Keynes & Copernicus: Debasement Of Money Overthrows The Social Order And Governments

Tyler Durden's picture

Submitted by Ralph Benko via The Cobden Centre blog,

The United States Senate moves toward the confirmation of Janet Yellen, now posited for next January 6th, as chair of the Federal Reserve System. Let us in this moment of recess reflect on eerily similar observations by two of history’s most transformational figures:  John Maynard Keynes and Nicolas Copernicus.

One of Keynes’s most often-cited observations, from his 1919 The Economic Consequences of the Peace, chapter VI, contains an indictment of policies very like those which the Federal Reserve System has been implementing for the past dozen, and more, years.  These policies in slow motion are, in the opinion of this columnist, at the root of  the very political, social, and cultural dysphoria — uneasiness or generalized dissatisfaction — predicted by Keynes:

Lenin is said to have declared that the best way to destroy the capitalist system was 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.


Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

An almost identical point was made almost four centuries before Keynes by iconic savant and polymath Nicolas Copernicus.

Copernicus commenced a study composed for the Prussian and Polish governments around 1525, On the Minting of Money, with these words:

ALTHOUGH THERE ARE COUNTLESS MALADIES that are forever causing the decline of kingdoms, princedoms, and republics, the following four (in my judgment) are the most serious: civil discord, a high death rate, sterility of the soil, and the debasement of coinage.


The first three are so obvious that everybody recognizes the damage they cause; but the fourth one, which has to do with money, is noticed by only a few very thoughtful people, since it does not operate all at once and at a single blow, but gradually overthrows governments, and in a hidden, insidious way.

This does not imply plagiarism by Keynes.  The coincidence between Keynes’s “[To debauch the currency] engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose” and Copernicus’s “[The debasement of coinage] … is noticed by only a few very thoughtful people, since it does not operate all at once and at a single blow, but gradually overthrows governments, and in a hidden, insidious way” is, however, striking.

Keynes, like Copernicus a paradigm-shifter, was himself extraordinarily erudite.  It is not impossible the young Keynes came across Copernicus’s work (which reportedly was first actually published in 1826).   The question as to whether Copernicus’s Essay may have inspired Keynes’s observation must be left to authentic scholars such as Lord Skidelsky.

The similarity may be merely that of “great minds working alike.”  This columnist has found but one direct reference by Keynes to Copernicus.

Keynes (whose thinking was mostly, although not exclusively, opposed to the gold standard) was fascinated by one of Copernicus’s most accomplished scientific successors, Sir Isaac Newton.  Newton, also, achieved iconic status, both for his contributions to physics and, as Master of the Mint of Great Britain, as the architect of the modern classical gold standard. Newton’s gold standard was designed along Copernican principles of close correlation toward nominal and intrinsic value.  It served the world very well for almost 200 years.

Keynes was to have addressed the Royal Society of London’s gathering to celebrate the tercentenary of Newton’s birth, an event delayed by the war.  Keynes died a few months before he could present his remarks.  Maynard’s remarks, Newton, the Man, were presented by his brother Geoffrey (and thus might even be characterized as Keynes’s last words).  A brief excerpt:

Why do I call [Newton] a magician? Because he looked on the whole universe and all that is in it as a riddle, as a secret which could be read by applying pure thought to certain evidence, certain mystic clues which God had laid about the world to allow a sort of philosopher’s treasure hunt to the esoteric brotherhood.



[H]e became one of the greatest and most efficient of our civil servants. He was a very successful investor of funds, surmounting the crisis of the South Sea Bubble, and died a rich man. He possessed in exceptional degree almost every kind of intellectual aptitude – lawyer, historian, theologian, not less than mathematician, physicist, astronomer.



As one broods over these queer collections [of Newton's alchemical writings, which Keynes collected], it seems easier to understand – with an understanding which is not, I hope, distorted in the other direction – this strange spirit, who was tempted by the Devil to believe at the time when within these walls he was solving so much, that he could reach all the secrets of God and Nature by the pure power of mind Copernicus and Faustus in one.

As for Copernicus, On the Minting of Money has been translated into English several times yet those translations remained difficult to obtain for students of the monetary arts and sciences.  It has remained mostly the property of elite historians.  Scant and intriguing references were limited to all-too-brief articles such as “Treatise On the Minting of Coin and Copernicus views on economics” by Leszek Zygner of  Nicolaus Copernicus University.

The full text of Copernicus’s fascinating and invaluable essay remained elusive, that is, until last month.

