Keynes Economic Theory

If your idea of You Tube rabbit holes involves animated histories of economists, then this should scratch that itch. An animated history of John Maynard Keynes from Alain de Botton.

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The School of Life, POLITICAL THEORY – John Maynard Keynes

Just FYI, Keynes never said what he is famously credited as saying. At least, as far as we can tell he never said it.

I have been rolling a blog post around in my head discussing just how clueless most people are when it comes to the subject of money. I spent my entire life collecting coins and the last decade championing hard currency, only to be taken strange by my fellow hard-currency promoters when they all decided they wanted eSilver and eGold (don’t get me started on bitcoin) because it was easier to deal with than carrying hard money around with you.

I had a mini-history of the metallic monetary standards play out right before my eyes at that point. How do you know the gold and silver is there if you aren’t holding it in your hands? That exact instant, when the gold wasn’t in the owner’s hand when he spent it, was the birth of fractional reserve banking way back when, when people accepted that paper saying the gold existed was the same as having gold in their hands. Every bank run in history was caused by the gold not being where the paper said it was. I wasn’t going to sign up for that. I wasn’t going to give it all away, then, there for electronic promissory notes anymore than I had believed that a greenback was the same as a silver dollar when it comes to value. They are two completely different things.

There is a lot of writing that I’ve been squirreling away over the years on this subject. Here’s hoping I get the chance to put it all in order and publish it.

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The Bankers Who Broke the World in 1929

Lords of Finance (2009) by Liaquat Ahamed

I titled my review of this book on Audible “Now I Think I Understand” What do I understand? I understand that spitting the phrase “Keynesian Economics” with contempt simply shows your lack of understanding.

John Maynard Keynes was the only figure of authority who understood how the gold standard strangled economics post world war one. This is the most crucial fact that this book adequately lays out the case for. More than that it shows how the knowledge of the old system hamstrung the men of authority between the wars, keeping them from solving the financial crisis of the Great Depression.

The book also touches on how FDR’s complete lack of understanding of the gold standard actually lead to a reinvention of economics through the second world war and beyond. This book presents an excellent view into financial history. Another piece of work which should be required reading for anyone attempting to understand the subject of economics.

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Greece in Perspective

This was the piece I was working on before writing Sidelined by Illness.  It is important enough that I felt I needed to post it belated as it is.  Or maybe it is still current. In any case, here it is.


When I was in high school and later in trade school, I sacked groceries after school as a way to help the family.  It was common in those days (1980’s) for high school students to have jobs on the side, and it was common for children to start working as soon as they showed interest in work, if not being forced to work simply to feed themselves.

We were a poor family. My mother was on her own at that point, had been on her own for several years. Dad had remarried, but found the chore of raising 5 unruly children too much to deal with so he sent us back to our mother in Texas to live. Mom was trying to get an education at the time, living in what could loosely be called campus housing (Avenger Village next to what was then TSTI. An interesting history if you are into that) so the 5 of us crammed ourselves into whatever housing she could afford on the wages for whatever jobs she could get with no education and few prospects.

Which wasn’t much money. Not enough to raise four kids and keep yourself fed at the same time. She had left college to get married when she was 21, and it was typical back then for women to leave college once they had found a husband, sexist as that statement might sound to modern ears. Women weren’t expected to be wage earners, bread winners, back in the dark ages of the 1960’s. They were expected to be mothers and housewives and to put up with whatever their husbands asked of them. So mom started a family with no real job skills of her own beyond the ability to raise children, and when she finally refused to put up with dad’s behavior anymore, fourteen years later, she was on her own with 4 kids and no skills.

We interrupted her education again, but she never complained about it. She just went back to working at fast food joints, bars and restaurants, the odd convenience store job as the demands for housing, clothes and food for her growing children required.

I had already had my first job by that point, my one and only experience with fast-food work (a job you couldn’t force me to do again) if you count work that dad found for me to do the fast-food work was my 3rd job, having worked off and on in his gas station for change to buy comics and sodas with, and then worked in the fields hoeing weeds with a one-armed hispanic friend of my fathers (he could work faster with one arm than I could with two and 20 years less mileage on the meter) but in any case I was no stranger to having to work to get the things I wanted, so back to work I went, paying for my own car as a senior, as well as feeding the family whenever I could afford it.

Which wasn’t often, and not often enough.  There were many days where there simply wasn’t enough food.  Oh, we never really starved, mother was sure of that. We survived on government issued milk and cheese, bread when we could get it.  Proud as my mother was, she wasn’t willing to turn away a hand-out of perfectly good food.  She wouldn’t take food stamps (to this day she refuses them, looks down on people who take them) but she would work at almost any job that was offered. As I said, sometimes three or four jobs at once. So we didn’t starve even if we didn’t have much adult supervision.

So here I was working at a grocery store, often hungry, my job being to haul people’s groceries out to their cars for them, making minimum wage.  Rumor has it that in other states bag-boys (as we were called) got tips. Not in Texas.  In Texas you only tip the cute waitresses and the bartenders who give you a little extra alcohol in your drinks. You certainly don’t tip uppity teenagers who carry your groceries for you.  Teenagers should learn to work hard, because hard work is all you can look forward to in this life.

Part of my job was cleaning the store at closing time (I can mop a floor clean enough to eat off of to this day) Part of that job was taking out the trash at the end of the day. Boxes went into the recycler even back in the bad old days, but there was always trash generated during the day that had to be taken out.  Sometimes in this trash there were unopened containers of food. Being an innovative lad, I would arrange things at the end of the shift so that I could drive around back and pick up the food that I deemed safe to eat, and take it home to my family.

