Use access key #2 to skip to page content.

Money Part VI: Understanding Keynes, from Marx to Krugman

Recs

26

March 30, 2009 – Comments (36)

I have wavered back and forth quite a bit over how to continue this series. Up to this point I have focused solely on monetary theory, discussing the history of money and the consequences of paper money. I have shown how inflation is not some mystical result of wayward capitalism, but rather a traditional policy of corrupt governments (hint: all of them) since the dawn of recorded history. Finally, in an effort of fairness, the arguments for unbacked paper money were presented and I spent an entire post arguing that deflation is not only a result of unwelcome government interference, but a refreshing liberation from the tyranny of Keynesianism. But where do I go from here? Well, rather than going where many others have boldly gone before, I'd rather let them do the talking. Links will be provided after my musings on Keynes.  I apologize in advance for rambling, but I've been pressed for time lately.

What is Keynesianism? 

One of the greatest tricks the devil ever pulled was convincing you that he was an angel. Keynes is such a devil, as our his modern day adherents. To truly understand that statement, take a moment to consider the first reaction of the government, experts, media, and economists to our current fiasco. It's the free market's fault!  And just like that, the debate was snuffed out and an army of charlatans offered solutions. More regulation, more government intervention, more paper money!  Let's not revisit that delusional path once again, but it is important to evaluate the premise.

Keynes passed off his theory as moderated capitalism.  Free markets are bad, but markets in general, are necessary. Therefore, they are a necessary evil that must be watched closely by the State.  Now, where have we heard such statements before? 

So what's my problem with Keynes? Do I have some psychological obsession with free markets and an anarchical disposition to oppose government in all forms? Maybe, but probably not, since in my younger days I was a steadfast defender of the State. Here's Keynes in his own words:

Nevertheless the theory of output as a whole, which is what the following book purports to provide, is more easily adapted to the conditions of a totalitarian state, than is the theory of the production and distribution of a given output under conditions of free competition and a large measure of laissez-faire. - John Maynard Keynes (emphasis mine)

That comes from the forward to the German edition of General Theory, his masterpieceKeynes understood that his ideas would not only lead to a totalitarian state, but that such a state was essential to his system.

So stop scratching your head, wondering how in the heck Geithner, Bernanke, and their Keynesian cheerleaders like Krugman can continue to argue for government intervention that is contradictory to liberty and American traditions. Let's see what else Keynes has to offer on the subject:

The Infamous Chapter 24 - Concluding Notes on the Social Philosophy towards which the General Theory might lead

http://www.marxfaq.org/reference/subject/economics/keynes/general-theory/ch24.htm

If the State is able to determine the aggregate amount of resources devoted to augmenting the instruments and the basic rate of reward to those who own them, it will have accomplished all that is necessary. Moreover, the necessary measures of socialisation can be introduced gradually and without a break in the general traditions of society.

Whilst, therefore, the enlargement of the functions of government, involved in the task of adjusting to one another the propensity to consume and the inducement to invest, would seem to a nineteenth-century publicist or to a contemporary American financier to be a terrific encroachment on individualism. I defend it, on the contrary, both as the only practicable means of avoiding the destruction of existing economic forms in their entirety and as the condition of the successful functioning of individual initiative.

It's a not-so-dirty little secret that Keynes had a fondness for the economic policies of the Nazi Socialist Party. In fact, while the American Left rejected Nazi social policies, rightfully so, they have continued to embrace the folly of Nazi economics, particularly the glorious ideal of full employment.

Make no mistake about it. These lunatics have shaped our current economic system for the last seventy years. So why do they keep blaming all of our problems on free markets? The only alternative would be to tell the truth. America is not a capitalist country. It's a mixed economy, where the government, using Keynesian theory, involves itslef at every opportunity and has done so for decades.

So from where do Keynes' ideas originate:

Abolition of Private Property - As I've already documented, not only is private property held to be inviolabe on Christian ethical grounds, but our current monetary system is indeed a violation of private property.

Heavy Progressive or Gradual Income Tax - Strongly supported by Keynes on the false notion that it stimulates employment.  See Chapter 24.

Centralization of Credit in the hands of the State - Keynes' believed that free market credit was exorbitant, and thus it was up to the State to lower interest rates whenever possible. The Austrian Theory of the Business Cycle explains how this policy is responsible for the boom and bust we are living through.

Equal liability of all to labor - We call this the national debt. As Keynesian economist Abba Lerner once quipped: "We owe it to ourselves."

Where have you heard these ideas before?

A note on the Federal Reserve

Cute play on words there, but seriously, there are some tremendous misconceptions about the Federal Reserve that seem to befuddle even the sharpest minds.

