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.
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| 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.
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| "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.)
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| "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.
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| "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.
#30#
