Here is the evidence that the most influential economist of modern times was not just a Fabian socialist, but that he was sympathetic to the communist cause.
I've been reading "The Forgotten Man" by Amity Shlaes - a narrative account of the 20's-30's focused on the Depression. It's a powerful reminder of how Mussolini, Stalin and Hitler and Socialism were all viewed very favorably by many "progressives" in the west. It was time when various forms of planned economies all seems modern and avant-garde to a whole class of east coast elites who largely seemed embarrased by America and looked to Europe as the source of modernity.
We must also remember that these folks did not have the history we know to temper their interest. At the same time, as the New Deal unfolded we can see a consistent bias toward compulsion and appeals to the collective in policy and implementation.
It's also interesting to look at some of the parallels between Trump and FDR as political phenomenon. One thing that strike me is how FDR, like Trump was accused to holding multiple, contradictory positions at once, being unpredictable and going in seemingly opposite directions at the same time undermining his own negotiations etc...
The parallels between Trump and FDR, Jimmy Carter and Ronald Reagan, and, most interestingly, the parallels between Jimmy Carter and Donald Trump, who have very similar policies. Not including the raising of interest rates, which Jimmy Carter hired Paul Volker to do. Though I DO believe that Trump will have to raise interest rates, while currently he promotes cutting them.
While the video seems to make a plausible case for Keynes being a Socialist, once you unpick it you see it's mostly based on quotes taken out of context, together with some guilt by association.
To address some of the points, Keynes's flirtation with the Fabians at Cambridge stemmed from his love of argument, plus undoubtedly there would have been some attractive young men in the circle. Keynes prided himself on always being able to come out on top of any argument, and his role as tutor at King's would have included encouraging debate.
While he kept contact throughout his life with other Fabians, he was never a believer, preferring the more louche and interesting company of the Bloomsbury set.
As for the economics, it has to be remembered that he was writing in an age when the 'animal spirits' which had driven capitalism in the 19th century had pretty much disappeared, and it was generally thought that the world was entering into a new age defined by Socialist principles. It's in this context his statements that the state needs to take on the mantle of directing the economy has to be seen. There was nothing unusual about this view at the time. Even well-informed and well-connected people really thought that the age of capitalism might be coming to an end with the near collapse of the banking system.
The idea touted in the video that he was some sort of closet Bolshevik revolutionary really doesn't stand up to scrutiny. He visited the Soviet Union in 1925 and was very aware of what was happening there. On his return he stated:
"Red Russia holds too much which is detestable. I am not ready for a creed which does not care how much it destroys the liberty and security of daily life, which uses deliberately the weapons of persecution, destruction and international strife. How can I admire a policy which finds a characteristic expression in spending millions to suborn spies in every family and group at home, at to stir up trouble abroad?"
And (on Bolshevism / Marxism):
"How can I accept a doctrine which sets up as its bible, above and beyond criticism, an obsolete economic textbook which I know not only to be not only scientifically erroneous but without interest or application in the modern world?"
And:
"How can I adopt a creed which, preferring the mud to the fish, exalts the boorish proletariat above the bourgeois and intelligentsia who, with whatever faults, are the quality in life and surely carry the seeds of all human advancement? Even if we need a religion, how can we find it in the turbid rubbish of the Red bookshops?"
And as he said to Bernard Shaw on Marx's Kapital:
"I know that many people, not all of whom are idiots, find it a sort of Rock of Ages".
Hardly the views of a closet Bolshevik.
Lastly, the idea that his brother Geoffrey suppressed Keynes's closet Bolshevism and constructed a myth that he was really a Liberal doesn't stand up in the light of the above. Given that Keynes documented and detailed his numerous and various erotic adventures, it's far more likely that his papers were redacted to suppress knowledge of Keynes's early homosexuality. Later on in less censorious times these restrictions were lifted, albeit only to serious researchers.
Describing Keynes as a Socialist is reductive, as admittedly is describing him as a Liberal. In reality Keynes hankered after the England of pre-WWI, even though he realised that world was gone forever. His attachment to Liberalism was out of a kind of traditional sense of duty, even though he would have known that the Liberal Party was a spent force.
While what's come to be known as Keynesianism undoubtedly has Socialist characteristics, the man himself was never a committed believer.
Mr. Law, according to a serious inquiry Keynes brought Fabian/Socialism to Harvard University. See the first two pages in the Preface of KEYNES AT HARVARD. as my source:
The way I see it is like this. Ever since the mid-1800's with the writings of Marx and Darwin it was widely believed that the world would "inevitably" evolve towards a Socialist or even Communist means of organising society.
This belief was held by many of those right at the top of society, including high church Tories (and people at Cambridge, of course). As John Gray and others have pointed out, the idea is essentially a consequence of Enlightenment thought, whereby Socialism / Communism becomes a direct substitute for Christianity, though few noticed this at the time.
So after the cataclysm of the Great War, which was widely considered to be the result of unconstrained self-interest as expressed through capitalism, the determination that capitalism should be replaced was widespread and uncontroversial, both in the UK and the US (with FDR, as the pdf points out). It's in this context that I think Keynes's writings on economics have to be considered.
From that standpoint, there's no real dispute that what has come to be labelled Keynesianism is entirely Socialistic, and no surprise the Fabians should hold it up as a model for a Socialist economy.
What I felt had to be challenged was the idea that Keynes was some sort of closet and committed revolutionary. Given the context, his economics were closer to being mainstream, as they have been more or less since.
So while it's probably fair to describe the public face of Keynes as Socialist, the character of the man himself is much more nuanced (as is everyone else's).
His position, writings and eminence brought him status, and, more importantly to him, contact with interesting and powerful people. Even then, he found much of his official work a tedious chore, and would have much rather have spent his time hanging out with artistic types.