That was, until the new night manager took over. The night manager took an instant dislike to me. He knew I was a poor kid, up to no good.  Set the manager against me so that I was watched specifically to be caught setting food aside.

There was a brand of cookie that came in paper bags back then (even more now) No matter how many times the night stockers were told not to open the boxes with box cutters, without fail, they always opened them with box cutters and slit the bags open. This happened so routinely that if the staff wanted a quick snack, there was always a bag or 10 laying around that the stockers had made unsellable by cutting the bag. Of the 20 or so people working in the store who knew this, I was the only one specifically targeted for reprimand for setting the cookies aside.

Starting at about that time, this petty little modo would check to make sure that I destroyed all the food deemed unsellable. Slice open the milk jugs. Shred the bread bags. Whatever it took.  If people wanted food they would have to buy it through the front door.  No one was getting free meals from the dumpster at their store.

This is the mindset of the average working-class American, in a nutshell. If you want anything, you work for it. If you don’t work for it, you starve. If you can’t work for it, you will starve even sooner. Handouts are for layabouts and slackers, no one who takes a handout is worth anything in life.  Sick people are different, but sick people get better.  That poor soul in the wheelchair, we feel sorry for him, but we don’t give him more than enough to keep him off the streets.  We certainly don’t give layabouts enough that they can survive on without work; and if they do work their benefits are cut off.  If you can work you don’t need any help.

You might well ask at this point What in Hell does this have to do with Greece? The title of the piece is Greece in Perspective.

Yet another person on Facebook blocked me over this difference in perspective.  No amount of reasoning with this person was going to break through her preconceived notions of the unworthiness of those layabout Greek people. No recitation of facts concerning the equally ruinous nature of US policy; of our loophole filled tax structure, underfunded and understaffed taxing authority, the low tax rates that the wealthy enjoy (if they pay any taxes at all) Nothing would dissuade this person from her single-minded determination that Greece should be made to suffer for its people’s laziness.

Never mind that an entire country cannot be compared to one person, whose laziness might or might not be determinable just by looking at them. Never mind that wealthy US business firms instructed Greek authorities on just how to cheat the system, the same firms that then later had to go begging to the US government for bailouts (which shouldn’t have been given in my estimation) in order to avoid the same penance that the Greeks are now willing to go down in flames over rather than pay.

Because they can’t pay. Because Greece isn’t Germany, in the same way that Germany isn’t the US, and that whole regions and political entities cannot be summarized in the behavior of a single individual.  Because you can’t get blood out of a stone no matter how hard you squeeze it.

Sometimes people really can’t provide for themselves.  Sometimes lazy people really aren’t lazy at all; sometimes the seemingly lazy lay-about really is sick.  Laziness is itself a survival trait, a reward for not expending energy the body might need to go that one last inch to get to water.

The final straw for me on this subject was when an acquaintance of mine described his daughter as lazy, because instead of going to college and following the track he had planned out for her, she got married and had a child.  Her husband is working, risking his life in the military. She’s working even if she doesn’t have a job.  She’s raising a child, and that is the hardest work of all. Lazy isn’t the word to describe this person.  You can question her intelligence, but not her willingness to struggle with life.

Sometimes the demands placed on people are just too high. Looking at Greece today we would be better served to remember Germany right before World War Two, rather than dismiss them as that slacker kid who mooched off of you back in college. The missed opportunity of all missed opportunities. Watching the suffering of the German people under the debt burdens laid on them following World War One, the rest of the world could have had pity and eased the burden, given them hope.  Instead we hardened out hearts and forced them to do the thing that made sense to them, empower the only man and his political party that gave them hope.

Shall we descend into war and chaos? Or will we be more like General Marshall? General Marshall who, after the destruction of World War Two and understanding that hopelessness was what motivated the Germans to such desperate acts, proposed what became known as the Marshall Plan. Altering from that time forward how victors treat the vanquished.  Or so we should hope.

A bit of perspective, to brighten your day.

The cost of war is constantly spread before me, written neatly in many ledgers whose columns are gravestones.

General George C. Marshall
Postscript

As it turns out, Greece is not populated by layabouts and ne’er-do-wells. They actually have the most working days per year of any of the European Union nations, according to statistics:

Data from the Organisation for Economic Co-operation and Development shows that workers in Greece put in an average weekly shift of 42 hours, even more than Germans who only manage 35.3.

Willing to work harder than most of the rest of the people in Europe, just not rewarded at the same rate as the rest of Europe. I wonder where I’ve heard that before? As usual, the people who do the work are rewarded the least. The people who hold the investments make all the money. Just FYI, it looks like Greece is no longer out in the woods financially. So I guess that is good news.

Maynard Keynes had more to do with the Marshall plan than General Marshall did, apparently. The plan appears to echo most of the content of The Economic Consequences of the Peace Keynes’ work proposing how Germany should have been treated after World War One. It took another war for the leaders of the rest of the world to figure out what kind of horrors they had helped create in Germany. If we don’t figure this financial mess out soon, we could well be embroiled in war that could possibly end the human race once again. The more things change, the more they stay the same.

The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes by Zachary D. Carter

Read the comments under this image from Facebook:

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…Read them and understand just how far we have left to go to bring understanding of what money is to the average American. I’m getting too old for this shit. They made me buy my own lunch at Burger King when I worked there for 9 months back in 1979-1980. I was fired from that job for necking with my girlfriend in the mop room. It was worth it. That wasn’t the worst offense that I remember when it comes to food and caring for your employees. That award goes to the night manager at that Sweetwater Safeway that I talk about in the original text.

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Featured image from: https://www.theodysseyonline.com/always-the-lender