Guest Post: R.I.P, Homo Economicus: On the End of Ubiquitous Poverty and the Beginning of Universal Abundance

Tyler Durden's picture

Submitted by Free Radical

R.I.P, Homo Economicus: On the End of Ubiquitous Poverty and the Beginning of Universal Abundance

“I draw the conclusion that, assuming no important wars and no important increase in population, the economic problem may be solved, or be at least within sight of solution, within a hundred years. This means that the economic problem is not – if we look into the future – the permanent problem of the human race.” – John Maynard Keynes, Economic Possibilities for Our Grandchildren, 1930, [author’s emphasis]

There have of course been some “important” wars (though in truth they were, and remain, mere installments in a Long War that is by no means over).  And there has of course been an “important” increase in population (the abreaction, for the most part, of the premodern underbrush that was uprooted amid the modern nation-state’s relentless campaign of unification, centralization, and consolidation).  But let us give Keynes his due for imagining a time, in the not-too-distant future, when “the economic problem” – which is to say, the scarcity that impels all economic endeavor – will at long last have been solved, and universal abundance is at hand.  Let us do so, however, with no illusions about who the man was, fully acknowledging that he was “a charming but power-driven statist Machiavelli, who embodied some of the most malevolent trends and institutions of the twentieth century” – so malevolent, in fact, that one is left to wonder what Keynes might have had to do with the fact that, eighty years later, a solution to “the economic problem” seems more out of reach than ever.

After all, standardizing for population growth since 2005, the chart below would now indicate that fully 5.5 billion people live on less than ten dollars a day, while nearly a billion live on less than a dollar a day:

And while America’s poor appear to be quite well off by world standards, the fact is that they now represent nearly 14% of the U.S. population and that their numbers are skyrocketing, as the real unemployment rate surges toward 25%:

And not surprisingly, food stamp use is also skyrocketing:

 

Which is to say that Americans in general are an ugly mix of Stanley Johnsons so buried in debt that their toys have either already been taken from them or soon will be,  their spending now in freefall, as it returns to its historically sustainable level (after, in all likelihood, overshooting it):

All of this happening as income inequality rises to extremes not seen since 1929:

But this was to be expected, after all, as the fascism inherent in the U.S. banking system reaches its apotheosis in the privatization of profits and socialization of losses, such profiteering, regardless of how it manifests itself, being standard operating proce-dure for the state.  For while it “is almost universally considered an institution of social service,” the state is really nothing more than “the systematization of the predatory pro-cess over a given territory.”  Why?  Because

the state cannot even exist without committing the crimes of extortion and robbery, which states call taxation; and as a rule, this existential state crime is but the merest beginning of its assaults on the lives, liberties, and property of its resident population.

And simply put, these assaults – whether perpetrated by the U.S. fascialist state or variations upon this theme elsewhere around the world – have so impoverished the masses (why else would they be the masses?) that to contemplate an imminent solution to “the economic problem” admittedly seems absurd.

Nonetheless, let us return to Keynes meditation thereon and, in particular, to his ob-servation that the historically “slow rate of progress, or lack of progress, was due to two reasons – to the remarkable absence of important technical improvements and to the failure of capital to accumulate.”  For surely this is so, not just because the state’s “predatory process,” century after century, has so hampered capital accumulation as to stunt technological advance but because, in the last century, the state’s predations were fully systematized.  And they were systematized in no small part because of Keynes’ absurd belief that “there are no intrinsic reasons for the scarcity of capital.”  For just as there is not (there never was, nor will there ever be) any genuine capital accumulation that is not the result of savings – specifically, the saving of productive work of one form or another – so is there an inherent limit to capital.  And as savings are nothing other than deferred consumption, it is clear that one cannot simultaneously consume that which one defers the consumption of, which is to say, one cannot have one’s cake and eat it too.

This is precisely what Keynesianism attempts to do, however, facilitated by the attendant notion that money is not a good used as a medium exchange but simply a medium of exchange that, being irredeemable for any good, can accordingly be generated without limit.  No wonder, then, that with both capital and money thus unhinged from economic reality, governments, in thrall to this alchemical fantasy – would systematically plunder their countries’ economies to the point of grinding them to a halt:

A major part of the growth in the last 100 years and especially in the last 40 years has been built on an unsustainable build-up of debt levels. These debt levels will continue to swell for another few years until the coming hyperinflation in the West leads to a destruction of real asset values and a debt implosion.

