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Degenerative Keynesianism

Degenerative Keynesianism

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Published by Republicae
The manner of economic destruction that occurs through the policies that arise because of Keynesian Economics is astounding. It is evident to see that the last 70 years or so have done little to create economic stability and the reason behind that lack of stability can be traced to Keynesianism.
The manner of economic destruction that occurs through the policies that arise because of Keynesian Economics is astounding. It is evident to see that the last 70 years or so have done little to create economic stability and the reason behind that lack of stability can be traced to Keynesianism.

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Published by: Republicae on Feb 14, 2009
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07/12/2010

 
The last seventy years or so have proven the massive flaws in the officialeconomic and monetary policies which are promoted by this government, but itappears that there are few who are either capable or willing to view these flawsregarding the solutions that are available to resolve those flaws. Evidently,during this latest economic dislocation, we will see yet another round of flawedeconomics and monetary policy emanating from the Keynesian mentality thatpermeates the official realms of our government.Keynesian Economics was created to create problems and not offer solutions. Thatseems to be a radical statement however, when you judge that statement in thelight of the writings of those who knew John Maynard Keynes and his economictheories, it becomes apparent that they were well aware of the effects thatKeynesian Economics would have on the well-being of the economy and that thoseeffects would create the need for an ever-increasing amount of governmentintervention. Perhaps the clearest explanation of the effects of KeynesianEconomics can be found in the writings of Keynes' contemporary and SocialistComrade John Strachey. Strachey stated that Keynesian Economics was "anindispensable step in the right direction. The fact that the loss of objectivity,and the intrinsic value of the currency which is involved (i.e., inflation) willsooner or later make necessary, on pain of ever- increasing dislocation, a growingdegree of social control . . . for the partial character of the policy will itselflead on to further measures. The very fact that no stability, no permanentlyworkable solution can be found within the limits of this policy will ensure thatonce a community 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 more thoroughgoing measures of re-organization."It should be very obvious, and irrefutable, that the real purpose of KeynesianEconomic Theory was to completely undermine economic stability, thus creating aconstant and steady need for government intervention that would eventually destroythe actual free market, leaving no alternatives but a government centeredSocialist market economy.In the book "The Failure of the New Economics", Hazlitt stated, correctly,"Keynes's plan for 'the socialization of investment' would inevitably entailsocialism and state planning. Keynes, in brief, recommended de facto socialismunder the guise of 'reforming' and 'preserving' capitalism." That statement, ofcourse, is in agreement with Strachey's assessment about what effects KeynesianEconomics would have on the substructure, and eventual superstructure ofeconomics.Strachey again, referring to Keynesian Economic Theory, said: "If once it wereadmitted that capitalism could be regulated and controlled in this way, might notthe wage-earning majority of the population come sooner or later to the conclusionthat the thing to do was neither to put up with things as they were nor to gothrough the fiery furnace of social revolution, in order to establish a wholly newsystem, but to harness - to bit and to bridle - capitalism in its own interest?Was it not apparent that Keynesism had only to be pushed a little further and astate of things might emerge in which the nominal owners of the means ofproduction, although left in full possession of the legal title to their property,would in reality be working not for themselves, but for whatever hands had graspedthe central levers of social control?"Additionally, Strachey stated: "It is impossible to establish communism as theimmediate successor to capitalism. It is accordingly proposed to establishsocialism as something, which we can put in the place of our present decayingcapitalism. Hence, communists work for the establishment of socialism as a
 