Laissez Faire Books published a meticulous and fresh English translation from the Latin, with prefatory remarks, bibliography, and invaluable critical apparatus by classicist Prof. Gerald Malsbary. (The volume was co-edited by this columnist and by his  fellow columnist Charles Kadlec, with a foreword by Reagan Gold Commissioner Lewis E. Lehrman, whose eponymous Institute this columnist professionally serves).

From Prof. Malsbary’s Prefatory Remarks to Copernicus’s Essay on Money:

NICOLAS COPERNICUS the astronomer embodies the modern scientific ideal: the revolutionary revealer of a new, verifiable scientific theory that shocks our conventional perceptions. However, it is not very widely known, outside of Eastern Europe at least, that Copernicus also spent about twenty years working on economic theory. His treatise On the Minting of Money (Monetae Cudendae Ratio), was first printed in 1826, three hundred years after its composition in 1525–1526. At the time, the semi-autonomous ecclesiastical region between Poland and Prussia where he lived (Varmia) was undergoing a political and economic metamorphosis, and his judgment and expertise (a fruit of the best late Scholastic and Humanist learning) was summoned by the Prussian and Polish governments to help stabilize an inflated currency. Was his insight into monetary matters as revolutionary as his astronomy?

Keynes: “The process [of debauching the currency] engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”  Copernicus: “[The debasement of coinage] … is noticed by only a few very thoughtful people, since it does not operate all at once and at a single blow, but gradually overthrows governments, and in a hidden, insidious way.”

Malsbary: “Was [Copernicus's] insight into monetary matters as revolutionary as his astronomy?” In a word, yes.

Madame Yellen?  Whether one follows Keynes or Copernicus … it is time to return to the principle of meticulous monetary integrity — as exemplified by the classical gold standard — to restore legitimacy both to to the social order and to government.

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lolmao500's picture

Gee Keynes wasn't 100% full of shit... who would have thought.

dudeman's picture

Keynes was actually against flexible exchange rates and it's not fair to take what Krugman thinks as Keynes' viewpoints. I don't agree with Keynes' view of government, but his ideas were grossly distorted by those who wanted to use them to push their own political points. Hayek actually pointed out how Keynes's ideas would be perverted by Socialists several times. Keynes wasn't quite as Socialist as people think he was; not even close. Keynes actually believed the budget should be balanced most of the time. If you take a look through Milton Friedman's books, Friedman uses a lot of Keynes' ideas on inflation. Friedman also talks about how Keynes's views have been perverted. There are lots of good reasons not to like Keynes, but I don't think it's fair to just attack the guy personally and put words in his mouth when he didn't belive 90% of what we call Keynesian economics.

Arius's picture

taking it a step further if I may, I for one, do not think that one should take what Krugman says as Krugman's viewpoint ....

churchill has been quoted as saying that when talking to Keynes was like talking to 3 people, Yes, No, and Maybe ... go figure ...

Dick Buttkiss's picture

First "Newton, the Man," then "Keynes, the Man":

John Maynard Keynes, the man—his character, his writings, and his actions throughout life—was composed of three guiding and interacting elements. The first was his overweening egotism, which assured him that he could handle all intellectual problems quickly and accurately and led him to scorn any general principles that might curb his unbridled ego. The second was his strong sense that he was born into, and destined to be a leader of, Great Britain’s ruling elite. Both of these traits led Keynes to deal with people as well as nations from a self- perceived position of power and dominance. The third element was his deep hatred and contempt for the values and virtues of the bourgeoisie, for conventional morality, for savings and thrift, and for the basic institutions of family life. ... 

That Keynes was a Keynesian ... is the only explanation that makes any sense of Keynesian economics. Yet Keynes was much more than a Keynesian. Above all, he was the extraordinarily pernicious and malignant figure that we have examined in this chapter: a charming but power-driven statist Machiavelli, who embodied some of the most malevolent trends and institutions of the twentieth century.

RafterManFMJ's picture

Economist 1: Work, Save, use capital to invest in productive enterprises.

Economist 2: WHEEEEEEE! Unicorns! Skittles! Buy voted! POWER! Asset bubbles to ride and profit on! War! More lands, More profits!

Hard to believe the Austrian Skool never caught on...

Dick Buttkiss's picture

Yes, we Austrians are so behind the times.

No wait . . .

Clowns on Acid's picture

Yeh...he definitely liked getting ducked up his ass.

putaipan's picture

revealing the secrets of monetary debasement more blasphemous than a solar-centric universe? history is being reclaimed by the insurgents.

Deacon Frost's picture

Refer to the ‘The Collapse of Complex Societies’ by Joseph Tainter;

which makes the case that monetary debasement was one of the main reasons for the fall of the Roman empire.