What's more interesting from the point of view of the present day, is that the Socialism the Fabians envisaged is nothing like the 'equality for everyone' you find expressed by your average Labour Party supporter. What they envisaged was rule by a technocratic elite, with the vast majority of the population living in a state of serf-like dependency (*). Keynes and other members of his class understood this perfectly, so were happy for the masses to have Socialism while the elite continued to live a privileged existence. It was also seen as the way to prevent a descent into Communism, which, given events in Russia, the aristocracy especially was keen to avoid. Understanding that Socialism was the way things were heading isn't the same thing as being a committed Socialist though.
Sadly, it's Technocracy where we're headed. H.G.Wells (another early Fabian) embraced it, while Orwell (and Hayek) saw the dangers.
Can we leave it there?
(*) See the writings of Bertrand Russell, another upper-class Fabian, and friend of Keynes from Cambridge.
This latest comment Mr. Robert Law is quite profound and I am honored sir to have engaged in debating/discussing this controversy with you. In fact what you have illuminated in your comment is the very essence of my posit regarding the Fabians model of: (1) an elite-moneyed class, (2) over a technocracy state with (3) "hewers of wood and carriers of water" as the serf-like dependents.
I'll take what ChatGPT says about Keynes and Keynesianism, and Fabian Socialism more generally, as a vindication of my views on the subject.
Obviously, that's quite encouraging for me.
In simplest terms, under democracy, in order to get elected political parties make promises to their electorates which invariably involve them spending more than they can rake in from taxation, welfarism being the obvious example (pensions, healthcare, unemployment benefit, sickness benefit &c &c).
This inevitably leads to indebtedness. If a government isn't going to default outright, it can suppress the real value of the debt by devaluing the currency through inflating the supply, and effectively confiscate wealth from its citizens (as Keynes said), to pay it down (to some extent at least). They then try to convince their electorates that inflation is some kind of force of nature, or blame it on the Russians, or whatever the excuse of the day is. The other trick is to come up with completely bogus measurements of price inflation, which always hugely understate the reality, especially when it's advancing towards the peaks. (See truflation.com)
This was true even during the era of the various gold standards, but now with nothing providing an unbiased reference anchor, and basically all governments resorting to the same trick, the result is that essentially all governments are in a debt trap.
Alasdair has made these points on numerous occasions.
What I'd add is that to mitigate the effects of their indebtedness, governments, through their "independent" central banks, use interest rate suppression, leading to "stimulus" through availability of cheap "money", which through history has lead to malinvestments and asset bubbles.
Edward Chancellor's book The Price of Time is a good account of this.
This creates a huge irony which is that socialistic policies like Keynesianism and related welfarism actually increase wealth inequality, which is the direct opposite of the intended effect.
So let's put that to one side and deal with the subsequent conversation.
It's *very* interesting that, without you explicitly bringing up the topic, the ChatGPT response goes on to mention monetisation of energy (entropy), decentralised finance (DeFi), and digital currency (Bitcoin & stablecoins).
And while, as you say, the Trump team is packed with (hyper-)Keynesians, the fact that these things are being discussed at the highest levels is probably indicative that they know the present model is running out of road, and that when the crash comes ("inevitable debt implosion") it's going to be very nasty indeed.
It was a surprise to me that the responses went so far into the political dimension, and lurking in the background to a lot of the discussion is the figure of Elon Musk.
You might know this, but Musk's grandfather was deeply involved in the Technocracy movement, which emerged in the US directly after the First World War. One of their aims was total technocratic government, with a currency operating on a universal basic income (UBI) basis and based on energy consumption (like carbon credits). One of the other ideas coming out of this movement was the Technate, a physical realm of the technocracy encompassing all of North America and extending south as far as Venezuela (where the oil is). It's surely no accident that Trump's recent statements on Canada and Greenland derive directly from these ideas.
One interesting additional factoid is that the German rocket scientist Wernher von Braun whom the Americans captured to kickstart their rocket program wrote a science fiction novel The Mars Project where the Martian government leader is named as the "Elon".
So the tokenisation of energy idea goes a long way back, and while the technology didn't exist to make it a reality in the 20's and 30's, it does now.
Gold, after all, can be seen in this way, since you have to expend energy to get it out of the ground, but if everyone could just dig it up out of their garden, it would have no value.
Arguably, Bitcoin is the same, being based on a proof-of-work (i.e. energy) algorithm. Also, Bitcoin's origins are still obscure, and while the Satoshi Nakamoto narrative can seem an attractive one, it has all the hallmarks of a Deep State operation.
Lastly, going back to the related stablecoin idea, I'm quite taken with the "Bitcoin-is-the-new-oil" argument (there's a Luke Gromen video on YouTube about this). The idea is that by making Bitcoin a reserve asset, buyers would first need to buy a dollar-backed stablecoin (probably Tether) and thereby sustain the demand for dollar assets and allow the US to continue to run twin deficits.
Incidentally, or maybe coincidentally, Tether is now one of the biggest holders of US Treasuries, exceeding those of many sovereign states.
You could possibly see that as a bridge to an ultimate energy-based currency token.
Interesting discussion, but then we live in interesting times...
I heard years ago that the Russians almost starved to death because no one was motivated to go pick potatoes. Seems communism doesn't provide enough incentive to work, as all outcomes are the same, no?
That is essentially what happened to the Pilgrims of Massachusetts: William Bradford, the governor of Plymouth Colony, played a crucial role in the transition from a communal land system to one based on private property rights. Initially, the colony operated under a communal system where all land and resources were held in common, and the fruits of labor were shared equally. This system, however, led to significant problems, including a lack of motivation to work and widespread discontent among the colonists.