We have hell to pay for the sins of Keynesianism, in other words, the only question being what level of hell we descend to.  And as this is largely a function of how long the journey takes, it is in turn a function of how “successful” governments’ extend and pretend policies are, meaning that the longer they delay the onset of economic reality, the deeper into hell we will descend.

So again, under the circumstances – that is, given governments’ unremitting deter-mination to exacerbate the devastation that their Keynesian folly has already caused – how can we even contemplate a solution to “the economic problem,” much less postulate an imminent solution?

We begin by considering what our lives would be like if we hadn’t been subjected not only Keynesianism but to its indispensable precondition – that is, if we had lived all this time within the liberating confines of sound money, which by definition has two complementary and vitally important aspects: (1) “It is affirmative in approving the mar-ket's choice of a commonly used medium of exchange,” and (2) “It is negative in ob-structing the government's propensity to meddle with the currency system.”  And since gold has manifested these two aspects for over five thousand years, we assert without equivocation that a sound monetary system is a 100-percent-reserve gold standard that accordingly “secure[s] the economic system against the evils both of inflation and of de-flation/depression.”

And let us also assert that however beneficial this twofold security would be, such a monetary system would do much more than that.  For “the typically modest increase in the quantity of money and volume of aggregate spending that takes place under a gold standard is accompanied by actually falling prices [author’s emphasis],” the greater production and supply of a good (or service) being a result of the greater efficiency that is expressed as Total productivity = Output quality and quantity / Input quality and quantity.  That is to say, as input quality rises and input quantity falls, both output quality and quantity rise, resulting in the increased productivity that is reflected in the ability to offer the same product (or service) for less or, alternatively, a better product (or service) for the same price.

And we have of course been experiencing this very phenomenon for many decades now, as the cost of computing power has fallen precipitously, the industry’s productivity increasing in accordance with what has come to be known as Moore’s Law:

The computer/electronics industry, in other words, has accomplished what the rest of the economy has not – i.e., an increase in productivity sufficient to offset government-induced inflation – the point being that in a truly sound-money economy, the gain in purchasing power would be across-the-board.  That is, increased productivity would result, over time and in all sectors of the economy, in falling prices that would not be deflationary for the simple reason that they would not be the result of a monetary contraction, the difference between the two being all the difference:

What this means is not only that in a sound-money economy, prices would fall as productivity rises; it also means that in an increasingly computer-driven, nano-technological, sound-money economy – where computing power rises as machine size falls – productivity would grow exponentially, not only driving prices down at a similar rate but ultimately driving them to the vanishing point , which is to say, to zero. 
For example:

We are awash in energy (10,000 times more than required to meet all our needs falls on Earth) but we are not very good at capturing it. That will change with the full nanotechnology-based assembly of macro objects at the nano scale, controlled by massively parallel information processes, which will be feasible within twenty years. Even though our energy needs are projected to triple within that time, we’ll capture that .0003 of the sunlight needed to meet our energy needs with no use of fossil fuels, using extremely inexpensive, highly efficient, lightweight, nano-engineered solar panels, and we’ll store the energy in highly distributed (and therefore safe) nanotechnology-based fuel cells. Solar power is now providing 1 part in 1,000 of our needs, but that percentage is doubling every two years, which means multiplying by 1,000 in twenty years.

Let’s say that by “extremely inexpensive,” we’re talking about the solar equivalent of dollar-a-gallon gasoline in 2030.  We are then talking about a less than one-cent-gallon equivalent seven doublings later and less than a tenth of a cent three doublings after that, meaning that by 2050 the world’s energy needs would be met at virtually no cost. And simply put, to apply this same logic to the economy as a whole is to understand how “the economic problem” stands to be solved and how universal abundance therefore stands to be achieved.  Not eons from now, not millennia, not centuries, but decades.

While Keynes had only a faint notion of this hyper-productivity dynamic, we can at least give him his due for imagining that it wouldn’t be long before man would be “faced with his real, his permanent problem – how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.”  For that “science and compound interest” are nothing other than the exponential growth in technology that, aided and abetted by sound-money’s inherent price-reducing proclivity, do in fact have the power to free man “from pressing economic cares.”