necessary transition stage on the road to communism."Thus, according to Strachey, the goal has been to gradually introduce Socialistmechanisms within the capitalist market systems through degenerative measures[such as Keynesian Economic Theory] that would increasingly promote governmentintervention in the markets. This has indeed happened over the last seventy-some-odd-years, and today we are seeing an even greater push by government in aresponse to this latest dislocation in the economy, as predicted by Strachey, aswell as other Socialists.It becomes apparent that one of the goals of Keynesian Economic Theory is thetransformation of a free market economy into an official government economy.Indeed, if we look at the effects of Keynesian Theory on the actual monetary andeconomic policies executed in this country over the decades it becomes easy to seethat this particular theory has eliminated the normal market mechanics forartificially induced and managed market mechanics. You will notice that over theyears the savings rate in this country has gradually deceased, consumption, drivenby debt, has increased and during this process the government has drasticallyincreased its power over the economy. Due to various mechanisms within KeynesianEconomics, in particular the enforced use of Fiat Money, private monies forinvestment has gradually dwindled while government monies have increased. Withoutprivate monies there is no other way for the markets to be maintained other thanthrough public funding, thus the government must intervene and provide capital inthe markets, as we have seen. At this stage, once the government infuses publicfunding, it has the power, as we see, to dictate not only conduct within themarket, but also the various processes involved in business decisions.John Maynard Keynes was closely associated with various Socialist groups; in factKeynes once described himself as a Bolshevik and was well aware of Socialistdoctrine and theory. Keynes, in his book "Economic Consequences of the Peace",stated: "By a continuous process of inflation, governments can confiscate,secretly and unobserved, an important part of the wealth of their citizens. Bythis method, they not only confiscate, but they confiscate arbitrarily; and whilethe process impoverishes many, it actually enriches some.... The process engagesall of the hidden forces of economic law on the side of destruction, and does itin a manner that not one man in a million can diagnose."Indeed, Nikolai Lenin spoke before the Second Congress of the CommunistInternational and declared of Keynes: "I will quote another economic source whichassumes particularly great significance, the British diplomat Keynes, the authorof The Economic Consequences Of The Peace, who on the instructions of hisgovernment, took part in the Versailles peace negotiations, watched them directlyfrom the purely bourgeois point of view, studied the subject step by step, andtook part in the conference as an economist. He arrived at conclusions which arestronger, more striking and more instructive than any a Communist revolutionarycould advance, because they are conclusions drawn by an acknowledgedbourgeois...."The political economic nature of Keynesian Economics cannot be denied, nor can theeffects of those theories on the entire economic and social structure of ourgovernment. Keynes, in a letter to fellow Socialist George Bernard Shaw, said: "Ibelieve myself to be writing a book on economic theory which will largelyrevolutionize ... the way the world thinks about economic problems. When my newtheory has been duly assimilated and mixed with politics and feelings andpassions, I can't predict what the final upshot will be in its effect on actionsand affairs. But there will be a great change, and in particular the Ricardianfoundations of Marxism will be knocked away."
 
Geoffrey Pilling, a Marxist, wrote of the effects of Keynesian Economic Theory onthe Western Capitalist Societies saying: "It [the West] accepts Keynes' own beliefin the primacy of ideas in the shaping of state economic policy. An examination ofthe development of the role of the state indicates that there is an organic trendtowards ever-greater state involvement in the attempted regulation of economic andsocial matters. It concurs with Keynes' own judgment about the significance of hiswork: namely that it did in fact constitute a revolution in economics. We havealready noted that there is little if any agreement amongst those who would wishto be labeled Keynesians about the nature of this revolution."The "Keynesian Revolution" has effectively created a continual increase in thelevels of involvement by the government in economic markets, in fact if you lookat the latter half of the Twentieth Century you will see that capitalism, not onlyin the United States, but internationally, has been negatively influenced by thisSocialist Keynesian Revolution. It is also important to understand that the worksof Keynes was not only lauded by various Socialist groups, including Marxists, butthe Fascists and even National Socialists [Nazis] equally held Keynesian Theoriesin high esteem. In writing the "Forward" to his German Edition of the GeneralTheory, Keynes stated: "The theory of output as a whole, which is what thefollowing book purports to provide, is much more easily adapted to the conditionsof a totalitarian state, than is the theory of production and distribution of agiven output produced under the conditions of free competition and a large measureof laissez-faire."In the Journal of Political Economy, you will find: "German economists in theearly 1930s were well aware of Keynes's work, and were developing theories alongparallel lines. These involved the now-familiar prescription for economicdepressions of large budget deficits, public-works programs, and easy credit."Of course, there can be no doubt that government involvement in the markets andthe regulatory state reached its height under Fascist theory and execution;likewise Keynesian Economic Theories lead to the overwhelming necessity of suchintervention. The Fascists, in particular the National Socialist Party [Nazi],were the first to put into practice the economic theories found in Keynes' GeneralTheory; the Nazis implemented truly massive public works projects and increaseddeficit spending seeking to encourage full employment of the German peoples. TheNazis also created what amounts to an inflationary boom, this naturally increasedproductivity, but as we know it was based on the assumption that an inflationaryboom can be permanent when in fact they are artificially induced and willeventually deflate.The fact is that inflationary booms are nothing more than the consciousapplication of Keynesian policies, which naturally lead to even more governmentintervention due to the effects brought about by the collapse of such inflationarybooms. Whether Marxist, Socialist or even Fascist, Keynesian Economic Theoryprovides the necessary economic system to achieve government involvement in thesocial relationships of economic production.When a government employs Keynesian Economic Theory there is the inexorabletendency toward more and more government intervention into every area of economicfunctioning within the market. Actual regulation of the capitalist economy haslittle to do with what is finally arrived at through the policies employed and areonly the medium by which greater intervention becomes necessary. The theoreticalwork of Keynes, as well as others, cannot be underestimated and should not beconfused in judging cause and effect; hearkening back to the words of Strachey,there is an inherent process within the mechanics of Keynesian Economics thatpromotes the implementation of Socialist Political Economics, thus replacing freemarket capitalism with government intervention. Generally speaking, while there

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