The Federal Reserve is not a bank. A bank handles money. It exchanges money, holds money, loans money, etc.. In other words, a bank deals with money.  The Federal Reserve is a money producer. It creates money.  It is simply the modern form of the mint.  Instead of minting coins, it mints paper, which is tremendously cheaper.  It's a business with a legal monopoly privilege.

It's also not Federal, in that it is a private for-profit business entity (wouldn't you like to buy shares in this company!?) But it has an ad hoc relationship with the government, each using the other to further its own interests when necessary, both certain to suffer a loss power from a collapse of the other. And both rather treasonous to the Constitution and the American People. I would surmise that most central bankers and politicians will eventually by lynched by armed mobs but it might take a few trillion more in theft.

The Silence of Socialists

Funny isn't it? The same yahoos that rail against monopoly wholeheartedly support a legalized monopoly when it serves their interest. I was told by my Socialist friends that monopolies are a product of the free market. Well, for the economically illiterate, the difference between a free market monopoly and a legal monopoly is barrier to entry. In the free market, the aspiring entrepreneur is not legally barred from entering into competition with the current monopoly. In other words, he/she can take their chances. Maybe they'll get slaughtered. Maybe they won't.  No one, however, may enter into the minting business today. That's the opposite of Capitalism. That's totalitarianism. Why don't the Socialists oppose this monopoly privilege? Oh yeah, because it makes the Welfare State possible. So much for principles.

The Silence of Christians

Here's one I really don't get. Maybe it's because they're caught up in neo-con driven messianic conquests overseas, but I just don't understand why Christians can sit idly by while America sweeps toward tyranny.  I've only skimmed the surface of Christian theology that stands in direct opposition to Keynes and Central Banking.  What happened to the Church?  I realize that the "butts in the pews" business mentality of some churches may lead to an appeal to populism at the expense of orthodoxy, but that doesn't explain the absence of Christian leaders from mainstream economic debate. Have they been silenced or are they simply silent? I don't have the answer for this. But make no mistake, Christian theologians have long been exemplary scholars on monetary policy and classical economics.  In fact, here is an area that Christians and rational Atheists (rational in the Objectivist sense, not as a back-handed compliment) have a great deal of common ground.  Maybe that's why the State often pits them against each other. Divide and conquer, friends.

Calculation Problems

As has been pointed out before, Socialism has a big problem. If all assets and resources are controlled by the State, prices are no longer determined by aggregate processes. This is called Capital Theory. Keynes, like Marx, rejects Capital Theory on the grounds that prices appear to be random since there is so much subjectivity in price decisions. This rejection is also the justification for every price control and trade restriction in recorded history.  I'll assume that you'll read further on this subject if you are interested and go straight to the conclusions for now. I'm rambling and running out of space. Without a pricing mechanism there is no way to determine how resources should be distributed. The end result is a monstrous State bureaucracy with everything at its disposal and no clue how to dispose of it (see: Geithner).  The rejection of Capital Theory becomes more evident with every misguided bailout and government program.  It's the destruction of the market economy and a step towards chaos and tyranny.

The All Powerful Shareholder

Another fallacy of modern Keynesian philosophy that dates back to Marx is that the shareholder in a joint stock company directs operations. It is true that some modern corporations, in fact, hold shareholder opiinion as more important than other business matters. However, efficient companies, do not. The company run by the entrepreneur acts in the interest of the consumer, because in the end it is the consumer's decision to purchase his/her products and services that determines the profitability of the operation (unless you're an automaker or an insurance giant). The general shareholder's responsibility is to ascertain the results of these efforts to determine whether or not the company is worth investment.

But alas, the power of debt!  In a paper money world, easy credit means that larger operations cease to be run by independent entrepreneurs, which is exactly the outcome that Marx had hoped for. A business manager with a 1% stake and 99% debt is no longer the steward of his/her own fortunes, soley. Instead, he/she becomes a manager of other people's money. He becomes a bureaucrat, answering to bankers and shareholders that have capitalized his operations. This is how the market economy gets transformed into something that resembles kleptocracy.

Conclusions

I regret having to heap so much information in such a small space, but unless a book deal is forthcoming I don't have the resources available to paint a comprehensive picture.  Besides, many others have already presented tremendous cases for economic liberty.  I am only trying to bring my own style to the intellectual debate.  The answer is of course, freedom.  Freedom to mint your own money. There is no reason, ethical or practical, to prevent aspiring entrepreneurs from producing their own money to be used in a dynamic economy. The gold-exchange standard, sadly, is flawed, though not as horribly flawed as a paper standard. It's flawed by fiat law and monopoly privilege.  In my final essay, I will present the system by which a free market money supply would operate. I'll get into the details, moving from the theoretical to the practical. It is not simply be a fancy idea, rather it will be shown to be a practical and ethical solution.