Unfortunately, however, we must also give Keynes his due for helping to postpone that day, his contempt for what he perceived as a barbarous relic leading to FDR’s confiscation of the people’s gold in 1933 and thus the end of what remained of the gold standard in the United States (the world gold standard ending in the Nixon Shock of 1971).  For with no further restraint on the international banking cartel, the full fury of the stealth tax would be loosed upon the world and vast swaths of its people (most notably the American people) sold into debt slavery, the supreme irony being that “the eco-nomic problem” could well have already been solved, had a sound monetary system been in place during the near-century that the cartel’s foremost member has held sway.  For the pseudo-productivity of much of the U.S. economy would have been genuinely so, as would the rest of the world’s.  And the wars that could not have otherwise been funded would not otherwise have been fought, nor would our socially debilitating welfare programs have had the wherewithal to entrench themselves, the combined depredations of which have sapped incalculable amounts of humanity’s time, talent, energy, and imagina-tion.

Even so, such is the ordinary man’s inborn ingenuity that despite those depreda-tions, he may yet find himself, in 2030, confronting the fact that “his real, his permanent problem” isn’t a problem at all.  For what Keynes didn’t envision is that the ordinary man a century later, having decades before begun to internalize his machines, would be quite extraordinary, empowering himself to the point of not only boldly going where no man has gone before but of becoming what no man has ever been before.  No longer having to struggle with the problems of tired old homo economicus, that is, a vibrant young homo abundus would be charting a course that would have been beyond his predecessor’s wild-est dreams.

But as those dreams may yet be shattered, we will postpone further examination of homo abundus until we’ve taken full measure of “the predatory process,” beginning with my next submission: “The Twin Pillars of Civilization.”

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Shylockracy's picture

Exceedingly funny, thanks.

En passant, there are two countries whose names are derived directly from the Indo-European word "Aryan", namely, Ireland and Iran.

Iran is already doing its bit by not playing ball with the international crime syndicate that rules the US, Canada and Europe. This is Ireland's chance to revolt, give a big fat finger to the bankster syndicate and recover her dignity. The Irish would be forever remembered and thanked as the saviours of whatever is left of Western civilization.

-Michelle-'s picture

Ireland comes from the Gaelic name "Eire" and the Germanic "land."  Eire was the Irish goddess of the land.

Iran derives from the Persian "Eran."

Aryan itself derives from the Sanskrit word "arya."

 

Rusty Shorts's picture

The Irish people are one of the 13 tribes of Israel, who were enslaved and carried off to Babylonia (Persia) and became one the lost tribes.

Anton LaVey's picture

Yes, and my name is Napoleon, and I am the Emperor of the French.

Seriously, people, how much nonsense can you post on ZH in 24 hours?

Rusty Shorts's picture

"There is a theory that the Irish, or that Insular Celts as a whole, are descended from the Ten Lost Tribes. Proponents of this theory state that there is evidence that the prophet Jeremiah came to Ireland with Princess Tea Tephi, a member of the Israelite royal family.[54] Proponents of this theory point to various parallels between Irish and ancient Hebrew culture. For example, they note that the harp, the symbol of Ireland, also plays a role in Jewish history, as the musical instrument of King David. Some maintain that the Tribe of Dan conducted sea voyages to Ireland and colonized it as early as the period of the Judges under the name Tuatha Dé Danann.

Aspects of this theory are also sometimes cited by adherents of British Israelism, as one possible explanation of how the Ten Lost Tribes might have reached the British Isles. However, British Israelism takes many forms, and does not always use this hypothesis as its main narrative"

 

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

 

 

 

 

doolittlegeorge's picture

And a Happy Turkey Day to you, too.  Never forget "this day had nothing to do with the Pilgrims and everything to do with a Civil War."

jeff montanye's picture

thanks for the history lesson.  see where fdr gave it a little more shopping time before christmas. 

boooyaaaah's picture

George Washington's 1789 Thanksgiving Proclamation

Whereas it is the duty of all nations to acknowledge the providence of Almighty God, to obey His will, to be grateful for His benefits, and humbly to implore His protection and favor; and Whereas both Houses of Congress have, by their joint committee, requested me to "recommend to the people of the United States a day of public thanksgiving and prayer, to be observed by acknowledging with grateful hearts the many and signal favors of Almighty God, especially by affording them an opportunity peaceably to establish a form of government for their safety and happiness:"

gwar5's picture

He sounds like a marxist there. I wonder if Keynes really envisioned deficit spending and debasement as a permanent condition, or, just 'priming the pump'. Would he approve of Bernanke?

