As we saw in the previous posting on this subject, the two fatal flaws in Keynesian economics (at least the two with which we are most concerned . . . today) are the idea that labor is responsible for all production and that past savings are essential to finance new capital formation. These two assumptions are not exclusive to Keynesian economics, however. They are also integral to the rise of capitalism — and socialism.
|Not even close. Savings = investment, not a dragon's hoard.|
In theory, there is no reason why anyone with a financially feasible capital project (An income-generating endeavor involving land, technology, or commodities that pays for itself out of its own future profits and thereafter yields consumption income) cannot participate in the process of money creation. In practice, however, money creation is reserved to those who are already wealthy. This is because they control collateral, the universal means for securing against financial risk.
With economic growth and development tied one way or another to existing accumulations of wealth, by definition a monopoly of the wealthy, the rich became richer, and the poor became poorer. This is because access to the means to acquire capital ownership became increasingly restricted, whether by occupying the rapidly disappearing waste land and making it productive or obtaining financing to enter manufacturing or commerce.
|"I sense a disturbance in the farce . . . of socialism"|
The new conditions and the stresses that resulted caused a social and intellectual sea change. Hugo Grotius’s innovations in the theory of natural law that made the Will everything were matched by an evolution in political and economic theory that also shifted the focus from God to man. As the political scientist George Sabine explained,
The dissolution of traditional institutions and the economic pressure which it engendered were facts and not theories. Hobbes’s logic turned egoism into a postulate for a social philosophy, but the conditions which made individualism an unescapable point of view existed in their own right. The belief that social and political institutions are justified only because they protect individual interests and maintain individual rights emerged under the pressure of circumstances which first became effective in England in the mid-seventeenth century but which also persisted and became more effective during the two centuries following. (Sabine, A History of Political Theory, op. cit., 477.)
|"Man is by nature a political animal."|
The State or community, not God, becomes the ultimate arbiter. Those who control the State — those who have power — are thereby permitted to decide who has rights and is therefore a person; law is will (lex voluntas) and might makes right.
Lack of access to money and credit — the principal means of acquiring and possessing capital — thereby changed the character of demands to abolish private property from religious alone, to religious, economic, and political. Private property being a natural right, a change in fundamental economic and political institutions also requires a change in religion, which (if orthodox) conforms to the natural law.
All laws were originally construed as divine and thus unalterable. When the Greeks developed the idea of an unchanging divine law separate from, but reflected in changeable human law, they also raised the question as to whether divine law, too, could be changed.
|"Natural law is God's Nature, not God's Will."|
That is why the question concerning the primacy of the Intellect or the Will consumed medieval philosophers. How one answered it, whether the Intellect (reason) or the Will (faith) was preeminent, determined one’s theories about God and man, as well as one’s views of religious, civil, and domestic society, and the role of each.
Any effort to change the fundamental rights of the natural law, whether life, liberty, or private property, therefore requires an alteration in the concept of natural law from unchanging to changeable. This in turn requires a transformation of religious doctrine to put changeable man at the center instead of unchanging God. This was precisely the development seen in seventeenth century England, and while it seems like the very quintessence of personalism, is actually its complete negation.
It also explains why socialism prior to 1848 and the publication of The Communist Manifesto that signaled the rise of scientific socialism almost invariably relied on religious justifications, although based on a new concept of religion derived from the alternative spirituality of the Fraticelli that tried to circumvent natural law. The changes demanded in political and economic philosophy necessarily involved fundamental changes not only in specific religious doctrines, but in transforming the idea of doctrine itself from an unchanging principle, to something alterable at the will of the strongest.