3 June 2021 - 3:36 pm
A long, long time ago in 2018 for those that can remember that far back, the UK Prime Minister Teresa May declared there was no “magic money tree”. At the time it was mostly seen as a typical Tory response to the idea of pay increases for Public Sector workers, mostly the perennially hard-done-by nurses, the poster-children of Conservative austerity measures and how unfair it all is. Even before that in 2017, the lovely Amber Rudd “blasted” Jeremy Corbyn’s election manifesto with the line “stop thinking there’s a magic money tree” as reported here.
Some time later there were a few edgy mainstream articles suggesting that the “magic money tree” had been found, conveniently, when May needed some allies to form a Government and other opportune moments the Government needed some cash for a pet project or to assist a friend.
The phrase “magic money tree” can be replaced with “Modern Monetary Theory” seamlessly. The obvious advantage is the acronym is the same for those that like that sort of thing (and we know Governments love a good acronym) and it simultaneously does exist and doesn’t, it operates in the exact same way, as it is based on the exact same amount of reality, i.e. zero.
Of course, we have once again strayed into the realm of the False Dichotomy. The obvious setup being the fake choice of State Austerity, or State Spendfest, backed by MMT. So now we have constant arguments in the media, between politicians and economists attempting to convince us that only one of these options is correct, and we must pick one.
So what is MMT, other than appearing synonymous in its mechanisms to a magic money tree? The not entirely trustworthy Wikipedia has a page about it. There are lots of citations, quotes and claims that MMT is not the same/similar/the same as “Mainstream Keynesian” economics. The only thing you really need to know about MMT is this:
MMT’s main tenets are that a government that issues its own fiat moneyhttps://en.wikipedia.org/wiki/Modern_Monetary_Theory
You are here. Regardless of the abstraction of how this works, the talk of bond buying from Central Banks and issuance of money, we are at a point where Governments have zero constraints on what they can “borrow” and so to all intents and purposes the State is effectively issuing its “own fiat money”. It is not backed by anything other than the notional belief that future generations of taxpayers will pay it back, which is clearly impossible and cannot be considered founded in reality by anyone who isn’t insane. The details about interest rates and the intricacies of comparing Mainstream Keynesian ideas and MMT is pointless. The five listed tenets of MMT all agree with Keynesian ideas apart from one, that “Bond issues are a monetary policy device, not a funding device”, which simply doesn’t matter anymore and is only a matter of semantics.
When you have the former Chair of the Federal Reserve Alan Greenspan quoted as saying…
“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.”
…then all links to reality have been severed. Alexandria Ocasio-Cortez called for MMT to become “part of the conversation” in early 2019, just as the demand for it to rain money increased, again, due to the COVIDs coming to get us.
So as we’ve seen, Keynesian economics and MMT are virtually the same, save a few minor technicalities and labeling some things differently. But what we are told is Keynesian economics is not really what Keynes himself actually wanted for the financial “State of the World”.
John Maynard Keynes, the “father” of Keynesian economics was an interesting chap. Wikipedia presents him as a largely unsung hero, where his ideas fell out of favour because of 1970-80’s politicians like Ronald Reagan and Margaret Thatcher cherry-picking deregulation ideas from someone like Milton Friedman to enable the obvious consequence of the eventually created financial bubbles to burst in 2007-2008. It says…
…the advent of the global financial crisis of 2007–2008 sparked a resurgence in Keynesian thought. Keynesian economics provided the theoretical underpinning for economic policies undertaken in response to the financial crisis of 2007–2008 by President Barack Obama of the United States, Prime Minister Gordon Brown of the United Kingdom, and other heads of governments.https://en.wikipedia.org/wiki/John_Maynard_Keynes
The key word is “theoretical”. Like much economic discussion, computer modelling and technocratic ideologues predicting (or programming) the behaviour of the entire human race, it is mostly fiction. Occasionally an aspect of some huge essay on economic policy will momentarily align with observable reality and that will be hailed as “proof” they got it right, that they actually know what they’re talking about and this is all empirical. Just in the same way someone visiting the beach and finds the tide is in on the few occasions they are there deciding that they must have caused the tide to be in, this is nonsense.
Of course there are very real, empirical and non-theoretical consequences to these theoretical economic policies. Just as the theory I could fly if I flapped my arms would result in a real-life (or absence of) consequence if I actually tried it from the top of a tall building, we have seen boom/bust cycles, bail-outs and bail-ins, people lose their homes and jobs and the richest get richer. That is all very real, and they are consequences of this garbage economic policy that is only there to serve the people who implement and enforce it.
These people are not stupid though. John Maynard Keynes was not a stupid person. Does he really believe that his economic ideas are workable, helpful and are the best way of managing national/international finance? Well it all depends on what the goal is, like all politically driven ideas. If you believe the adverts and think Keynes and his ilk are really trying to just make the world better for you and me, then you’d have to question his competence and possibly his sanity. The reality is, the goals of Keynes and Co are not what they are claimed to be. That is the only logical explanation for these people being propelled to stardom, heralded as humanity’s saviours and these obviously failed ideas are resurrected time and time again when it suits, despite all the evidence proving they are the last people we should be either listening to, or having our lives dictated to us by.