Links:

Inflation and You

Deflation and Liberty

The Importance of Capital Theory

The Case Against The Fed

Money Creation In a Fractional Reserve Banking System

Austrian Theory of the Business Cycle

The Calculation Problem

The Calculation Problem Revisited

Hangover Theory

Four Thousand Years of Price Controls

David in Qatar

36 Comments – Post Your Own

#1) On March 30, 2009 at 2:15 PM, motleyanimal (87.97) wrote:

I've come to look at the free market as I do fire. It is a wonderful thing, so long as you can control it.

Report this comment
#2) On March 30, 2009 at 2:41 PM, whereaminow (21.66) wrote:

motleyanimal,

I understand your position, but unless you are 100 years old it is doubtful that you've actually been exposed to the free market. A free market and a monopoly money producer are incompatible. We've lived in a distorted market.

For analogy, it's like being afraid of your electric stove simply because you think it's a fire stove. You've never seen an actual fire stove, but you've been told all your life that your electric stove is indeed a fire stove. That's called agnosticism of meaning, and it is a familiar trick of the State.

David in Qatar

Report this comment
#3) On March 30, 2009 at 3:21 PM, GNUBEE (25.95) wrote:

Whereaminow,

First off, thank you for intelligently exhibiting that you have both a functioning brain, and an agreable disposition.

None of us have seen a purely free market system (except when I was a child I had a lemonade stand) Nor should we.

This is because a market that works soley in its own interest, leaves out those who cannot afford market participation. If you do not care about those who cannot participate, then free markets can work for you. If however you cannot participate it is in your personal interest to support a system that "works" for you. Free market participation could then be argued as "non-Christian" because it is purely a selfish and uncharitable system. Selfishness is agreeably a Non-Chrsitian trait.

Example- Fire Departments. I am sure that a for profit Dept can be found, but many companies will never prove to be self supporting financial ventures. Or the Ocean search for the three boaters off of Florida recently. How much did that cost in dollars? Are Dollars more important than life? What if in the free market system you were in a situation that warranted "help" but could not afford to pay for three choppers, and two cutters?

These examples show the need for some intervention by big brother. Some intervention requires existence. So based on that argument You can not have a completely free (of government) market.

It is the degree of intervention that needs to be checked. Not necessarily it's validity. Rather than free markets- Transparent markets would be more ideal. Transparent markets would also be more in agreement with Christian beliefs as well. With transparency all would have knowledge equality, and only publicly known and supported deception could survive. It would remove cheats by exposing them.

Report this comment
#4) On March 30, 2009 at 3:45 PM, whereaminow (21.66) wrote:

GNUBEE,

Thanks for your comments. I would like to address them. The first example concerns fire departments. I have argued before that fire departments could use a little deregulation. I think firefighters are some of the bravest/craziest people on Earth. I have some friends on the fire department of a large metropolitan center. They work only 8 days per month and most of that time is sitting around the fire house goofing off. They may work two hours, of real work, per month!  They get a clothing allowance even though their uniforms are provided for free. Their pension is tax free. They get a bonus for leaving their cell phone on all day once per month! How sweet is that?!

Still, I don't begrudge them what they get. Fighting fires is the most insane occupation a person could ever chose. Nonetheless, I have the sneaking suspicion that different business models of firefighting could be introduced that would be far more efficient (like say... smaller trucks for smaller communities, denser communities... or 10 day work months as opposed to 8) than the standard one-size-fits-all model that currently operates across America. The resources saved could be used in more efficient manners. 

The idea that poor people could not have access to fire fighting services in a free market does not fit with the real world. What markets have not reached poor people? Remember the saying, "Sell to the classes, live like the masses. Sell to the masses, live like the classes."  The reality is that entrepreneurs that reach the most people (the majority), reach the greatest wealth. Every entrepreneur knows that. So why would entrepreneurs be disinterested in provided firefighting services to poorer communities?  That's exactly where the greatest profit would be.

As for search and rescue operations, you are correct to determine them as costly, but that does not inherently make the government's efforts ethically or practically superior. What did people do before daddy government got involved in disaster rescue operations? They got the job done on their own. I'm sure I could find thousands of examples of people banding together to rescue those in need without government assistance. The reason this is ethically superior, however, is two fold. First, it does not entail a violation of property rights that is a violation of Christian doctrine. Second, government assistance (in all matters) always leads to a decline in personal responsibility among those who become dependent upon it.

Finally, I welcomed the transparency promoted by the Obama administration, however I have yet to see any significant results. When pressed, by both Democrat and Republican lawmakers, the Federal Reserve has steadfastly refused any efforts of transparency. Until Obama supports an audit of the Fed I am inclined to think this is just another cute campaign promise.

David in Qatar

Report this comment
#5) On March 30, 2009 at 4:08 PM, GNUBEE (25.95) wrote:

David,

Markets reaching the poor though the (ab)use of credit do not apply, so many examples would/should not apply. Trying to determine what the poor have due to credit is a futile effort, so I'll have to give you only theory, sorry.