I know what Krugman thinks.

 

 

 

nmewn's picture

Keynes economic theories stem from a deeper core set of beliefs.

If you trace it back it merges with a belief system that there will always be a statist elite class...to support them, the worker class...then the bottom class.

At it's core is eugenics...something the bottom class has never heard of.

-Michelle-'s picture

Oh, they've heard of it.  They just called it "Planned Parenthood."

boooyaaaah's picture

After WW1

The War That started in trenches where the US Civil war ended, and ended with tanks and bombers.

Then the farms used deisel powered Combines, Harvesters displacing unskilled farm hands, And the plow horse industry.

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

Prices especially food dropped , and the now unemployed farm hands became a burden to feed.

And this lead to the great deflation (depression)

Today the mechanization of India and China, the easy transformation and exportation of creative ideas is likewise causing prices of everything to drop and unemployement in the high priced West

Displaced labor in the West adds to the problem as politicos try to cure it through deficit spending and buying votes.

One article I read on ZH noted that once polititians realized that deficit spending could be finaced through money creation -- rather than taxation -- our society was doomed.

How many union telephone operators, linemen,installers, paper manufacturers, map publishers, book printers, newspaper printers, encylopedia salesmen etc etc are now unemployed  because I have a smart phone for $200 plus a montly fee -- which because of inflation is getting lower and lower.

The solution of Printing Money to rebalance the economy does seem criminal, but rapidly dropping prices , which does spread from one industry, farming, to others, auto production

Tyler is a beneficiary of the changes and is clamoring for the preservation of money's old value. Because he is making more and doesn't want it depreciated.

Ask Tyler if he wants to work for a old fashioned Newspaper --- a company,and a tycoon, that had the financial wealth to purchase the presses and hire the labor to keep them rolling. This wealth, formerly required, has been dispersed so a smart kid like Tyler can be independent of the cigar smoking Tycoon.

So the cost of publishing has fallen, but Tyler wants the same dollar in his pocket that the Tycoon of 1900 had in his pocket.

Doesn't work that way Tyler you big cry baby.

Why dosent Tyler figure a way that the dollar of today's publishing can be related to the dollar of the last Century's publishing.

I know if it took a million dollars to get a paragraph out a century ago -- Building, Presses, Paper, Ink, Workers, Delivery Boys, ----

Then today after a few minutes on a lap top, a few cute assistants, and the almost free internet --- it takes 100 dollars -- and dropping -- to publish a paragraph.

That is why the value of money changes

Tyler should figure how to effect a change with the now useless buildings, equipment and workers. Rather than ranting that he wants to continue to be paid in Tycoon dollars.

He would not know how manufature or run a press or fold a newspaper

And for that matter he only knows how to use the internet not how it works.

His value is much less that the Tycoon of the 1900's. And inflation maybe the only way to pry dollars from the grip of the Tycoon so people like Tyler has a chance to fullfill his destiny.

Remember Spain Got the Gold thinking it was wealth.

England got Shakespeare and Francis Drake 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

snowball777's picture

On the 'permanent condition':

"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."

On the Bennie and the Inkjets:

Lenin is said to have declared: "The best way to destroy the capitalist system is to debauch the currency. By a continuing 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 sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become 'profiteers,' who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

 

jeff montanye's picture

re: lenin.  as you know it is keynes's magnificently prescient book about the end to ww1 (the great war), "the economic consequences of the peace" that, approvingly, is the most cited source of the lenin observation.  

keynes is a far more complex mind than many on this site seem to think.  what we have and are experiencing is not keynes's keynesianism.  he was not a fool.  he advised saving resources in fat times to spend them in lean.  

in moments of impatience with the uncomprehending world he used patently absurd examples (burying jars of money then paying working people, not bankers, to dig them up) to "jar" people's minds into seeing what he saw (and, to a degree, what good princes and kings have seen for millennia): save in fat, spend in lean.  the modern nation state's monetary system (not to mention global trade and food preservation) made this easier than storing grain, what with the wheat ergot and all.  

what we have experienced and are experiencing is keynes stood on his head: deficit spending and wild federal debt expansion in prosperity and (soon if the imf, ecb, et. al. have their way) austerity in scarcity.

snowball777's picture

Agreed, but it's well-nigh impossible to get the predisposed who frequent these parts to consider such subtleties. It's a pleasant surprise to run across someone who has actually read Keynes' work; doubly so on ZH.

traderjoe's picture

TD posted a decently long article on Keynes a few months ago that went further into his beliefs, and argued that even Keynes would be turning over in his grave right now. I think most people on this site realize his name has been attached/co-opted to an over-simplified version of his theories/writings. 