By the spring of 1623, the colony was facing severe food shortages and was barely able to sustain itself. In response, Bradford and the other leaders decided to assign each family a parcel of land to work for their own benefit. This change had a dramatic positive effect:
Increased Productivity: The new system made all hands very industrious, leading to a significant increase in the amount of corn planted and harvested. Bradford noted that this change "had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been".
Reduced Conflict: The assignment of private land parcels reduced the confusion and discontent that had plagued the community under the communal system. It fostered a sense of ownership and responsibility, which in turn improved the overall morale and productivity of the colonists.
Sustainability: The shift to private property rights ensured that the colony could sustain itself and grow. The colonists no longer faced the starvation and food shortages that had characterized the first three years of the settlement.
This decision by Bradford and the other leaders is often cited as a pivotal moment in the history of the Plymouth Colony, demonstrating the practical benefits of private property rights in fostering economic prosperity and social stability.
You are exactly correct. English colonists tried it and it failed. As soon as they parceled out the land to individual families and let them take control, the people prospered. As someone said, "Those that don't know their history are doomed to repeat it."
Erroneous conclusion, Indians had been around a long time.
Corn indeed was the major contributor to the ultimate survival of the Pilgrims, but they didn't have corn until Squanto the Socialist gave them the seeds.
Incidentally, Squanto died in November 1622, while leading a trading expedition. So apparently their trying to make him a capitalist is what killed him.
J.M. Keynes ....' Fabian Socialist ' ....' Communist Sympathiser ' .....' Economic Fruit Cake ' - all of these + reputedly from various sources a sadist and pursuer of little boys as well . Decidedly not the sort of person you'd ordinarily ever want as a dinner guest .
He also was a mouthpiece of the Rothschilds (as Marx was), who financed and promoted him and his absurd theory (parallel to Einstein). They are Satanists; do what you want, turn upside down, deny God and god-given money.
He was a Liberal in the Asquith mould, campaigned for the Liberals in elections, and even stood for Parliament as a Liberal candidate, albeit in a seat he knew he wouldn't succeed in. Once ennobled, he sat on the Liberal Party benches in the House of Lords.
What became known as Keynesianism, which is the deliberate expansion of credit to stimulate the economy, was a specific policy for a specific time. In particular, it was needed in the 1930's following the massive disruptions in the financial system resulting from the Great War, and especially because Churchill had put the sterling back on the gold standard at the pre-war level, which was totally ruinous for UK manufacturing, a position from which it has never recovered.
The result was mass unemployment and destruction of productive capacity.
The stimulus measure was to stave off a Socialist or Communist revolution, not to encourage one.
Even in his own lifetime, he asserted that he wouldn't ever describe himself as a Keynesian.
He also famously said that if circumstances change, he would change his opinion accordingly, which is hardly the position of a dogmatist.
Unfortunately, Keynesianism has lived on as a Socialistic policy, but you can't really blame Keynes for that.
As for brother Geoffrey, I wouldn't necessarily trust what he says, particularly on the basis of a comment taken out of context. It was Geoffrey who was married into the Darwin clan, so was much closer to the eugenicists and Fabians in outlook than Maynard.
Rubbish: John Maynard Keynes, an influential economist, was indeed a member of the British Fabian Society and was deeply influenced by Fabian socialist ideas. Fabian Socialism, founded in London in 1883, aimed to achieve socialism through gradual and incremental reforms rather than through violent revolution.
Keynes's association with the Fabian Society began early in his career. He was introduced to Fabian socialist ideas through his connections with G. Lowes Dickinson, Leonard Woolf, and G.E. Moore at Cambridge University. His close friendships with prominent Fabians like Sidney Webb, Beatrice Webb, and George Bernard Shaw further solidified his ties to the movement.
“By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some….The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose.”*** John Maynard Keynes ~ 1920
Keynes was not a Fabian. He was certainly a member of the same social set as the Fabians you mention, but that doesn't mean he shared their ideas.
There is no evidence he ever advocated the replacement of capitalism by Socialism, gradually or otherwise.
His often quoted remark on inflation can't be taken as his being an advocate of inflationism, other than as a specific policy for a specific time, rather that he understood its consequences for the general population.
The neoclassical–Keynesian synthesis or neoclassical synthesis (NCS), is an academic movement and paradigm in economics that worked towards attempting to reconciling the macroeconomic thought of John Maynard Keynes in his book The General Theory of Employment, Interest and Money (1936) with neoclassical economics.
The synthesis is a macroeconomic theory that emerged in the mid-20th century, combining (synthesizing) the ideas of neoclassical economics with Keynesian economics. The synthesis was an attempt to reconcile the apparent differences between the two schools of thought and create a more comprehensive theory of macroeconomics. It was formulated most notably by John Hicks (1937), Franco Modigliani (1944), and Paul Samuelson (1948), who dominated economics in the post-war period and formed the mainstream of macroeconomic thought in the 1950s, 60s, and 70s.
The Keynesian school of economics had gained widespread acceptance during the Great Depression, as governments used deficit spending and monetary policy to stimulate economic activity and reduce unemployment. However, neoclassical economists argued that Keynesian policies could lead to inflation and other economic problems. They believed that markets would eventually adjust to restore equilibrium, and that government intervention could disrupt this process.
In the 1950s and 1960s, economists like Paul Samuelson and Robert Solow developed the neoclassical synthesis, which attempted to reconcile these two schools of thought. The neoclassical synthesis emphasized the role of market forces in the economy, while also acknowledging the need for government intervention in certain circumstances. According to the neoclassical synthesis, the economy operates according to the principles of neoclassical economics in the long run, but in the short run, Keynesian policies can be effective in stimulating economic growth and reducing unemployment. The synthesis also emphasized the importance of monetary policy in controlling inflation and maintaining economic stability. Overall, the neoclassical synthesis was a significant development in the field of macroeconomics, as it brought together two previously competing schools of thought and created a more comprehensive theory of the economy.