Sell to the masses, is great. When the masses are buying. Who would pay upfront for fire protection if not required to? Many do not even pay for Car insurance, why would they pay for something they don't think they will need? And upfront insurance type plans would be the only way it would work. Imagine trying to get someone who did not have a fire all year to pay last years fees. Some things need nanny participation.

People do band together in extraordinary circumstances, yes I agree. But when those circumstances become ordinary, no one cares. So you need a mechanism to provide service when people become jaded to emergencies.

Not to delve into religion, but property "rights" do not apply to a true Christian. If giving up those property rights supports your community you are obliged to hand them over. Ulimately property has zero true value, so worrying who owns it is moot, in as much as a person truely owns nothing.

I too sadly agree that the promised transparency is just that...a promise. But true, honest and complete transparency should be aspired to.

Thanks for the debate

Report this comment
#6) On March 30, 2009 at 4:16 PM, whereaminow (21.66) wrote:

Thanks GNUBEE,

I will set aside the rest of the debate, but allow me to request that you investigate the Christian stance on Property Rights further. I detailed it briefly in this post and I only skimmed the surface. There is tremendous theological support for the invoialibility for private property, regardless of its use, among all variations of Christianity.

David in Qatar

Report this comment
#7) On March 30, 2009 at 4:20 PM, whereaminow (21.66) wrote:

Inviolability

I just had to spell that word correctly one time.

Report this comment
#8) On March 30, 2009 at 4:25 PM, motleyanimal (87.97) wrote:

I may have seen a free market at work. Do you get the "Sopranos" in Qatar?

Report this comment
#9) On March 30, 2009 at 4:41 PM, Rehydrogenated (32.14) wrote:

David, I've read almost all your blogs in this series and plan on reading the rest very soon. They were amazingly informative and interesting. Thank you for your contributions, your one of the people that makes CAPS great.

I would like some clarifications though. How does your theory deal with monopolies and oligopolies? Most arguments I've had about the privitization of government departments/programs resulted in some form of "the few companies that take control of the department will raise prices and lower utilization". I don't believe that is true, or if it is true, then resources will be used more efficiently, which is good for everyone. But i have no concrete argument or theory to back me up. How will monopolies and oligopolies not take over the markets or make unconscionably high profits? 

Report this comment
#10) On March 30, 2009 at 4:46 PM, GNUBEE (25.95) wrote:

Property rights being inviolible is a cornerstone to societies, not Christianity.  I understand the reasoning, but disagree. that no man should steal from another, but in a utopia no one would. Christianity is a religion of humilty and submission. Those that do not agree to those requirements I believe are not truely Christians. Popes, Fryars, priests included.

I still do not understand how pure hulity and submission can be lived. But I understand while property rights may make a society work, they are not in any way a requirement of Christianity. And therefore their violation cannot be deemed un-Christian. (no matter what any cleric may say) Just my 2c grasp on Christianity (yes I am a Chrsitian)

Report this comment
#11) On March 30, 2009 at 5:04 PM, GNUBEE (25.95) wrote:

I understand the reasoning, but disagree. I also understand that no man should steal from another....

Sorry, don't know what I was thinking.

And yes, it's contageous. replace the I with an "A" in inviolable.

Report this comment
#12) On March 30, 2009 at 5:16 PM, binve (< 20) wrote:

whereaminow, Very well put together and thought out post. I do appreciate how thorough your posts are. I don't always agree with all of your positions but I find I tend to agree with many of them.

I particularly agree with your view on the Federal Reserve:

The Federal Reserve is not a bank. A bank handles money. It exchanges money, holds money, loans money, etc.. In other words, a bank deals with money.  The Federal Reserve is a money producer. It creates money.  It is simply the modern form of the mint.  Instead of minting coins, it mints paper, which is tremendously cheaper.  It's a business with a legal monopoly privilege.

Absolutely perfect description.

The links are also all extremely useful. Thanks for the post!

Report this comment
#13) On March 30, 2009 at 5:35 PM, whereaminow (21.66) wrote:

motleyanimal,

I'll play along =D. I have Showtime out here, so no Sopranos for me, but I can watch it online through Pirate Bay (don't tell the Feds!).

Rehydrogentaed,

Thanks! Historically, monopolies and cartles have only existed with the assistance, direct or indirect, of the State. I would suggest picking up "Antitrust and Monopoly: Anatomy of a Policy Failure" by Professor Dominick Armentano. Of course, the very existence of the State makes privatization problematic. I've read a little on the Czech model, where the complete overthrow of the Communist State allowed for a modestly progressive privatization, although I haven't seen anyone put that model under a great deal of scrutiny. Can't make an educated judgement on it.

