Silver dollar certificate, 1886. Photo Credit: Neuroforever
Today (June 5, 2025) is the 142nd birthday of John Maynard Keynes, the English theorist behind Keynesian economics. Keynesianism advocates using the State and its central bank to stabilize the market economy. It calls for government deficit spending to create jobs in periods of high unemployment, and tax hikes during an "overheated" economy to control price inflation.
Keynes's birthday provoked three thoughts, which aren't really about him, but about the nature of his work.
First, the purpose of economics is the same as the purpose of democracy: to stave off revolution. We're told that the government exists to protect our rights. However, the state is based on violence, and all it accomplishes is through violence or the threat of violence. All existing States are inheritors or usurpers of previous States from time immemorial. The rulers rule for the benefit of themselves, their friends, and their allies.
Democratic institutions and the encouragement of civic participation are concessions by the rulers to keep us emotionally invested in the regime. When the State commits awful crimes and oppresses us, we're encouraged to point our finger at our neighbor who voted for these "leaders" and not at the institutions of the State.. When people organize for the voting booth, they're not organizing revolutions.
However, if the people are starving, they may revolt, regardless of how democratic the system is. That's where the economists come in. They inform politicians about what can and cannot be done to 1) make the people economically dependent on the State, and 2) make this dependence sustainable. That is, to stave off bankruptcy and revolution. The people won't overthrow a system if they're dependent on it and can't conceive of how to replace it.
My second thought is that jobs are a form of social control. A significant concern of Keynes was unemployment, which was understandable given that his theories were developed during the global Great Depression of the 1930s.
But why do people need to be employed? How much work do we really need to do to feed and shelter our families? Not a lot, if we want to live simply. Especially if we know how to build things and trade with our neighbors, we wouldn't need much money at all in daily life. However, if we don't work hard at a full-time job, we won't earn a lot of money. That means we won't pay a lot in taxes to fund the military, prisons, and interest on government debt.
That's why the State has a vested interest in keeping us working and encourages us to aspire to attain higher living standards in the form of luxuries (what American politicians call the "American Dream.")
The entire Keynesian model is based on these unspoken premises. Keep us employed so that we can buy more stuff, with the resulting taxes going to political cronies. Use the "stimulus" of deficit-based government spending and subsidies to put more money in people's pockets, increase consumer demand for stuff, and employ more people to make the stuff.
Keynes advocated fiat currency, which creates money out of thin air and whose value is based solely on the credit of the government itself. Much of the world now relies on fiat money because the U.S. dollar is a fiat currency. In the former system, bills were certificates that were exchanged for gold or silver. Precious metals could be put to other uses (jewelry, tableware, electronics); they have practical value. Under fiat currency, however, the dollar bill is inherently worthless because its only value is as a medium of exchange; the dollar can't be used for anything else.
Monetary inflation leads to higher prices, which hurts everyone, but the lowest-income people most of all. Remove all bigotry in America, and there will still be social injustice as long as there is inflation.
And that's not all. My third thought is that inflation is bad for the environment. When the Federal Reserve "prints" money, or creates more money with computer keystrokes to finance government deficit spending, it produces what otherwise would not have been made. It "stimulates" activity that would not have been stimulated. That is, it consumes energy (fossil fuels, etc), and otherwise takes from the planet what would not have been taken at that time.
All for the sake of "jobs," which are for the sake of taxes, which are for the sake of the military, prisons, government debt, and all the programs the government provides to keep us loyal and prevent revolution.
Well, the system has "worked" in that modern democracies haven't had revolutions. But there's no romance in it, and it's hard to ascribe "good intentions" to those with political power, regardless of party. Our leaders don't care if you have a job, or have good schools, or decent medical care. They don't care about you, even as they may provide these things with your taxes. You can tell how much they care about you, about human life, by their foreign policy. Those who would starve and bomb people abroad are perfectly capable of doing the same to you. The only difference is, they want your vote.
Subscription prices to JL Cells are the lowest that Substack allows: $5 per month or $30 per year (50% off). If you enjoy the content, please consider a paid subscription, support me using PayPal with an amount of your choice, or contact me if you prefer an alternative method. At this point, I cannot promise that a paid subscription will provide bonus material, but it will help keep this going. Thank you!
James Leroy Wilson writes The MVP Chase (subscribe) and JL Cells (subscribe). Thank you for your subscriptions and support! You can contact James for writing, editing, research, and other work at jamesleroywilson-at-gmail.com.
Posts