However, a series of developments occurred that shook the neoclassical synthesis in the 1970s as the advent of stagflation and the work of monetarists like Milton Friedman cast doubt on the synthesis' conceptions of monetary theory. The conditions of the period proved the impossibility of maintaining sustainable growth and low level of inflation via the measures in the Keynes General Theory of deficit government spending and socialist central government planning.
Have you read any of the Keynes biographies? I have.
Or 1984?
You might actually learn something if you did.
The Ministry of Truth was engaged in rewriting history to suit the purposes of the Party.
Nowadays it's the internet where truth gets rewritten, which leads to people like you spouting random stuff you found on the internet just because it suits your views.
Mr. Law, why is it that your ilk always reacts with an ad hominem attack when you are cornered intellectually? Of course Orwell's Ministry of Truth engaged in rewriting history. An example of rewriting history are the Keynes biographies you refer to.
That said Mr. Law, here is a Google Docs link to my research into the socioeconomic transition of THE THIRD WAVE. It is a work in progress and my response to your statement: "If anyone's a Minitrue victim, it's you."
Ronald Reagan and Margaret Thatcher's Ministry of Truth.
Now we have BoJo the Clown, Kier Starmer (Kier Stormer 008 is the moniker Alex Christoforo gave him.) and Donald Trump -- he even calls it "Truth Social". You can't make this stuff up.
Bolshevism is cancer. Bolshevism is Jewish. If you have not read any of Solzhenitsyn work, well he has been issuing warnings for years. Or you could look outside your door. It’s right there. We are swimming in this sewage. The aim is to rot everything. To destroy Amelek. They kindly spell it all out for you…if you listen. Then ponder - supposing Freud was making it all up. Fuck these people are cancer. “We got the wrong guy”. General Patton
“By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some….The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose.”*** John Maynard Keynes ~ 1920
Thank you Alasdair. That was a very enlightening presentation. The sad state of affairs is that we have reached the point where the finger pointing on whose theory has caused the financial problems is more important than fixing the problem. I sense that auditing the US gold reserves has “died on the vine” so to speak and that gold/silver/commodities will only continue to march ahead as priced in fiat currencies until reality hits all insolvent countries populations. What a world-wide mess.
Jimmy Carter tried to get us off the Keynesian Economics slippery slope, but then Ronald Reagan put us back onto the Primrose Path to where we are now.
The "government CONTROL of production" which Edward Fuller points out as a key component of his definition of "socialism" exemplifies that Reaganomics was the jumping off point into our long, slow burn. First Military Industrial, now Agricultural Industrial, Educational Industrial, Pharmaceutical Industrial and Healthcare Industrial Complexes.
We're so far Through the Looking Glass that we now have Ukraine -- the most nationalist socialist Rump State in the history of civilization.
However, Edward Fuller is absurd when he says at the end that we're still on the Fractional Reserve System. Creeping socialism went hand in hand with the detachment from Fractional Reserve over these past 40 years. Reaganomics also made the initial move to where the limit went from 10 to 1, to 15 to 1, for how many times The Banksters were allowed to lend out their reserve capital. It was, incidentally, August of 2019 when Trump made the ratio Infinity to 1.
In so far that politics is about directing how the earthly assets should best to used for the benefit of the human race as a whole, I strongly believe that the best is maintaining the balance act between the selfish and the common. The right and the left are both only looking to steer the society in favour of their own selfishness while projecting the bad and evil on the others.
Then, of course, politics should be about much more, because the distribution of the material is only a part of what is beneficial to humans both as indivduals and as a society as a whole. But that is conveniently most often overlooked by the materialists.
Thanks Alasdair for bringing our attention to this great expose of the history of macroeconomics and that the IS LM model was written to justify socialism Lucas' DSGE was just an expression of Keynes' IS LM And so Keynes General Theory was responsible for 2008 and will be responsible for this disastrous bubble and its impending burst von Mises' truth will eventually win out but will take time
Can there be a balance between socialism and capitalism where egalitarian policies can be married to protections of government to fend off crooks, frauds, cronyism, and greedy corporatists and what would that look like in economic policy?
The short answer is "no". The problem is the human heart - it is corrupt and deceitful. Therefore any institution or endeavour undertaken by humans will be fraught with problems and suceptible to corruption. (Sorry about my spelling) Fix the human heart and you fix a lot of things.
I've been reading "The Forgotten Man" by Amity Shlaes - a narrative account of the 20's-30's focused on the Depression. It's a powerful reminder of how Mussolini, Stalin and Hitler and Socialism were all viewed very favorably by many "progressives" in the west. It was time when various forms of planned economies all seems modern and avant-garde to a whole class of east coast elites who largely seemed embarrased by America and looked to Europe as the source of modernity.
We must also remember that these folks did not have the history we know to temper their interest. At the same time, as the New Deal unfolded we can see a consistent bias toward compulsion and appeals to the collective in policy and implementation.
It's also interesting to look at some of the parallels between Trump and FDR as political phenomenon. One thing that strike me is how FDR, like Trump was accused to holding multiple, contradictory positions at once, being unpredictable and going in seemingly opposite directions at the same time undermining his own negotiations etc...
The parallels between Trump and FDR, Jimmy Carter and Ronald Reagan, and, most interestingly, the parallels between Jimmy Carter and Donald Trump, who have very similar policies. Not including the raising of interest rates, which Jimmy Carter hired Paul Volker to do. Though I DO believe that Trump will have to raise interest rates, while currently he promotes cutting them.