GNUBEE,

Great discussion. It's always difficult to debate religion since its a personal experience, and that makes its meaning vary from one person to the next. I just wanted to share some historical perspective for the sake of argument.

binve,

I am happy to share with you. Thanks for the props and I'm glad we don't have to agree on everything to find common ground on important issues.

David in Qatar

Report this comment
#14) On March 30, 2009 at 8:34 PM, UltraContrarian (31.14) wrote:

"No one, however, may enter into the minting business today."

http://en.wikipedia.org/wiki/Local_currency

Report this comment
#15) On March 30, 2009 at 8:46 PM, whereaminow (21.66) wrote:

Great link, UC!

I'm going to have to do more research on the Worgl experiment. It's really interesting. This description was humorous:

Unemployment was eliminated, while it remained very high throughout the rest of the country. No increase in prices was observed. Based on the dramatic success of the Wörgl experiment, several other communities introduced similar scrips.

In spite of the tangible benefits of the program, it met with stiff opposition from the regional socialist party and from the Austrian central bank, which opposed the local currency as an infringement on its powers over the currency. As a result the program was suspended, unemployment rose and the local economy soon degenerated to the level of other communities in the country

Report this comment
#16) On March 30, 2009 at 9:05 PM, GNUBEE (25.95) wrote:

David,

Yeah religion is a sticky topic indeed. I will fully agree that debt is slavery, and no religion should be able to sleep at night if it endorses slavery. I will always value an opinion as long as it is backed by sources. You back up your positions and that earns respect. 

Sadly, today's compliant populus has very little wants, and almost no needs. Until the majority becomes unhappy they will not actively seek change. 

Report this comment
#17) On March 30, 2009 at 9:22 PM, TMFLomax (49.22) wrote:

Good post. I keep meaning to actually try to tackle reading Keynes, since I have for a long time felt that so many things we have been told are "free market" have actually been Keynesian and I need to actually read it instead of read ABOUT it, but you give a lot of good points. (I have read Hayek though and do recall his contention that monopolies most often come with assistance from the state, which yeah, many people don't really think about.) It bugs me when people try to say an apple is an orange though, and it happens a lot.

Also interesting: about shareholders only making the decision whether to invest or sell (and I know a lot of people feel that way). I actually do believe in shareholders at least having a say/voice in what companies do (I adore shareholder proposals, even the wacky ones), even if it's a non-binding, "you're on notice" type of thing, since I really do feel like a lot of companies have done an awful lot of stupid, short-term things that make no sense and I trust managements to do the right thing as little as I trust many people in power these days I guess. I guess a lot of this has roots in my own "people power" philosophy, although no, they can't "run" the business of course. Perhaps I have a freak Keynesian streak, then? ;) Ultimately though, I'd rather see shareholders make their opinions known and boards of directors do their jobs than have government have any say whatsoever... And some of the stuff that goes on does deserve outrage, which of course leads people to scream for the government...

David, have you read The Machinery of Freedom? I really enjoyed that book, although I have to say that the part about emergency services was one of the points where I got awfully squeamish and just couldn't quite "go there," ha.  (Was reminded by the fire department, haha.) Although I get your point that there are inefficiencies that don't get addressed the way things stand.

Sorry about the stream of consciousness. I enjoy your posts, always good food for thought. 

 

Report this comment
#18) On March 30, 2009 at 10:55 PM, whereaminow (21.66) wrote:

Alyce,

Concerning the shareholder discussion, I think its perfectly reasonable for a modern day investor to want more say over the company. It has become blatantly obvious that accounting can't be trusted and CEO's are suspect across the board. Some are good, sure, but more and more they seem like..... political entrepreneurs. That's a term I'm borrowing from Burton Folsom. A political entrepreneur is a business manager that can't cut it in a competitive market, instead they seek out assistance from the government.  So it's no surprise that a shareholder might look at today's CEOs and think 'hey, they need to listen to me.' 

There's less and less real entrepreneurs running American companies. Imagine if Andrew Mellon or Vanderbilt or Tom Watson had answered to shareholders rather than their customers. I think its safe to say that the traditional market entrepreneur doesn't give much thought to the whims of shareholders, especially the short term speculators that jump ship at the first sign of distress. Rewarding long term shareholders with years of dividends and growth on the other hand, is probably very rewarding for a true business manager.

Great call on the Friedman book, too. Another thing he and Rothbard have in common (and prob most anarcho-caps) is how ridiculous Statist arguments appear to them, and they make it very obvious that's how they feel in their writing. They can be just a tad condescending :) So it's not a book to convince the neighbor, that's for sure, but hilarious if you are already Libertarian.

David in Qatar

 

 

Report this comment
#19) On March 30, 2009 at 11:43 PM, imeasure (< 20) wrote:

David,

I am a Christian and am intrigued by your comments on the silence of Christians "I just don't understand why Christians can sit idly by while America sweeps toward tyranny.  I've only skimmed the surface of Christian theology that stands in direct opposition to Keynes and Central Banking."

