Why Do Progressives Lionize Keynes? - Part II
Whether they honor his ideas or are just using his name to support a big government command and control agenda; progressive liberals are either openly radical, or blissfully ignorant regarding their allegiance to their economic spiritual leader, John Maynard Keynes.
Who is this man that defines the intellectual base of progressive economic philosophy? In the first of a two part series we showed Keynes the radical. In part two, we will unmask Keynes as someone who supported classical free market principles and detail how his philosophies do not align with the agenda of those who wish to use his name.
John Maynard Keynes was an intellectually inconsistent man who played loose with economic principles. For example, Keynes said, "the political problem of mankind is to combine three things: economic efficiency, social justice and individual liberty." -Essays in Persuasion, 1931. Although this sounds like lofty rhetoric, forcing social justice comes at the cost of economic liberty and efficiency. Here Keynes speaks an invalid ideal masquerading as a possibility.
Eloquent, and at times aligned with a radical progressive movement, his stature has been exploited by those who want to solidify economic power in the central government. Unfortunately many Keynesian ideas are in direct contrast with those who elevate him to economic sainthood.
Keynesian, or demand side economics came to being in the early 1900s. The basic premise is that if the government spends more money, then more money will be in circulation. In turn people will spend more money by demanding more goods and services and stimulate the economy as a result. Keynes did promote the use of government policies and intervention in the economy when necessary; but unlike today's Keynesians, he advocated government spending and tax breaks to stimulate the economy, and spending cuts and tax hikes to cool off the economy.
Keynes looked to use fiscal policy to fine tune the economy with one major difference between today's big government progressives. He advocated government spending that came from government savings (running surpluses during boom times,) not government spending by borrowing from others.
"To dig holes in the ground", paid for out of savings, will increase, not only employment, but the real national dividend of useful goods and services. It is not reasonable, however, that a sensible community should be content to remain dependent on such fortuitous and often wasteful mitigations when once we understand the influences upon which effective demand depends. -The General Theory of Employment, Interest, and money, 1935.
In addition, he believed in cutting taxes in recessionary times to stimulate economic activity and raising taxes during times of prosperity. This is contrary to the modern liberal philosophy of raising taxes and spending ad infinitum.
"The boom, not the slump, is the right time for austerity at the Treasury." -Collected Writings, 1937.
In fact, the fiscal policy necessary during tough economic times articulated by Keynes has been ignored by today's progressives who disingenuously cite him or flat out lie as to what Keynes promoted.
On fixing unemployment Keynes detailed:
"Look after unemployment and the Budget will look after itself." - Collected Writings of John Maynard Keynes, 1933.
Keynes was clear on his views of the free market.
"The engine which drives enterprise is not thrift, but profit" -A Treatise on Money, 1930.
And admitted Smith's classical economic principles were correct.
"I find myself more and more relying for a solution of our problems on the invisible hand which I tried to eject from economic thinking twenty years ago."- Keynes to Henry Clay, over lunch at the Bank of England; April 11, 1946.
He even acknowledged the inefficiencies of a command economy and man's limited capacity to control markets.
"But to-day we have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand. The result is that our possibilities of wealth may run to waste for a time - perhaps for a long time." - Essays in Persuasion, 1930.
So who is John Maynard Keynes? His inconsistent philosophies bespoke a man who wore many hats: confused intellectual, radical, capitalist? Some might regard Keynes as being more interested in elevating himself as a visionary than actually having a visionary philosophy.
Whichever the case, if Keynes is the darling of the progressive left, they ought to have the guts and intellectual integrity to accurately portray the man they are canonizing and actually align their actions to his words.