While the video seems to make a plausible case for Keynes being a Socialist, once you unpick it you see it's mostly based on quotes taken out of context, together with some guilt by association.
To address some of the points, Keynes's flirtation with the Fabians at Cambridge stemmed from his love of argument, plus undoubtedly there would have been some attractive young men in the circle. Keynes prided himself on always being able to come out on top of any argument, and his role as tutor at King's would have included encouraging debate.
While he kept contact throughout his life with other Fabians, he was never a believer, preferring the more louche and interesting company of the Bloomsbury set.
As for the economics, it has to be remembered that he was writing in an age when the 'animal spirits' which had driven capitalism in the 19th century had pretty much disappeared, and it was generally thought that the world was entering into a new age defined by Socialist principles. It's in this context his statements that the state needs to take on the mantle of directing the economy has to be seen. There was nothing unusual about this view at the time. Even well-informed and well-connected people really thought that the age of capitalism might be coming to an end with the near collapse of the banking system.
The idea touted in the video that he was some sort of closet Bolshevik revolutionary really doesn't stand up to scrutiny. He visited the Soviet Union in 1925 and was very aware of what was happening there. On his return he stated:
"Red Russia holds too much which is detestable. I am not ready for a creed which does not care how much it destroys the liberty and security of daily life, which uses deliberately the weapons of persecution, destruction and international strife. How can I admire a policy which finds a characteristic expression in spending millions to suborn spies in every family and group at home, at to stir up trouble abroad?"
And (on Bolshevism / Marxism):
"How can I accept a doctrine which sets up as its bible, above and beyond criticism, an obsolete economic textbook which I know not only to be not only scientifically erroneous but without interest or application in the modern world?"
And:
"How can I adopt a creed which, preferring the mud to the fish, exalts the boorish proletariat above the bourgeois and intelligentsia who, with whatever faults, are the quality in life and surely carry the seeds of all human advancement? Even if we need a religion, how can we find it in the turbid rubbish of the Red bookshops?"
And as he said to Bernard Shaw on Marx's Kapital:
"I know that many people, not all of whom are idiots, find it a sort of Rock of Ages".
Hardly the views of a closet Bolshevik.
Lastly, the idea that his brother Geoffrey suppressed Keynes's closet Bolshevism and constructed a myth that he was really a Liberal doesn't stand up in the light of the above. Given that Keynes documented and detailed his numerous and various erotic adventures, it's far more likely that his papers were redacted to suppress knowledge of Keynes's early homosexuality. Later on in less censorious times these restrictions were lifted, albeit only to serious researchers.
Describing Keynes as a Socialist is reductive, as admittedly is describing him as a Liberal. In reality Keynes hankered after the England of pre-WWI, even though he realised that world was gone forever. His attachment to Liberalism was out of a kind of traditional sense of duty, even though he would have known that the Liberal Party was a spent force.
While what's come to be known as Keynesianism undoubtedly has Socialist characteristics, the man himself was never a committed believer.
Mr. Law, according to a serious inquiry Keynes brought Fabian/Socialism to Harvard University. See the first two pages in the Preface of KEYNES AT HARVARD. as my source:
https://www.bigskyworldview.org/content/docs/Library/Keynes_At_Harvard.pdf
You claim Keynes was NOT a Fabian/Socialist, the book linked above disputes your claim.
An interesting, if somewhat polemical tract.
The way I see it is like this. Ever since the mid-1800's with the writings of Marx and Darwin it was widely believed that the world would "inevitably" evolve towards a Socialist or even Communist means of organising society.
This belief was held by many of those right at the top of society, including high church Tories (and people at Cambridge, of course). As John Gray and others have pointed out, the idea is essentially a consequence of Enlightenment thought, whereby Socialism / Communism becomes a direct substitute for Christianity, though few noticed this at the time.
So after the cataclysm of the Great War, which was widely considered to be the result of unconstrained self-interest as expressed through capitalism, the determination that capitalism should be replaced was widespread and uncontroversial, both in the UK and the US (with FDR, as the pdf points out). It's in this context that I think Keynes's writings on economics have to be considered.
From that standpoint, there's no real dispute that what has come to be labelled Keynesianism is entirely Socialistic, and no surprise the Fabians should hold it up as a model for a Socialist economy.
What I felt had to be challenged was the idea that Keynes was some sort of closet and committed revolutionary. Given the context, his economics were closer to being mainstream, as they have been more or less since.
So while it's probably fair to describe the public face of Keynes as Socialist, the character of the man himself is much more nuanced (as is everyone else's).
His position, writings and eminence brought him status, and, more importantly to him, contact with interesting and powerful people. Even then, he found much of his official work a tedious chore, and would have much rather have spent his time hanging out with artistic types.
What's more interesting from the point of view of the present day, is that the Socialism the Fabians envisaged is nothing like the 'equality for everyone' you find expressed by your average Labour Party supporter. What they envisaged was rule by a technocratic elite, with the vast majority of the population living in a state of serf-like dependency (*). Keynes and other members of his class understood this perfectly, so were happy for the masses to have Socialism while the elite continued to live a privileged existence. It was also seen as the way to prevent a descent into Communism, which, given events in Russia, the aristocracy especially was keen to avoid. Understanding that Socialism was the way things were heading isn't the same thing as being a committed Socialist though.
Sadly, it's Technocracy where we're headed. H.G.Wells (another early Fabian) embraced it, while Orwell (and Hayek) saw the dangers.
Can we leave it there?
(*) See the writings of Bertrand Russell, another upper-class Fabian, and friend of Keynes from Cambridge.