I believe there is much truth in these statements.

Many Christians I know live with a bifurcated view of reality in which things are either “spiritual” or “worldly.” Desiring to be spiritual they gravitate toward those things (religious duties and the promulgation of ethics) while shunning what they perceive as more worldly pursuits (commerce and to some extent academics). The saddest thing about this bifurcation is that it is largely based on a misunderstanding.

God in Christ is both the creator and redeemer of this fallen world. And although it is not a perfect world, he expects his people to make it better. Many are simply preoccupied with those duties that they believe will qualify them (and others) for the next life. The motives are genuine, but the result is a people who are “so heavenly minded that they become no earthly good.” (Source of quote unknown).

The Bible displays throughout its text an economic system fundamentally based upon the individual ownership of property; with the caveat that God is the ultimate owner of all property and we are his stewards accountable for how we use it. Any system that invalidates these ownership rights is inherently unchristian and must be opposed by all people of good conscience but most certainly followers of Jesus.

The declaration of independence says it better than I can. “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men…”

Our founders held a Christian worldview that saw government’s role as securing the rights granted to us by God. While it is true that they meticulously avoided the establishment of a “state church” (to avoid the abuse of power inherent therein), most were not, as some historical revisionists say, deists. They actually believed God was at work in the world and saw divine providence in their endeavors.

Finally – I wish to rebut the posters who say that Christianity is incompatible with property rights. Nonsense. If Christ had intended to invalidate the notion of private property he had plenty of opportunity in the many parables he spoke that referred to the ownership (and stewardship) of property.

One of the greatest achievements of ethics and antidotes to poverty and human suffering is the protection of private property. At the risk of offending some readers. How are Bill Gates contributions to this world (in the remediation of suffering and betterment of mankind) any less noble than someone like Mother Theresa? Granted that Bill hasn’t lived in poverty, but his work has allowed others (including Christian Missionaries) to save lives and advance the Gospel.

Keep posting I really enjoy your blog.

Brent in St. Charles

Report this comment
#20) On March 31, 2009 at 1:56 AM, whereaminow (21.66) wrote:

Brent,

The Bible displays throughout its text an economic system fundamentally based upon the individual ownership of property; with the caveat that God is the ultimate owner of all property and we are his stewards accountable for how we use it. Any system that invalidates these ownership rights is inherently unchristian and must be opposed by all people of good conscience but most certainly followers of Jesus.

Thank you. Thank you. Thank you. Now if only someone with this knowledge of the New Testament would be allowed to speak on the MSM.

David in Qatar

Report this comment
#21) On March 31, 2009 at 4:46 AM, DaretothREdux (40.05) wrote:

Thank you. Thank you. Thank you. Now if only someone with this knowledge of the New Testament would be allowed to speak on the MSM.

So it is written. So shall it be.

Amen.

Great post as always...I know it doesn't get old me saying that, but I feel like a broken record.

Report this comment
#22) On March 31, 2009 at 10:13 AM, GNUBEE (25.95) wrote:

Imeasure,

" I wish to rebut the posters who say that Christianity is incompatible with property rights. Nonsense"

I never said it is incompatible. I said it is not a requirement. Property ownership is however a cornerstone for a society, since a society needs agreed upon fundamentals.

 "The Bible displays throughout its text an economic system fundamentally based upon the individual ownership of property" That is true of economic systems, but not Christianity.

In your reference to the constitution "the pursuit of Happiness", needs to be interpreted with sound judgment. What if your happiness is in direct opposition to my happiness? Who's happiness will prevail? That is where an earthly government comes into play. Where "That to secure these rights, Governments are instituted among Men…” comes in. So I think we agree that there needs to be a Goverment. The goverment just needs to be adminstered by the people, which may/may not be the case today.  The apathetic who do not take an active role in governance deserve what ever form of government they get.- Again work to imporve your word-

I think using ownership and stewardship interchangeably is  confusing the argument. This is because by definition one contradicts the other. You cannot own something while someone else does also (then you would share or co-own). You can either be a steward, or owner- but not both. I fully agree that everyone is a steward, and that belief means no one can be an owner.

One of the greatest achievements of ethics (I Agree) and antidotes (Disagree) to poverty and human suffering is the protection of private property.

I fail to see how owning property is one of the greatest antidotes to poverty. I think you need to sheath your superlatives.

Being filled with a giving spirit is a far more substantial antidote to poverty and suffering. That giving spirit in pure form cares not for ownership of property.

