As John Maynard Keynes famously declared in the conclusion of his General Theory of Employment, Interest and Money (which is not general or much of a theory, and — being obsessed with the Fabian socialist doctrine of “full employment” — has little to do with the real meaning of interest and money),
Keynesian Economics
The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. (John Maynard Keynes, General Theory of Employment, Interest and Money (1936), VI.24.v.)
Of course, the absurdity of a world held in thrall by the economics of J.M. Keynes, a defunct economist, is immediately apparent. It doesn’t stop there, however. As we saw in the previous posting on this subject, mainstream economists reject Binary Economics. That is why we asked AI to come up with some reasons why mainstream economists reject Binary Economics. It presented nine of them, some of them better than others, but none of them what anyone might call good.
Last week we looked at the presumed lack of empirical evidence supporting Binary Economics. This week we look at the ironic and incongruous claim that mainstream economists reject Binary Economics because it is “heterodox and non-conventional” . . . as if basing an economic paradigm on the mental meanderings of a defunct economist who railed against defunct economists is somehow orthodox and conventional.
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| Keynesian Logic |
2. **Heterodox and Non-Conventional Framework**:
- Binary Economics is considered a heterodox theory, diverging significantly from neoclassical, Keynesian, and other mainstream economic paradigms. Its central premise — that capital has an independent, distributive relationship to economic growth suppressed by a closed private property system — is seen as a departure from established economic thought.
- The theory's focus on two factors of production (labor and capital) and its rejection of neoclassical assumptions about market efficiency (e.g., the First Fundamental Theorem of Welfare Economics) place it outside the mainstream. Economists often view such heterodox approaches with skepticism, especially when they challenge foundational principles without integrating into existing models.
Mortimer Adler
According to Mortimer Adler (who co-authored The Capitalist Manifesto and The New Capitalists with Louis Kelso, so maybe we shouldn’t cite him), there are three ways of proving something is true. As he explained in Ten Philosophical Mistakes, all knowledge and opinion legitimately advanced and held as knowledge can be challenged and differentiated from mere or private opinion by presenting —
· Experience (is it empirically valid?),
· Rational argument (is it logically consistent?), or
· A combination of experience and rational argument (is it empirically valid and logically consistent?). (Mortimer J. Adler, Ten Philosophical Mistakes: Basic Errors in Modern Thought — How They Came About, Their Consequences, and How to Avoid Them. New York: Macmillan Publishing Company, 1985, 104.)
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| Louis O. Kelso |
If a claim cannot be either defended or refuted by experience, rational argument, or a combination thereof, it must be regarded as private opinion. It may be true, but it may just as easily be false or even complete nonsense.
Last week we saw the “empirical evidence” cited by mainstream economists to reject Binary Economics (that Binary Economics has no empirical evidence to support it) is simply a lazy way of saying they have not examined the evidence to test the hypotheses of Binary Economics. They have merely assumed the evidence supports their own theories when it demonstrably does not. To that we can add the logical absurdity of someone claiming they have proved the existence of non-existence (that the evidence “proves” Binary Economics is not valid), which is logically impossible . . . yet mainstream economists insist they have done so. That leaves rational argument . . . sort of.
So, what is the rational argument mainstream economists advance to reject Binary Economics? That “Its central premise — that capital has an independent, distributive relationship to economic growth suppressed by a closed private property system — is seen as a departure from established economic thought.” In other words, mainstream economists reject Binary Economics because it is not mainstream economics.
Similarly, the archer rejects a rifle because it is not a bow, a horseman rejects an automobile because it’s not pulled by a horse, and the railroad engineer rejects an airplane because it doesn’t run on rails. The cat fancier rejects dogs because they are not cats, and the dog aficionado rejects cats because they are not dogs.
. . . yet there are people who have both cats and dogs and reject neither. What astounds mainstream economists (or would, if they bothered to consider it), is that mainstream economics cannot account for Binary Economics, but Binary Economics can account for mainstream economics; every reason advanced by the AI response demonstrates no true understanding of Binary Economics. The best mainstream economists can do is follow Keynes and pretend that the inconsistencies simply don’t exist and will disappear if we just wish hard enough and long enough and click our heels together and insist there’s no economics like Keynes, there’s no economics like Keynes. As Keynes himself admitted,
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. (John Maynard Keynes, “Economic Possibilities for Our Grandchildren” (1930), republished in his collection, Essays in Persuasion. London: Macmillan and Co., 1931.)
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| J.M. Keynes |
This was not a chance remark or an offhand comment. Keynes insisted his system requires fundamental changes in principles of existence and reality. If government controls money and credit, everything will be boompsa-daisy. In the opening passages of A Treatise on Money he claimed,
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.)
Of course, the main point here is Keynes’s absolute faith in the ability of the manmade abstraction of government to control every detail of the lives of God-made human persons. This would be by “re-edit[ing] the dictionary” to change reality. Naturally, government would in turn be controlled by Keynes, the Great Defunct Economist.
And what would be the result of this presumably “orthodox” and “conventional” support for mainstream economics? Why . . . Fairyland!!!!
You think we’re kidding? Keeping in mind that Keynesian economics is to all intents and purposes Fabian socialism — an easy case to prove, even if Keynes was never a formal member of the Fabian Society — the result of Keynesian economics is what Annie Besant, Fabian socialist and theosophist, called “my fairy State” (exact quote):
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| Annie Besant |
But the general idea is that each man should have power according to his knowledge and capacity. . . . And the keynote is that of my fairy State: From every man according to his capacity; to every man according to his needs. A democratic Socialism, controlled by majority votes, guided by numbers, can never succeed; a truly aristocratic Socialism, controlled by duty, guided by wisdom, is the next step upwards in civilisation. (Annie Besant, The Future of Socialism (Adyar Pamphlets No. 18). London: The Theosophical Publishing House, 1912, 23.)
So, let’s put this in the simplest possible terms. On the one hand you have Binary Economics, developed by Louis O. Kelso, a corporate finance lawyer and economist, and systematized by Mortimer J. Adler, one of the greatest Aristotelian-Thomist philosophers of the twentieth century, supported by rigorous logical argument and a large body of empirical evidence the mainstream economists refuse to consider.
And on the other? Keynesian economics . . . employing sophistries and paradoxes that fall apart on examination, formulae reinterpretations that violate the fundamental principles of mathematics, nonsensical assertions, and the gushing enthusiasm of a socialist theosophist (or a theosophist socialist) that the ideal economy is a fairyland that can only occur if we all join hands, contact the spirit of the Great Defunct Economist, and wish hard enough to make reality disappear.
And it only gets worse, as we shall see in the next posting on this subject.
#30#