This latest comment Mr. Robert Law is quite profound and I am honored sir to have engaged in debating/discussing this controversy with you. In fact what you have illuminated in your comment is the very essence of my posit regarding the Fabians model of: (1) an elite-moneyed class, (2) over a technocracy state with (3) "hewers of wood and carriers of water" as the serf-like dependents.
Warmest regards, Mr. Robert Law.
Thank you for your kind comment. I think we're both on the same side here.
This is a link to a conversation I had with ChatGPT you will find worthy of your valuable time to peruse:
https://chatgpt.com/share/67ec0330-57d4-8003-9009-d060a9fb83fb
I'll take what ChatGPT says about Keynes and Keynesianism, and Fabian Socialism more generally, as a vindication of my views on the subject.
Obviously, that's quite encouraging for me.
In simplest terms, under democracy, in order to get elected political parties make promises to their electorates which invariably involve them spending more than they can rake in from taxation, welfarism being the obvious example (pensions, healthcare, unemployment benefit, sickness benefit &c &c).
This inevitably leads to indebtedness. If a government isn't going to default outright, it can suppress the real value of the debt by devaluing the currency through inflating the supply, and effectively confiscate wealth from its citizens (as Keynes said), to pay it down (to some extent at least). They then try to convince their electorates that inflation is some kind of force of nature, or blame it on the Russians, or whatever the excuse of the day is. The other trick is to come up with completely bogus measurements of price inflation, which always hugely understate the reality, especially when it's advancing towards the peaks. (See truflation.com)
This was true even during the era of the various gold standards, but now with nothing providing an unbiased reference anchor, and basically all governments resorting to the same trick, the result is that essentially all governments are in a debt trap.
Alasdair has made these points on numerous occasions.
What I'd add is that to mitigate the effects of their indebtedness, governments, through their "independent" central banks, use interest rate suppression, leading to "stimulus" through availability of cheap "money", which through history has lead to malinvestments and asset bubbles.
Edward Chancellor's book The Price of Time is a good account of this.
This creates a huge irony which is that socialistic policies like Keynesianism and related welfarism actually increase wealth inequality, which is the direct opposite of the intended effect.
So let's put that to one side and deal with the subsequent conversation.
It's *very* interesting that, without you explicitly bringing up the topic, the ChatGPT response goes on to mention monetisation of energy (entropy), decentralised finance (DeFi), and digital currency (Bitcoin & stablecoins).
And while, as you say, the Trump team is packed with (hyper-)Keynesians, the fact that these things are being discussed at the highest levels is probably indicative that they know the present model is running out of road, and that when the crash comes ("inevitable debt implosion") it's going to be very nasty indeed.
It was a surprise to me that the responses went so far into the political dimension, and lurking in the background to a lot of the discussion is the figure of Elon Musk.
You might know this, but Musk's grandfather was deeply involved in the Technocracy movement, which emerged in the US directly after the First World War. One of their aims was total technocratic government, with a currency operating on a universal basic income (UBI) basis and based on energy consumption (like carbon credits). One of the other ideas coming out of this movement was the Technate, a physical realm of the technocracy encompassing all of North America and extending south as far as Venezuela (where the oil is). It's surely no accident that Trump's recent statements on Canada and Greenland derive directly from these ideas.
See: https://newsinteractives.cbc.ca/longform/technocracy-incorporated-elon-musk/
One interesting additional factoid is that the German rocket scientist Wernher von Braun whom the Americans captured to kickstart their rocket program wrote a science fiction novel The Mars Project where the Martian government leader is named as the "Elon".
So the tokenisation of energy idea goes a long way back, and while the technology didn't exist to make it a reality in the 20's and 30's, it does now.
Gold, after all, can be seen in this way, since you have to expend energy to get it out of the ground, but if everyone could just dig it up out of their garden, it would have no value.
Arguably, Bitcoin is the same, being based on a proof-of-work (i.e. energy) algorithm. Also, Bitcoin's origins are still obscure, and while the Satoshi Nakamoto narrative can seem an attractive one, it has all the hallmarks of a Deep State operation.
Lastly, going back to the related stablecoin idea, I'm quite taken with the "Bitcoin-is-the-new-oil" argument (there's a Luke Gromen video on YouTube about this). The idea is that by making Bitcoin a reserve asset, buyers would first need to buy a dollar-backed stablecoin (probably Tether) and thereby sustain the demand for dollar assets and allow the US to continue to run twin deficits.
Incidentally, or maybe coincidentally, Tether is now one of the biggest holders of US Treasuries, exceeding those of many sovereign states.
You could possibly see that as a bridge to an ultimate energy-based currency token.
Interesting discussion, but then we live in interesting times...
Wow! A lot to unpick there! I'll post a response when I've had time to think things through a bit further.
I heard years ago that the Russians almost starved to death because no one was motivated to go pick potatoes. Seems communism doesn't provide enough incentive to work, as all outcomes are the same, no?
That is essentially what happened to the Pilgrims of Massachusetts: William Bradford, the governor of Plymouth Colony, played a crucial role in the transition from a communal land system to one based on private property rights. Initially, the colony operated under a communal system where all land and resources were held in common, and the fruits of labor were shared equally. This system, however, led to significant problems, including a lack of motivation to work and widespread discontent among the colonists.
By the spring of 1623, the colony was facing severe food shortages and was barely able to sustain itself. In response, Bradford and the other leaders decided to assign each family a parcel of land to work for their own benefit. This change had a dramatic positive effect:
Increased Productivity: The new system made all hands very industrious, leading to a significant increase in the amount of corn planted and harvested. Bradford noted that this change "had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been".
Reduced Conflict: The assignment of private land parcels reduced the confusion and discontent that had plagued the community under the communal system. It fostered a sense of ownership and responsibility, which in turn improved the overall morale and productivity of the colonists.