Dick Buttkiss's picture

I take it, then, that you take issue with Rothbard's appraisal, as cited in the first paragraph of FR's post:

http://mises.org/etexts/keynestheman.pdf

If so, I'd like to hear more about Keynes' "subtleties."

nmewn's picture

The problem...of course...is his "theory" relied on others to "perform"...human action.

They don't...and never will...because they can't in a "free economy"...ergo...works best under despots & dictators...who would of course loot the treasury for their own personal needs & desires.

Again...Human Action...completely outside the bounds of mathematics ;-)

I think close to a century of failure is enough.

Done.

SeeYa

chopper read's picture

I think close to a century of failure is enough.

 

keynesian economics, at its best, succeeds in punishing the saver and investor (never allowing for falling prices) and rewards reckless borrowing and rabid consumption at the expense of conservation.

worse yet, these keynesian apologists continue to enable the thievery with cries of,

"THEY'RE JUST NOT DOING IT RIGHT!"

After 54 years of communism in Cuba, are they "just not doing it right"?

...and since Keynes and FDR had to take 8,000 tons of our gold in order to enact this grand scheme of looting, can we please now have our gold back since it is a dismal failure?

 

next time, we do not give up our gold.  

i've got loads of friend all over the midwest who are stockpiling guns, and have silos of corn and fields full of livestock.  we're well aware these keynesians will be coming for it when they do not get their SDR one-world currency.  We intend to stand between them and the last bit of stuff still controlled by common people in America.  

nmewn's picture

I'm with ya chopper...we haven't quite formed cells yet...LOL...but the discussion with friends & family is the same...even among my "liberal" friends...we have withdrawn our consent to be governed by these clowns even as we try through peaceful means to change it back to some semblence of reality.

Something is clearly stinking and it's coming from DC & NY...everyone smells it.

More to your point...in my view, Keynesian "theory" was taken up by the statists (and thus elites everywhere) because it comports with their world view of desiring domination over the seething masses...it gave them a sense of control.

Yes, by saying gave, I'm speaking in the past tense...it's in it's death rattle I believe.

Of course, socialists/communists/fascists have now begun to use the soft term for these variants of anti-individualistic thinkers...called "progressive"...but it is the same thing.

That dog won't hunt...LOL.

Great post below by you by the way...it's well worth others time to drop down and read it...or they can skip to here;

http://www.zerohedge.com/article/guest-post-rip-homo-economicus-end-ubiquitous-poverty-and-beginning-universal-abundance#comment-756653 

 

AnAnonymous's picture

he advised saving resources in fat times to spend them in lean.

 

Nice. But in a consumption game, this way of doing is probably the least effective of all. People who save in a game consumption only spare resources for people who do not save.

Running debt all the times is the best to capture an optimum of resources.

We are in this paradigm. Debt is only a tool to justify present consumption by the promise of repleting it in a near future. That story on energy is just part of the scheme. The west is consuming like mad energy sources that are known to be limited but in return, promise to come with new energy forms that will dwarf the previous ones.

Debt is simply a way to capture as much as possible of the current amount of resources.

Saving is stupid in the current framework. The whole stuff has always been about getting deeper in debt to consume even more, not about how to pay back the debt.

We have been defaulting now for decades and people in charge know that it is highly likely that the consumption brought from the future (debt) into the present will not meet an equivalent in the future.

 

By the way, the new paradigm (among the four) will be to run deficitis in good times (to fatten the soon to be extorted) and then run austerity programs in harsh times (to cut off dead wood)

Popo's picture

Great quote.  It's one of the best to describe our current situation.  It's the last part of that quote that is so frequently ignored:

" As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery. "

And there you have 2011, in a nutshell.


midtowng's picture

Keynes sounded like any utopian. Nothing to indicate marxism.

bigelkhorn's picture

Krugman, isnt he just another elitist trying get in the way of the truth.

