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08/07/2010 08:15:00
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The last seventy years or so have proven the massive flaws in theofficial economic and monetary policies which are promoted by thisgovernment, but it appears that there are few who are either capable orwilling to view these flaws regarding the solutions that are available toresolve those flaws. Evidently, during this latest economic dislocation, wewill see yet another round of flawed economics and monetary policyemanating from the Keynesian mentality that permeates the official realmsof our government.
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Keynesian Economics was created to create problems and not offersolutions. That seems to be a radical statement however, when you judgethat statement in the light of the writings of those who knew John MaynardKeynes and his economic theories, it becomes apparent that they were wellaware of the effects that Keynesian Economics would have on the well-beingof the economy and that those effects would create the need for an ever-increasing amount of government intervention. Perhaps the clearestexplanation of the effects of Keynesian Economics can be found in thewritings of Keynes' contemporary and Socialist Comrade John Strachey.
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Strachey stated that Keynesian Economics was "an indispensable stepin the right direction. The fact that the loss of objectivity, and the intrinsicvalue of the currency which is involved (i.e., inflation) will sooner or latermake necessary, on pain of ever- increasing dislocation, a growing degree of social control . . . for the partial character of the policy will itself lead on tofurther measures. The very fact that no stability, no permanently workablesolution can be found within the limits of this policy will ensure that once acommunity has been driven by events to tackle its problems, in this way, itcannot halt at the first stage, but must of necessity push on to morethorough going measures of re-organization."
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It should be very obvious, and irrefutable, that the real purpose of Keynesian Economic Theory was to completely undermine economicstability, thus creating a constant and steady need for governmentintervention that would eventually destroy the actual free market, leaving noalternatives but a government centered Socialist market economy.
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In the book "The Failure of the New Economics", Hazlitt stated,correctly, "Keynes's plan for 'the socialization of investment' would inevitablyentail socialism and state planning. Keynes, in brief, recommended de factosocialism under the guise of 'reforming' and 'preserving' capitalism." Thatstatement, of course, is in agreement with Strachey's assessment aboutwhat effects Keynesian Economics would have on the substructure, andeventual superstructure of economics.
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Strachey again, referring to Keynesian Economic Theory, said: "If onceit were admitted that capitalism could be regulated and controlled in thisway, might not the wage-earning majority of the population come sooner orlater to the conclusion that the thing to do was neither to put up with thingsas they were nor to go through the fiery furnace of social revolution, in orderto establish a wholly new system, but to harness - to bit and to bridle -capitalism in its own interest? Was it not apparent that Keynesism had onlyto be pushed a little further and a state of things might emerge in which thenominal owners of the means of production, although left in full possessionof the legal title to their property, would in reality be working not forthemselves, but for whatever hands had grasped the central levers of socialcontrol?"
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Additionally, Strachey stated: "It is impossible to establish communismas the immediate successor to capitalism. It is accordingly proposed toestablish socialism as something, which we can put in the place of ourpresent decaying capitalism. Hence, communists work for the establishmentof socialism as a necessary transition stage on the road to communism."
 
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Thus, according to Strachey, the goal has been to gradually introduceSocialist mechanisms within the capitalist market systems throughdegenerative measures [such as Keynesian Economic Theory] that wouldincreasingly promote government intervention in the markets. This hasindeed happened over the last seventy-some-odd-years, and today we areseeing an even greater push by government in a response to this latestdislocation in the economy, as predicted by Strachey, as well as otherSocialists.
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It becomes apparent that one of the goals of Keynesian EconomicTheory is the transformation of a free market economy into an officialgovernment economy. Indeed, if we look at the effects of Keynesian Theoryon the actual monetary and economic policies executed in this country overthe decades it becomes easy to see that this particular theory has eliminatedthe normal market mechanics for artificially induced and managed marketmechanics. You will notice that over the years the savings rate in thiscountry has gradually deceased, consumption, driven by debt, has increasedand during this process the government has drastically increased its powerover the economy. Due to various mechanisms within Keynesian Economics,in particular the enforced use of Fiat Money, private monies for investmenthas gradually dwindled while government monies have increased. Withoutprivate monies there is no other way for the markets to be maintained otherthan through public funding, thus the government must intervene andprovide capital in the markets, as we have seen. At this stage, once thegovernment infuses public funding, it has the power, as we see, to dictatenot only conduct within the market, but also the various processes involvedin business decisions.
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