Sustainability: The shift to private property rights ensured that the colony could sustain itself and grow. The colonists no longer faced the starvation and food shortages that had characterized the first three years of the settlement.
This decision by Bradford and the other leaders is often cited as a pivotal moment in the history of the Plymouth Colony, demonstrating the practical benefits of private property rights in fostering economic prosperity and social stability.
AI-generated answer. Please verify critical facts.
You are exactly correct. English colonists tried it and it failed. As soon as they parceled out the land to individual families and let them take control, the people prospered. As someone said, "Those that don't know their history are doomed to repeat it."
Erroneous conclusion, Indians had been around a long time.
Corn indeed was the major contributor to the ultimate survival of the Pilgrims, but they didn't have corn until Squanto the Socialist gave them the seeds.
Incidentally, Squanto died in November 1622, while leading a trading expedition. So apparently their trying to make him a capitalist is what killed him.
Thanks, David, I needed to smile. :-)
J.M. Keynes ....' Fabian Socialist ' ....' Communist Sympathiser ' .....' Economic Fruit Cake ' - all of these + reputedly from various sources a sadist and pursuer of little boys as well . Decidedly not the sort of person you'd ordinarily ever want as a dinner guest .
Yes, it is my understanding John Maynard Keynes was a flaming homosexual.
He also was a mouthpiece of the Rothschilds (as Marx was), who financed and promoted him and his absurd theory (parallel to Einstein). They are Satanists; do what you want, turn upside down, deny God and god-given money.
What has become obvious is they do not fear the Living God. The Creator of Heaven and Earth. The Supreme Ruler of the Universe.
Fingers crossed their date with destiny and having to answer for their centuries old malfeasance and evil doing will be answered by a one way
trip down below to the cauldron's of hell ...in the not too distant future .
Right Over the Target ..!!
Romans 1
Er, no. Keynes was not a Socialist.
He was a Liberal in the Asquith mould, campaigned for the Liberals in elections, and even stood for Parliament as a Liberal candidate, albeit in a seat he knew he wouldn't succeed in. Once ennobled, he sat on the Liberal Party benches in the House of Lords.
What became known as Keynesianism, which is the deliberate expansion of credit to stimulate the economy, was a specific policy for a specific time. In particular, it was needed in the 1930's following the massive disruptions in the financial system resulting from the Great War, and especially because Churchill had put the sterling back on the gold standard at the pre-war level, which was totally ruinous for UK manufacturing, a position from which it has never recovered.
The result was mass unemployment and destruction of productive capacity.
The stimulus measure was to stave off a Socialist or Communist revolution, not to encourage one.
Even in his own lifetime, he asserted that he wouldn't ever describe himself as a Keynesian.
He also famously said that if circumstances change, he would change his opinion accordingly, which is hardly the position of a dogmatist.
Unfortunately, Keynesianism has lived on as a Socialistic policy, but you can't really blame Keynes for that.
As for brother Geoffrey, I wouldn't necessarily trust what he says, particularly on the basis of a comment taken out of context. It was Geoffrey who was married into the Darwin clan, so was much closer to the eugenicists and Fabians in outlook than Maynard.
Rubbish: John Maynard Keynes, an influential economist, was indeed a member of the British Fabian Society and was deeply influenced by Fabian socialist ideas. Fabian Socialism, founded in London in 1883, aimed to achieve socialism through gradual and incremental reforms rather than through violent revolution.
Keynes's association with the Fabian Society began early in his career. He was introduced to Fabian socialist ideas through his connections with G. Lowes Dickinson, Leonard Woolf, and G.E. Moore at Cambridge University. His close friendships with prominent Fabians like Sidney Webb, Beatrice Webb, and George Bernard Shaw further solidified his ties to the movement.
“By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some….The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose.”*** John Maynard Keynes ~ 1920
For those with a penchant for central banks and socialism, this is an excellent five minute read: https://mises.org/wire/central-banks-and-socialism-are-forever-linked-together
Keynes was not a Fabian. He was certainly a member of the same social set as the Fabians you mention, but that doesn't mean he shared their ideas.
There is no evidence he ever advocated the replacement of capitalism by Socialism, gradually or otherwise.
His often quoted remark on inflation can't be taken as his being an advocate of inflationism, other than as a specific policy for a specific time, rather that he understood its consequences for the general population.
I don't think you have watched the video...
Alasdair, this is a link to a conversation I had with ChatGPT you will find worthy of your valuable time to peruse:
https://chatgpt.com/share/67ec0330-57d4-8003-9009-d060a9fb83fb
The Neoclassical–Keynesian Synthesis
The neoclassical–Keynesian synthesis or neoclassical synthesis (NCS), is an academic movement and paradigm in economics that worked towards attempting to reconciling the macroeconomic thought of John Maynard Keynes in his book The General Theory of Employment, Interest and Money (1936) with neoclassical economics.
The synthesis is a macroeconomic theory that emerged in the mid-20th century, combining (synthesizing) the ideas of neoclassical economics with Keynesian economics. The synthesis was an attempt to reconcile the apparent differences between the two schools of thought and create a more comprehensive theory of macroeconomics. It was formulated most notably by John Hicks (1937), Franco Modigliani (1944), and Paul Samuelson (1948), who dominated economics in the post-war period and formed the mainstream of macroeconomic thought in the 1950s, 60s, and 70s.
The Keynesian school of economics had gained widespread acceptance during the Great Depression, as governments used deficit spending and monetary policy to stimulate economic activity and reduce unemployment. However, neoclassical economists argued that Keynesian policies could lead to inflation and other economic problems. They believed that markets would eventually adjust to restore equilibrium, and that government intervention could disrupt this process.
