundance for all. They fail to realize that if the tremendous effort and vast resources that have already been used to try and make Keynesianism work and get something for nothing had been put to productive use, the world economy would not be in the mess it is in today.
There is a way out, however. Through restructuring our institutions, especially our money and tax systems, Capital Homesteading has the potential to make it possible for every child, woman and man to acquire a capital stake sufficient to generate income to meet normal living expenditures. This becomes critical as advancing technology eliminates increasing numbers of wage system jobs, and those with wealth become increasingly resistant to redistribution. Further, current methods of financing new capital formation not only maintain the current position of the wealthy and shut out virtually everyone else from the chance of acquiring and possessing private property in capital, they operate to concentrate ownership of almost all new capital in fewer and fewer hands.
|Homestead not just land, but commerce and industry as well.|
The solution is to establish a national economic policy based on the binary growth model, designed to lift barriers in the present financial and economic system and universalize access to the means of acquiring and possessing capital assets — a “Capital Homestead Act.” The Capital Homestead Act would allow every child, woman and man to accumulate a target level of capital assets. Using a tax-deferred “accumulation vehicle” similar to an IRA, the amount would be sufficient to generate an adequate and secure income for that person without requiring the use of existing pools of savings or reductions in current levels of consumption.
Each capital homesteader’s account would be able to receive annual allocations of interest-free (but not cost-free), productive credit. This would begin the process of creating new asset-backed money through the central bank, administered by local commercial banks by investing in feasible private sector capital formation and expansion projects of businesses that would issue new shares to be purchased and sheltered in the citizen’s Capital Homestead Account. After the "future savings" (future profits) generated by the productive assets paid off each year's Capital Homestead investment (loan) and canceled the money, the citizen would continue to receive in the form of dividends the incomes generated by those capital assets.
There is, of course, much more to it than that. An overview can be found on the website of the Center for Economic and Social Justice under “Capital Homesteading.”