And now for something completely different! Every so often we’ve made a reference to Dr. Milton Friedman’s appearance on the Phil Donohue Show and his comment that “greed is good.” It turns out that Friedman wasn’t the only economist advocating the goodness of greed and its benefits for the human race.
|His Economic Lordship, J.M. Keynes|
Surprisingly (or perhaps not so surprising), the World’s Greatest Economist™ John Maynard Lord Keynes also came out strong in favor of vice as virtue! As His Lordship declared in an essay, “Economic Possibilities for Our Grandchildren,” first published in 1930 and republished in his collection, Essays in Persuasion (1931),
For at least another hundred years we must pretend to ourselves and to every one that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight.
Of course, taken out of context like that gives the impression that Keynes was in favor of lying and deceit as a usual thing. Read in context, we realize that Keynes very likely believed that lying (even to one’s self) was ordinarily to be considered something bad, or at least not very good, but that it is permissible if you have a good reason.
. . . which is to say, lying and deceit are okay whenever you think they might be useful to you or are simply more convenient than honesty; the end justifies the means. Taking this fundamental principle of Keynes as a guide, we can start to get a grip on understanding the more confusing aspects of Keynesian economics and realize why the system as a whole doesn’t seem to conform to common sense at key points.
Take, for example, Keynes’s description of the role the State plays in regulating (something of a euphemism in this context, as to Keynes, “regulation” seems to have meant “absolute control”) money and credit, which Keynes — in common with most Currency Principle adherents — defined exclusively in terms of currency and “currency substitutes.” As he declared in the opening passages of his Treatise on Money (and carefully note the year of publication),
|Knapp, founder of Chartalism. It should've stayed lost.|
It is a peculiar characteristic of money contracts that it is the State or Community not only which enforces delivery, but also which decides what it is that must be delivered as a lawful or customary discharge of a contract which has been concluded in terms of the money-of-account. The State, therefore, comes in first of all as the authority of law which enforces the payment of the thing which corresponds to the name or description in the contract. But it comes in doubly when, in addition, it claims the right to determine and declare what thing corresponds to the name, and to vary its declaration from time to time — when, that is to say, it claims the right to re-edit the dictionary. This right is claimed by all modern States and has been so claimed for some four thousand years at least. It is when this stage in the evolution of money has been reached that Knapp’s Chartalism — the doctrine that money is peculiarly a creation of the State — is fully realized. (John Maynard Keynes, A Treatise on Money, Volume I: The Pure Theory of Money. New York: Harcourt, Brace and Company, 1930, 4.)
|Aristotle might have thought Keynes a bit nuts.|
Any Aristotelian or Thomist of any faith will instantly grasp the incredible, even breathtaking scope of Keynes’s claim. If true, Keynes’s declaration not only abolishes private property, but free association — liberty — by claiming that the State can alter the terms of any “money contract” at will simply by changing the definition of a thing.
Keynes was evidently unaware that all contracts are “money contracts.” They involve the exchange of the value of existing or future marketable goods or services — “consideration” — or no contract exists.
For a crash course in legal language, a contract is defined in Black’s Law Dictionary as “An agreement, upon sufficient consideration, to do or not to do a particular thing.” “Consideration” is the aspect of a contract involving value, and thus money: “The cause, motive price, or impelling influence which induces a contracting party to enter into a contract.” All contracts therefore necessarily involve the exchange of something of value, and thus involve money.
Getting into a little philosophy, the power to change the definition of a thing is the power to change the thing’s “substantial nature” — its essence. In keeping with Karl Marx’s reformulation of Georg Wilhelm Friedrich Hegel’s claim that, in a sense, the State is somehow divine or a divine manifestation, Keynes was, in effect, claiming that the State, if not a god per se, is at least something with the power of a false god to change truth through transubstantiation.
|The State is a "Mortall God"? Not likely. Next slide, please.|
This has led to the situation in which the great mass of people has become convinced that all benefits flow from the State. No recourse is to be had from any other source for anybody or anything. As one enthusiast put it, “The State is the sole intercessor available to the poor.” (Rupert J. Ederer, “Solidaristic Economics,” Fidelity magazine, July 1994, 9-15.)
Unfortunately, the State, especially under fascism and other forms of totalitarianism, frequently has an agenda at odds with the duty of individuals to acquire and develop virtue. (Caritas in Veritate, §§ 7, 11, 17, 27, 44, 73, 78.) When society is oriented along lines that come into conflict with the natural law based on the Intellect, it becomes difficult, if not impossible, for a good citizen to be at the same time a good human being.
Thus, it becomes perfectly understandable that, trapped in the Currency Principle paradigm that goes contrary to natural law, even people who are otherwise opposed, like Friedman and Keynes, would come to a mutual understanding about the necessity of dishonesty and vice in order to make their anti-human systems work.
It then comes as no surprise that such experts find nothing wrong with the government carrying out massive counterfeiting operations, as we will see in the next posting on this subject.#30#