AUD's picture

Monetary debasement is the main reason for the fall of all empires.

There is no subtler, no surer means of overturning the existing basis of society

Anusocracy's picture

The cause is the debasement of the population.

The debasement of the currency is just a symptom.

America is the modern example.

Dick Buttkiss's picture

I would say cart before the horse, given that debt-driven consumption, as government policy, is destructive of society, turning its members into spending zombies for no other reason than to perpetuate the crony-capitalist status quo.

The result is a public consciousness in which the reptile brain holds sway, both by those doing "God's work" — — and those upon whom this "work" is done.

Whether it ends in extinction, or "merely" in mass die-off, is something we will soon find out, my hope being that enough survive the holocaust to begin anew, the remnants of civilization being sufficient for them/us to do so.

AUD's picture

Keynes quote is perceptive. What he leaves out is that "not one in a million is able to diagnose", because money has powerful effects on human behaviour. It is the one, & only, thing you cannot have too much of. It's called constant marginal utility.

Christina McDowell might have got scammed by her dad, but she'll still do anything for money.

max2205's picture

Yellen:  in a minute, I am douching the beaver

disabledvet's picture

I'll never forget my first and only lecture given to me by a Professor from India in which he said "the Sun is very hot, the Sun is very big, the Sun is very luminous." If were to go strictly by the power of observation alone this of course would be "seen" as categorically false. The sun might "warm us"...but it does burn us to cinders as fire wood. The sun is very bright...but it does not blind us upon its rising and setting. And clearly "the sun is not bigger" as we can see our land and see that our land is much bigger than the sun...which we can clearly measure. that's why Copernicus matters so much to Planet Peon...he got a lot of things wrong...but he got one VERY important thing right. The Sun is FRIGGIN' HUGE. And we are...a thousand years later...and we still don't "get it." All the energy we need is literally being given to us free everyday. But some hopeless corrupt convoluted dipshit "really is gonna succeed at putting the genie back in the bottle." Good luck...'s_Canon

Al Gorerhythm's picture

Either you're stoned, I'm stoned, or you stopped one with your head. WTF are you on about? Seriously, I'd like to know.

Son of Captain Nemo's picture

Just proves that times haven't changed.  Copernicus had to stay one step ahead of the banking establishment if he wanted to keep receiving a steady paycheck!

Which is probably why scientists and engineers that don't commit fraud in there occupations like some we know in the 21st Century, are always the most sincere and have the best ideas most important among them on stable money so that they can continue to do the pioneering work they do for a living in the interest of humanity -rather than on behalf of religious leaders, sovereign king or military zealots.

AUD's picture

Scientists don't - generally - commit fraud because they don't deal in 'money' & so don't have the ability to influence the behaviour of others. You don't get a blowjob for elucidating the genome of a bacteria.

Scientists do sometimes commit fraud if there's money in it though, like a juicy government grant.

Clowns on Acid's picture

Oh ya mean like Global Warming..... with payments from Al Gore?

Vidar's picture

Rothbard mentions Copernicus' work in his "Economic Thought Before Adam Smith", in chapter 5, page 165 of the 2006 edition:


"Copernicus turned his attention to monetary affairs when King Sigismund
I of Poland asked him to offer proposals for reform of the tangled currency of
the area. Since the 1460s, Prussian Poland, where Copernicus lived, was the
home of three different currencies: that of Royal Prussia, the Polish kingdom
itself, and that of Prussia of the Teutonic Order. None of the governments
maintained a single standard of weight. The Teutonic Order, in particular,
kept debasing and circulating cheaper money. Copernicus finished his paper
in 1517, and it was delivered to the Royal Prussian Assembly in 1522, and
published four years later.
Copernicus' proposals were not adopted, but the resulting booklet, Monetae
cudendae ratio (1526) made important contributions to monetary thought. In
the first place, Copernicus strengthened the exposition of 'Gresham's law'
first set forth by Nicole Oresme a century and a half earlier. Like Oresme he
began with the insight that money is a measure of common market value. He
then proceeded to show that, if its value is fixed by the state, money fixed
artificially cheaply will tend to drive out the dearer. Thus Copernicus declared
that it is impossible for good full-weighted coin and base and degraded
coin to circulate together; that all the good coin is hoarded, melted down or
exported; and the degraded coin alone remains in circulation. He also pointed
out that in theory the government could keep adjusting the legal values of
two moneys in accordance with fluctuating market values, but that in practice,
the government would find this too complex a task.
In the course of his discussion, Copernicus also became the first person to
set forth clearly the 'quantity theory of money', the theory that prices vary
directly with the supply of money in the society. He did so 30 years before
Azpilcueta Navarrus, and without the stimulus of an inflationary influx of
specie from the New World to stimulate his thinking on the subject. Copernicus
was still being a theorist par excellence. The causal chain began with debasement,
which raised the quantity of the money supply, which in turn raised
prices. The supply of money, he pointed out, is the major determinant of
prices. 'We in our sluggishness', he maintained, 'do not realize that the
dearness of everything is the result of the cheapness of money. For prices
increase and decrease according to the condition of the money.' 'An excessive
quantity of money', he opined, 'should be avoided.'"