Bernanke is either the dumbest idiot or the smartest genious the way he is carrying on and making it look like the fed failing is a mistake. comon think about it....no matter what the others say. I saw a good post on it over at http://www.forecastfortomorrow.com/news

Belrev's picture

42 million Americans on foodstamps? That is news to me. Everywhere I go I see illegal mexicans and pakistani taxi drivers flashing their foodstamp and medicaid cards. How many of those counted as "Americans" are actually legal residents?

snowball777's picture

Wow, you can tell the illegal Mexicans from the legal ones?

Nice hood; very chic.

Goldilocks's picture

pfft, illegal whatever ... they are human beings.

William F. Dulle's picture

Population is as overstated as any other important government statistic. It's a ruse, get it? 170,000,000 in '58, but 300,000,000 now? What a joke.

Population numbers are as inflated as the dollar.

Well, maybe not. That would mean there are only 30,000,000 U.S. citizens.

My guess is that there are about 200,000,000 citizens, and population is on the decline.

Rusty Shorts's picture

Interesting, go on, please tell how you came to this conclusion?

mkkby's picture

Who cares about your opinion? Support it with facts or buzz off.

BigJim's picture

I like sound money as much as the next man.

But I think assuming this would lead the entire economy to grow at the rate postulated by Moore's 'Law' is a bit of a stretch. 

snowball777's picture

The most ignorant assumption is that an economy based on a hard gold standard would have managed to come up with computers in the first place.

 

GoldSilverDoc's picture

There is a medical term for that type of thinking - it is called "flight of ideas" (disconnected logic), and is common in schizophrenics.

You might want to check that out.

snowball777's picture

Sure...everyone who disagrees with your chosen viewpoint is schizotypal. Uh huh.

So how would you see the billions in capital required for an ion beam lithography plant being generated in an economy with an inelastic currency?

 

StychoKiller's picture

Your argument makes sense only if the price of Gold is FIXED. A lot
of people are snowed by the $50 denomination on the current Gold Eagle coin
(1 Troy ounce of 24karat Gold), whereas in reality, Gold is trading at

the price of $1,380/ounce (more or less).  What if the $/Toz were $500,000/Toz?  Would your argument still be valid?

snowball777's picture

That would still be money backed by gold (soft standard), not gold as money (hard standard), which was the premise I slammed.

The "death of the dollar" implies $/Toz would no longer be a valid concept.

 

RockyRacoon's picture

To become a standard comparable to the meter and the gram, gold would have to be moved from the economic/political arena to the scientific, openly and unanimously declared world-wide as THE sole true-wealth reference against which all other wealth is compared, and once and for all disconnected from economic and political influence and control of any kind, just like any other scientific standard. Only then would the relative values of currencies and monetary policies become transparent and resolve in proper perspective with each other and with goods and services.

http://fofoa.blogspot.com/

snowball777's picture

If we're going to wax scientific, then let's propose using energy itself as currency.

Like gold, it's impossible to fake, but is much more abundant and easily metered. Sure, people would be able to 'counterfeit' it with a bicycle and some coils, but we could justifiably blame anyone who was still poor for their own condition.

 

traderjoe's picture

I don't see your supposed attachment of innovation and the quantity of money supply, or the number of zeros printed on a note. Lots of innovation and inventions occurred under the gold standard. And maybe an ion beam plant wouldn't cost "billions" but millions because there was one less zero on the end. 

We aren't on the gold standard. There's no way to discuss what could or wouldn't have been invented. That's like saying 2 million jobs were saved from the stimulus package. 

But linking innovation to the quantity or type of currency is not consistent with historical facts. 

snowball777's picture

Point out any successful culture which used or is using gold as money (no dollars, no zeroes) which accomplished anything in the absence of slave labor.

chopper read's picture

keynesian economics, at its best, succeeds in punishing the saver and investor (never allowing for falling prices) and rewards reckless borrowing and rabid consumption at the expense of conservation.

worse yet, you continue to enable the thievery with cries of,

"THEY'RE JUST NOT DOING IT RIGHT!"

After 54 years of communism in Cuba, are they "just not doing it right"?

view the expansion of outright global enslavement as keynesian debt-based monetary systems have been exported from Great Britain and the United States and gripped the globe.:

http://www.economist.com/blogs/dailychart/2010/11/government_debt?fsrc=s

who do you believe is receiving these interest payments? Why are we paying a private organization to circulate a private currency? why has this currency removed itself from any asset-backing against all presidence in relation to the past 5,000 years? 

