|Keynes: The purpose of production is to make the rich richer.|
Of course, Keynes did not advocate actual murder. Like the Mafia Don who doesn't dirty his hands with the blood of the victims he orders whacked, Keynes figured that the operation of the system would gradually eliminate the small owner from the economy . . . with a few assists from the State in the form of guaranteed wages and benefits, supplemented with welfare. Who, after all, would want to assume the risks of owning anything when he or she can obtain an absolute guarantee from the State that everyone will always be taken care of, forever?
|Dr. Harold G. Moulton|
Okay, a few obvious flaws here. One, it is counterproductive to finance new capital formation by cutting consumption. It reduces demand, and thus the incentive for forming new capital. It is far better, as Dr. Harold G. Moulton pointed out in The Formation of Capital (1935) to finance new capital formation by turning the present value of the new capital into money and repaying the loan with the profits of the capital itself.
Two, if labor is the only truly productive thing and capital at best only enhances labor, why do we need capital at all? Wouldn't an economy that relies on labor alone be more rational — and more efficient in ensuring that labor receives its just due? Shouldn't we just strip everybody (else) naked and send them back into the trees? (Always exempting ourselves, of course. . . .)
|Chesterton: Penty's rejection of machinery is as bad as another's worship|
The point here, however, is that the purpose of production is consumption. Under the delusion that cutting consumption is essential to finance new capital, however, Keynesian monetary and fiscal policies have stripped purchasing power from ordinary non-capital owners — increasingly without jobs — and transferred it via inflation to the rich.
This allows the rich to invest in new capital that eliminates even more human labor ("jobs") from the production process. It accelerates the eventual implosion that will occur as the powers-that-be try to impose the irrational situation in which a single monolithic entity produces everything that no one has the capacity to consume.
In the interim, and to take up the slack caused by job loss and inflation, consumers and government go into debt. This will, hopefully, be repaid with cheaper money as the government spends more and more and induces inflation at a faster and faster rate to try, like the Red Queen in Through the Looking Glass, and stay where it is.
Clearly this is insane — but that doesn't stop anyone from complaining about conspicuous consumption by the rich, when the real damage is being done by their non-consumption.