So what are the actual goals? There are two theories that have driven policy for decades, and they are those of Thomas Malthus, and of Francis Galton, a cousin of Charles Darwin who invented the term “eugenics” in 1883. Malthus became an overnight sensation after anonymously publishing his “Essay on the Principle of Population” in 1798 and according to this site was “was so successful that Malthus soon elaborated on it under his real name” and eventually culminated in a 6th edition published in 1826. In this edition, in a section called “Of the Consequences of pursuing the opposite Mode” there is a chapter that starts with this…
It is an evident truth that, whatever may be the rate of increase in the means of subsistence, the increase of population must be limited by it, at least after the food has once been divided into the smallest shares that will support life. All the children born, beyond what would be required to keep up the population to this level, must necessarily perish, unless room be made for them by the deaths of grown persons. It has appeared indeed clearly in the course of this work, that in all old states the marriages and births depend principally upon the deaths, and that there is no encouragement to early unions so powerful as a great mortality. To act consistently therefore, we should facilitate, instead of foolishly and vainly endeavouring to impede, the operations of nature in producing this mortality; and if we dread the too frequent visitation of the horrid form of famine, we should sedulously encourage the other forms of destruction, which we compel nature to use. Instead of recommending cleanliness to the poor, we should encourage contrary habits. In our towns we should make the streets narrower, crowd more people into the houses, and court the return of the plague. In the country, we should build our villages near stagnant pools, and particularly encourage settlements in all marshy and unwholesome situations.https://www.econlib.org/library/Malthus/malPlong.html?chapter_num=47#book-reader
Despite articles written “In Defense of Malthus” where it is usual to claim he was misrepresented in some way, or present a strawman argument that deliberately conflates any objection to Malthus’ suggestion we should “court the return of the plague” as the rantings of a religious zealot who shouts that Malthusian “logic” is anti-Bible, these ideas are indefensible.
Charles Darwin was inspired by Malthus, writing this in his autobiography…
In October 1838, that is fifteen months after I had begun my systematic enquiry, I happened to read for amusement Malthus on Population, and being well prepared to appreciate the struggle for existence which everywhere goes on from long-continued observation of the habits of animals and plants, it at once struck me that under these circumstances favourable variations would tend to be preserved, and unfavourable ones to be destroyed. The result of this would be the formation of a new species. Here, then, I had at last got a theory by which to work….https://www.pbs.org/wgbh/evolution/educators/course/session2/explain_c_pop1.html
Darwinism is then, an extension of Malthusian ideas of social theory, basic survival predicated on there not being too many mouths for the limited “subsidence” to feed. Then Francis Galton took his cousin Darwin’s theories, re-applied them to human society for population control with the brand name “Eugenics” which added a so-called “scientific validation” to the usual ruling class favourites like slavery and imperialism.
How does this relate to John Maynard Keynes? Well Wikipedia does give us a clue. As of today (3rd June 2021) listed among “influences” on the page about Keynes is Thomas Malthus. Also, in Keynes’ “Essays in Biography” which was published in 1933 it is clear that the idea of “demand deficiency” that was espoused by Malthus in the 1800s became the idea Keynes was pushing once he’d discovered it and then needed to refute much of his previous output based on some other ideas he’d plagiarised.
In an article titled “Dialectical Materialism and Science” by Leon Trotsky in the February 1940 edition of The New International, Trotsky observes…
The leaders of English industry see the salvation of society in emigration, in forcing out the surplus population. Even the more “progressive” economist, Mr. Keynes told us only the other day that the salvaging of English economy lies in Malthusianism! . . . For England, too, the road of overcoming the contradictions between city and country leads through Socialism.Page 32 – https://www.marxists.org/history/etol/newspape/ni/vol06/no01/v06n01-feb-1940-SWP.pdf
Speaking at the Galton Lecture in 1946, Keynes said…
Galton’s eccentric, sceptical, observing, flashing, cavalry-leader type of mind led him eventually to become the founder of the most important, significant and, I would add, genuine branch of sociology which exists, namely eugenics.Page 2 – https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2986310/pdf/eugenrev00247-0048.pdf
Later when talking about Sir Alexander Carr-Saunders, the recipient of the Galton Gold Medal of the Eugenics Society, Keynes said…
Charles Darwin incidentally repaid a debt. Whilst Darwin was first led to his theories by reading Malthus, Carr-Saunders was led to Malthus through Darwin. Problems of population became his main concern, but essentially approached through the biological background of man and his habits and customs and not primarily through the economic approach.
John Maynard Keynes was then, a devout Malthus worshipper and supporter of Galton’s Eugenics, to the point that he personally awarded medals at Eugenics Society meetings and eulogised about Malthus and his influence on Darwinism.
His contribution at the Bretton Woods Conference in July 1944 was to campaign for a global currency called the “Bancour” and an international clearing house, thereby establishing a Malthus inspired technocratic banking dictatorship. This was considered a bit of a leap at the time, being the Trotsky-acknowledged “progressive” economist he was, and so it had to wait until more favourable conditions could be engineered.
Just as 9/11 was the “catalyzing event”, the “new Pearl Harbour” as described by the Project for the New American Century that provided the required opportunity for long-standing plans to get the go-ahead, now the likes of Klaus Schwab, Mark Carney and other financial elites who have driven the collective world’s economies off a cliff and then some, are poised for their Bretton Woods 2.0, along with Keynesian dreams of a global currency and are using the COVID scam as their “catalyzing event”.
Keynes and his economic, social and political ideas were never about making Joe Public’s life better. They were always about empire building, Eugenics and ultimate control. The globalist institutions pushing Keynesian nonsense now weren’t fooled by the thin veneer of “progressive” talk or notions of pro-democracy that Keynes and his defenders will try and use to divert attention from the thoroughly evil ideas based on pseudo-science and racist warmongering that he and his club all believe in. They were never fooled by it, and they aren’t now. They actually believe they have the right to push these policies and they need to be opposed at all costs.