Why do we pay interest to a private banking cartel simply so we can trade with each other? Further, our massive treasury bond market is grossly front-ran by the International Banking Cartel, including your good buddies Goldman Sachs and JP Morgan Case. How can you or anyone be apologetic on behalf of this fraud? How is this moral?

Do you have ANY IDEA what is taking place in Europe right now? Are you recognizing how Ireland is going the way of Jamaica, DR Congo, South Africa, and Turkey as it is "saved" by the IMF? Of course, this is not for free, is it? Any ideas who the IMF will "save" in the future?!!

WHY NOT introduce Kennedy's asset-backed silver certificates and Lincoln's population-linked greenbacks?

WHY NOT allow multiple means of paying Federal taxes beyond a paper note of a private corporation?! Is not our current system insane? Has this not caused major suffering since the Federal Reserve Act of 1913?!! Did we not have our very own Gilded Age prior to this debt-based monetary system which brought 8,000 tons of gold to our shores that sits in Fort Knox today?!! How do you believe that America became so prosperous?!!

 

DO YOU WISH TO KNOW WHY WE REVOLTED AGAINST THE BRITISH (ROTHSCHILD'S BANK OF ENGLAND) FROM THE START?

“Capitalism is organized crime and we are living in an usury-market economy, not a free-market economy. It is by design that the rich get richer and the poor get poorer, not by accident. ”- George Washington

"We began planning the Revolutionary War in order to issue our own money again ...and keep King George III and Bank of England from enslaving us with debt, and making Americans their financial slaves." ~ Benjamin Franklin, 1790.

YOUR KEYNESIAN APOLOGETICS ENABLE THESE LUNATICS!!!

http://www.youtube.com/watch?v=jgCDsjfGd

WAKE UP!!! we are getting PLAYED!!!!!!

Consider this excerpt from Bill Bryson's book, "At Home" (pages 233 - 235). It highlights the period in America where there was no income tax or other major 'redistribution of wealth', and there was no centralized (communist) policy for money planning allowing for a private monopoly on 'legal tender', but rather both competing and single asset-backed currencies at various times in various regions.

Ideas and wealth were pouring into America with this more favorable business environment. The "gap" between the wealthiest people and the poorest was, of course, boundless, but the additional wealth creation came in from overseas via massive exporting, and, in addition to the entrepreneurial "rich" creating manufacturing jobs, they threw parties and built homes that created jobs, and they funded universities and hospitals to secure their legacies (as the mega-rich very often do). They also brought art and worldly treasures to our shores that sit in our museums today.

Importantly at this time, ambitious immigrant workers were certainly no less "exploited" than anywhere else in the world and, unlike the restrictive class barriers and lack of upward mobility in Europe, new and existing Americans were becoming millionaires by the tens of thousands.

This growth was not agrarian via slavery (this ended in 1865) or cotton, but rather industrial via steel and ingenuity and, most importantly, via the power of property rights (including virtually no taxes, i.e. "right to your own wealth") and free markets. This unprecedented growth happened decades before "the roaring 20's" of easy credit created by the private Federal Reserve Bank.

Read for yourself:

"The Eiffel Tower was the most striking and imaginative large structure in the world in the nineteenth century, and perhaps the greatest structural achievement too, but it wasn't the most expensive building of its century or even of its year. At the very moment that the Eiffel Tower was rising in Paris, two thousand miles away in the foothills of the Appalachian Mountains in North Carolina an even more expensive structure was going up - a private residence on rather a grand scale. It would take more than twice as long to complete as the Eiffel Tower, employ four times as many workers, cost three times as much to build, and was intended to be lived in for just a few months a year by one man and his mother. Called Biltmore, it was (and remains) the largest private house ever built in North America. Nothing can say more about the shifting economics of the late nineteenth century than that the residents of the New World were now building houses greater than the greatest monuments of the Old. 

America in 1889 was in the sumptuous midst of the period of hyper-self-indulgence known as the Gilded Age. There would never be another time to equal it. Between 1850 and 1900 every measure of wealth, productivity and well-being skyrocketed in America. the country's population in the period tripled, but its wealth increased by a factor of thirteen. Steel production went from 13,000 tons a year to 11.3 million. Exports of metal products of all kinds - guns, rails, pipes, boilers, and machinery of every description - went from $6 million to $120 million.