Report this comment
#23) On March 31, 2009 at 10:31 AM, outoffocus (22.80) wrote:

The Silence of Christians

Here's one I really don't get. Maybe it's because they're caught up in neo-con driven messianic conquests overseas, but I just don't understand why Christians can sit idly by while America sweeps toward tyranny.  I've only skimmed the surface of Christian theology that stands in direct opposition to Keynes and Central Banking.  What happened to the Church?  I realize that the "butts in the pews" business mentality of some churches may lead to an appeal to populism at the expense of orthodoxy, but that doesn't explain the absence of Christian leaders from mainstream economic debate. Have they been silenced or are they simply silent? I don't have the answer for this. But make no mistake, Christian theologians have long been exemplary scholars on monetary policy and classical economics.  In fact, here is an area that Christians and rational Atheists (rational in the Objectivist sense, not as a back-handed compliment) have a great deal of common ground.  Maybe that's why the State often pits them against each other. Divide and conquer, friends.

David.

Dont get me started on the Silence of Christians.  The response to your question would require a separate blog in and of itself.  To put it briefly, the church has been silent because they are drinking the same Koolaid everyone else is.  Instead of listening to the Bible they are listening the idiot box and politically (and morally) corrupt church leaders (yea I said it).  I'll even go as far as to say that the church (and lack thereof) is one of the main reasons we are in this mess.

I'm going to leave it at that for now.

Report this comment
#24) On March 31, 2009 at 10:53 AM, outoffocus (22.80) wrote:

On the other hand Brent summed up some of my points quite nicely.

Report this comment
#25) On March 31, 2009 at 11:34 AM, SuzanneGilmour (< 20) wrote:

Following Lord Keynes’ alterations of natural economic laws, Western governments are all devoted today to the Keynes’ perversion of the law of supply and demand. The Keynes formula to make it all go right is “Create want.” If you follow that through, you will see that the Keynes’ utopia will wind up with the ultimate in “created want” which is of course starvation. So one is given the whole plan—to be economically sound, a population must be starved to death.  And if you look around today, you'll see Keynes's theories are being gleefully followed!  Taxes are rising, living costs are rising.  This squeeze is creating "want" on the part of the population as wages remain stagnant and, in some cases fall!

Report this comment
#26) On March 31, 2009 at 11:35 AM, SuzanneGilmour (< 20) wrote:

Following Lord Keynes’ alterations of natural economic laws, Western governments are all devoted today to the Keynes’ perversion of the law of supply and demand. The Keynes formula to make it all go right is “Create want.” If you follow that through, you will see that the Keynes’ utopia will wind up with the ultimate in “created want” which is of course starvation. So one is given the whole plan—to be economically sound, a population must be starved to death.  And if you look around today, you'll see Keynes's theories are being gleefully followed!  Taxes are rising, living costs are rising.  This squeeze is creating "want" on the part of the population as wages remain stagnant and, in some cases fall!

Report this comment
#27) On March 31, 2009 at 11:36 AM, SuzanneGilmour (< 20) wrote:

Following Lord Keynes’ alterations of natural economic laws, Western governments are all devoted today to the Keynes’ perversion of the law of supply and demand. The Keynes formula to make it all go right is “Create want.” If you follow that through, you will see that the Keynes’ utopia will wind up with the ultimate in “created want” which is of course starvation. So one is given the whole plan—to be economically sound, a population must be starved to death.  And if you look around today, you'll see Keynes's theories are being gleefully followed!  Taxes are rising, living costs are rising.  This squeeze is creating "want" on the part of the population as wages remain stagnant and, in some cases fall!

Report this comment
#28) On March 31, 2009 at 12:04 PM, GNUBEE (25.95) wrote:

To all, here is a good example of my thoughts concerning the matter. Granted it is 340 some pages, but you can cheat and only read the core sections to this discussion if you like.

Harvey Reeves Caulkins "A man and his money" http://openlibrary.org/details/manhismoney00calkiala

I hope my view makes sense with this.

GNUBEE

Report this comment
#29) On March 31, 2009 at 12:13 PM, whereaminow (21.66) wrote:

GNUBEE,

Thanks for sharing. I'll make an effort to read it and offer some thoughts in time.

David in Qatar

Report this comment
#30) On March 31, 2009 at 1:19 PM, imeasure (< 20) wrote:

GNUBEE

Thanks for the thoughtful reply. 

“I never said it is incompatible. I said it is not a requirement. Property ownership is however a cornerstone for a society, since a society needs agreed upon fundamentals.”


Agreed. Apologies if I misinterpreted your meaning. 

“‘The Bible displays throughout its text an economic system fundamentally based upon the individual ownership of property’ That is true of economic systems, but not Christianity.”

Implicit in the Old Testament command “thou shalt not steal” is God’s stamp of approval on the ownership of private property. Taking something that was not rightfully my neighbor’s in the first place would not be a sin and there would be no need for such a commandment. In the New Testament we have Christ’s own “love your neighbor as you love yourselves” as one of the two greatest commands that “sum up all the law and the prophets.” Certainly loving your neighbor means respecting his property much as we wish to have our own property respected. And since Christianity is fundamentally about the restoration of a right relationship between God and Man (including our neighbors) I stand by my prior statement.  