In the 1950s and 1960s, economists like Paul Samuelson and Robert Solow developed the neoclassical synthesis, which attempted to reconcile these two schools of thought. The neoclassical synthesis emphasized the role of market forces in the economy, while also acknowledging the need for government intervention in certain circumstances. According to the neoclassical synthesis, the economy operates according to the principles of neoclassical economics in the long run, but in the short run, Keynesian policies can be effective in stimulating economic growth and reducing unemployment. The synthesis also emphasized the importance of monetary policy in controlling inflation and maintaining economic stability. Overall, the neoclassical synthesis was a significant development in the field of macroeconomics, as it brought together two previously competing schools of thought and created a more comprehensive theory of the economy.
However, a series of developments occurred that shook the neoclassical synthesis in the 1970s as the advent of stagflation and the work of monetarists like Milton Friedman cast doubt on the synthesis' conceptions of monetary theory. The conditions of the period proved the impossibility of maintaining sustainable growth and low level of inflation via the measures in the Keynes General Theory of deficit government spending and socialist central government planning.
See latest reply.
You are a victim of Orwell's Ministry of Truth.
Have you read any of the Keynes biographies? I have.
Or 1984?
You might actually learn something if you did.
The Ministry of Truth was engaged in rewriting history to suit the purposes of the Party.
Nowadays it's the internet where truth gets rewritten, which leads to people like you spouting random stuff you found on the internet just because it suits your views.
If anyone's a Minitrue victim, it's you.
Mr. Law, why is it that your ilk always reacts with an ad hominem attack when you are cornered intellectually? Of course Orwell's Ministry of Truth engaged in rewriting history. An example of rewriting history are the Keynes biographies you refer to.
That said Mr. Law, here is a Google Docs link to my research into the socioeconomic transition of THE THIRD WAVE. It is a work in progress and my response to your statement: "If anyone's a Minitrue victim, it's you."
https://docs.google.com/document/d/1KOsd36mpOGRFpgrLsmNn0KNo7QwdIwgz9EZiQqVNkJ8/edit?usp=sharing
It was you who started the personal attack.
I simply responded in kind.
Ronald Reagan and Margaret Thatcher's Ministry of Truth.
Now we have BoJo the Clown, Kier Starmer (Kier Stormer 008 is the moniker Alex Christoforo gave him.) and Donald Trump -- he even calls it "Truth Social". You can't make this stuff up.
Bolshevism is cancer. Bolshevism is Jewish. If you have not read any of Solzhenitsyn work, well he has been issuing warnings for years. Or you could look outside your door. It’s right there. We are swimming in this sewage. The aim is to rot everything. To destroy Amelek. They kindly spell it all out for you…if you listen. Then ponder - supposing Freud was making it all up. Fuck these people are cancer. “We got the wrong guy”. General Patton
Thank you Alasdair.
“By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some….The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose.”*** John Maynard Keynes ~ 1920
That was a really interesting and informative lecture and certainly filled in a few gaps for me.
Key take away: "IS-LM was invented by Keynes in 1933 to justify socialism".
Thanks for sharing Alasdair.
Thank you Alasdair. That was a very enlightening presentation. The sad state of affairs is that we have reached the point where the finger pointing on whose theory has caused the financial problems is more important than fixing the problem. I sense that auditing the US gold reserves has “died on the vine” so to speak and that gold/silver/commodities will only continue to march ahead as priced in fiat currencies until reality hits all insolvent countries populations. What a world-wide mess.
Jimmy Carter tried to get us off the Keynesian Economics slippery slope, but then Ronald Reagan put us back onto the Primrose Path to where we are now.
The "government CONTROL of production" which Edward Fuller points out as a key component of his definition of "socialism" exemplifies that Reaganomics was the jumping off point into our long, slow burn. First Military Industrial, now Agricultural Industrial, Educational Industrial, Pharmaceutical Industrial and Healthcare Industrial Complexes.
We're so far Through the Looking Glass that we now have Ukraine -- the most nationalist socialist Rump State in the history of civilization.
However, Edward Fuller is absurd when he says at the end that we're still on the Fractional Reserve System. Creeping socialism went hand in hand with the detachment from Fractional Reserve over these past 40 years. Reaganomics also made the initial move to where the limit went from 10 to 1, to 15 to 1, for how many times The Banksters were allowed to lend out their reserve capital. It was, incidentally, August of 2019 when Trump made the ratio Infinity to 1.
In so far that politics is about directing how the earthly assets should best to used for the benefit of the human race as a whole, I strongly believe that the best is maintaining the balance act between the selfish and the common. The right and the left are both only looking to steer the society in favour of their own selfishness while projecting the bad and evil on the others.
Then, of course, politics should be about much more, because the distribution of the material is only a part of what is beneficial to humans both as indivduals and as a society as a whole. But that is conveniently most often overlooked by the materialists.
Thanks Alasdair for bringing our attention to this great expose of the history of macroeconomics and that the IS LM model was written to justify socialism Lucas' DSGE was just an expression of Keynes' IS LM And so Keynes General Theory was responsible for 2008 and will be responsible for this disastrous bubble and its impending burst von Mises' truth will eventually win out but will take time
Can there be a balance between socialism and capitalism where egalitarian policies can be married to protections of government to fend off crooks, frauds, cronyism, and greedy corporatists and what would that look like in economic policy?
The optimal position is no socialism. But it is a political decision.
The short answer is "no". The problem is the human heart - it is corrupt and deceitful. Therefore any institution or endeavour undertaken by humans will be fraught with problems and suceptible to corruption. (Sorry about my spelling) Fix the human heart and you fix a lot of things.