The number of millionaires, fewer than twenty in 1850, rose to forty thousand by century's end. Europeans viewed America's industrial ambitions with amusement, then consternation and finally alarm. In Britain, a National Efficiency Movement arose with the idea of recapturing the bulldog spirit that had formerly made Britain pre-eminent. Books with titles like The American Invaders and The 'American Commercial Invasion' of Europe sold briskly. But actually what Europeans were seeing was only the beginning. 

By the early twentieth century America was producing more steel than Germany and Britain combined - a circumstance that would have seemed inconceivable half a century before. What particularly galled the Europeans was that nearly all the technological advances in steel production were made in Europe, but it was America that made the steel. In 1901, J.P. Morgan absorbed and amalgamated a host of smaller companies into the mighty US Steel Corporation, the largest business enterprise in the world had ever seen. With a value of $1.4 billion it was worth more than all the land in the United States west of the Mississippi and twice the size of the US federal government if measured by annual revenue. 

America's industrial success produced a roll call of financial magnificence: Rockefellers, Morgan’s, Astor’s, Melons, Morgan’s, Frocks, Carnegies, Gould’s, du Pont’s, Belmont’s, Harriman’s, Huntington’s, Vanderbilt’s and many more basked in the dynastic wealth of essentially in exhaustible proportions. John D. Rockefeller made $1 billion a year, measured in today's money, and paid no income tax. No one did, for income tax did not yet exist in America. Congress tried to introduce an income tax of 2 per cent on earnings over $4,000 in 1894, but the Supreme Court ruled it unconstitutional. Income tax wouldn't become a regular part of American life until 1914, and in the meantime any money that was made was kept. People would never be this rich again."

http://www.zerohedge.com/forum/how-do-we-arrive-eve-our-collapse-0

 

Temporalist's picture

How did civilization ever come about without FRNs?!?!

snowball777's picture

Slave labor and mercantilism.

William F. Dulle's picture

What use is it to rail against Keynes? From what I have read, he was tolerant of alternative viewpoints. It might be that he would have taken a different stand in today's economic conditions. And who gives a shit? If he was the voice of reason, nobody in today's political establishment would listen to him. That's the operative factor, I think.

"Key Largo" is today's America in microcosm. If you haven't seen it, see it. If you have seen it, see it again. The only problem is that heretofore there is no Humphrey Bogart to lead us out of this mess.

nmewn's picture

"What use is it to rail against Keynes? From what I have read, he was tolerant of alternative viewpoints."

Well I guess it all depends on whose alternative viewpoints he was tolerant of.

You be the judge.

"The theory of aggregated production, which is the point of the following book, nevertheless can be much easier adapted to the conditions of a totalitarian state [eines totalen Staates] than the theory of production and distribution of a given production put forth under conditions of free competition and a large degree of laissez-faire."

http://tmh.floonet.net/articles/foregt.html

snowball777's picture

From 'The General Theory of Employment, Interest and Money', Chapter 24:

"But, above all, individualism, if it can be purged of its defects and its abuses, is the best safeguard of personal liberty in the sense that, compared with any other system, it greatly widens the field for the exercise of personal choice. It is also the best safeguard of the variety of life, which emerges precisely from this extended field of personal choice, and the loss of which is the greatest of all the losses of the homogeneous or totalitarian state. For this variety preserves the traditions which embody the most secure and successful choices of former generations; it colours the present with the diversification of its fancy; and, being the handmaid of experiment as well as of tradition and of fancy, it is the most powerful instrument to better the future."

You really ought to read the book yourself, Mewn, instead of regurgitating the expurgated nonsense of others.

nmewn's picture

And you really ought to proof read what you throw up in Keynes defense.

"if it can be purged of its defects and its abuses"

That's quite the qualifier there eh snowball?

This is exactly the issue I stated above that you no doubt junked...elitist, eugenic, control freakish bullshit.

Will you or someone else be deciding what is defective & abusive? Perhaps a committee should be convened? Comprised of whom? Maybe a politburo to ease contentious debate would be better? 

snowball777's picture

Anarchy or nothing? That's quite the childish "excluded middle".

Is Lloyd's 'individualism' an abuse?

Or should we shy away from judgement for fear of being labelled as eugenicists?