“I fail to see how owning property is one of the greatest antidotes to poverty.”

Let me go further on this point.

 Enshrined in our fourth amendment to the constitution is the right of the people to “be secure in their persons, houses, papers, and effects.” This is one of those God given rights that government is to help secure (I would personally argue it is government’s greatest obligation toward preserving order – but that’s my opinion).


What is the effect of being secure in your property rights? To put it simply you are able to begin productive activity with the reasonable expectation that you will receive the fruits of your labors. This is the foundation of economic activity. 

Because Bill Gates believed his property rights were secure, he was willing to risk capital and effort to develop software that has changed the world. Further, because he was able to profit from that enterprise, he has become one of the greatest philanthropists of all time. In a world where the government did not enforce the property rights of individuals it’s not hard to imagine technological innovation (and associated improvement in living standards) grinding to a near standstill.   

“Being filled with a giving spirit is a far more substantial antidote to poverty and suffering. That giving spirit in pure form cares not for ownership of property.” 

That strikes me as an example of the bifurcated thinking I referred to in my prior post. One way we exhibit the life of Christ is when we submit to our unique God-given calling and exercise stewardship over what God has entrusted to us.

Jesus was a carpenter in Galilee for most of his life. That wasn’t just a temporary assignment until he could get on with the spiritual stuff that mattered. Being a carpenter mattered. And I bet he was an outstanding one at that. You can certainly show your love for a neighbor by building a high quality table at a fair price. In addition to freeing us from the power of sin, he came to show us how to live.


Appreciate the dialogue.

Brent in St. Charles 

Report this comment
#31) On March 31, 2009 at 2:10 PM, GNUBEE (25.95) wrote:

Brent, Always appreciate a good converstaion.

In my post above it says "work to create a better word", I meant "world", sorry

"What is the effect of being secure in your property rights? To put it simply you are able to begin productive activity with the reasonable expectation that you will receive the fruits of your labors. This is the foundation of economic activity.  " - To me this statement relies more on trust in Law, than trust in God.

The Gates example is suspect as some claim he stole the concept of "windows" from Jobs, but I get the idea. To try to guess at the Gates motivation is a misguided effort though. Assuming or judging their intentions does no personal good. All you can do- as you said- is  use what you are given to the best of your abilities. Not worry what others are/have done.

Owning property does not in itself motivate charity. You could argue that if you have nothing, you can give nothing. But giving encompasses more than material items, so with no posessions one could still give. The inner security in knowing that you are just a steward allows the freedom to give without ends. You give because you want to, not because you can. Because giving if your heart is not in it defeats the entire concept. You'd be the same off as if you kept your possessions.

David- looks like we've kept going and going into the rabbit hole...

Report this comment
#32) On March 31, 2009 at 2:38 PM, whereaminow (21.66) wrote:

LOL GNUBEE, this is what I should expect from bringing up religion.

My purpose with this series is simple. Present a case against unbacked paper money, in particular this system which is accompanied with a legal monopoly prviliege for the Fed. Show that it is unethical, unstable, detrimental, leads to tyranny, etc..

Then in the finale, present an alternative system, building on the principles presented throughout the piece.

So no I don't want to go too far down the rabbit hole with you guys. I just wanted to point out that where don't hear Christian voices in this conversation, and that I welcome them for stated reasons.

David in Qatar

Report this comment
#33) On March 31, 2009 at 7:06 PM, TMFLomax (49.22) wrote:

Thanks for the thoughts on the shareholder, David -- political entrepreneurs is a good way of describing what we have now. That's definitely not the competitive spirit I want to see in my companies for sure -- right, they can't cut it in a truly competitive marketplace. It's a huge problem now, and I think it's important to be aware of it and call it out.

Rothbard's on my reading list too... I really need to get cracking, clearly.

Report this comment
#34) On March 31, 2009 at 7:58 PM, whereaminow (21.66) wrote:

Man, Economy, and State

You MUST read this! :)

 

Report this comment
#35) On March 31, 2009 at 8:10 PM, TMFLomax (49.22) wrote:

Hey awesome -- just ordered it for my Kindle. :) I have "The Mystery of Banking" here, any recommendations as to which to read first?

Report this comment
#36) On March 31, 2009 at 8:22 PM, whereaminow (21.66) wrote:

yay!!!!!

M.E.S. is something you should pick apart, a chapter at a time, over the course of a year or two. It starts simple, then evolves into fairly complex subjects that anyone would have to pause over. But it's phenomenal.

I haven't read Mystery yet, but from what I've read, it seems a quicker read.

Enjoy!

Report this comment

Featured Broker Partners


Advertisement