So this was know to real scholars for some time.

Gromit's picture

@ Vidar  .....too complex a task"....  Yes, Christina Fernandez de Kirchner is finding this out in Argentina today. The official exchange rate is 6.48 to the dollar, the "blue" rate is 9.99.

Good for Argentinians and foreginers who can source dollars - great time to visit Argentina!


proLiberty's picture

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

From the last two paragraphs of Gold and Economic Freedom by Alan Greenspan. 1966.


StormShadow's picture

Great post. Yes, Greenspan was a gold bug back when he was still Anakin Skywalker, before the Dark Side overtook him.

I wonder how much gold even someone like Bernanke and others of his ilk personally hold. Something tells me it s significant.

dick cheneys ghost's picture

"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance."

President James Madison

Radical Marijuana's picture

dcg, last time you quoted that,

this was pointed out by a ZHer:


"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling the money and its issuance." was from Olive Cushing Dwinell (1946). The Story of Our Money. Boston, Massachusetts: Meador Publishing Company. p. 71. This is in an author's note following a quote by Alexander Hamilton. After the author's note there is the sentence "From Writings of Madison, previously quoted. Vol. 2, Page 14." This is apparently an editor's error since the note is clearly Dwinell's.

Of course, despite that misattribution, the statement is CORRECT!

dark pools of soros's picture

and yet a lot of ZH'ers hate bitcoin which takes the control and issuance away from government...  fools..  their gold has been controlled and they pout and do nothng



Tinky's picture

Ironically, you are the one who is being both petulant and dense. "A lot of ZH'ers" remain skeptical of Bitcoin's long-term viability, while fully appreciating the theoretical value of what it is (purportedly) attempting to accomplish.

In other words, very few if any ZH Bitcoin skeptics "hate" it; they simply aren't convinced that it is either trustworthy and/or a wise investment at this still relatively early stage of its development.

If you'd bother to take a step back and review the Bitcoin dialogues on ZH, what you'd find is that, predictably, shrill and/or hyperbolic BC proponents such as fonestar and yourself actually undermine the potential for thoughtful dialogue, and as a result degrade any promotional efforts. The contributor seek, in stark contrast, refrains from launching ignorant attacks on those who disagree with him, while patiently and articulately explaining why he believes BC to be promising, and how it works. That is effective promotion.


Racer's picture

We have SatansEcho to follow the ChairSatan,

Ummm, I am a bit over-adrenalised right now, I need help, someone, anyone...

bobert's picture

Maybe she'll become enlightened and your worries will be over.

el Gallinazo's picture

Not very likely.  It only happened once in the last century - JFK.  But the banksters have ways of dealing with a politician they select who goes "rogue" and takes his oath to the people seriously.

J S Bach's picture

Is the writer of this article really that stupid that he puts forth at the end...


"Madame Yellen?  Whether one follows Keynes or Copernicus … it is time to return to the principle of meticulous monetary integrity — as exemplified by the classical gold standard — to restore legitimacy both to to the social order and to government."

C'mon, man.  Yellen, Bernanke, Greenspan, ad infinitum... are all part of that diabolical .01% who KNOW all of these truths.  They are put into their positions precisely BECAUSE they know.  They are in on the fix.  Soulless usurers who, for millenia, have been bilking the sheeple when and wherever possible.

And this part - " restore legitimacy both to to the social order and to government."

The only way they can do this is by abolishing the Fed and returning to non-debt-based currency.  Do you really think anyone nominated is going to actually suggest that?!

Wake up.

Rafferty's picture

Don't talk to me like that.....I've woken up.  Only problem is that I was nearly forty years too late,

A Lunatic's picture

Just say no MOAR.........

I Write Code's picture

People have been debasing currency about as long as there has been currency, it was no great insight by Copernicus (or Keynes) but a standard lesson of Roman history, among other things.

These days we like a little inflation, we'll take a little blue pill if we have to.  We like a little debasement, too, or at least The Bernank gotta have some whatever comes after.  Or take the Rose Parade, please:

nmewn's picture

Currency debasement is as old as currency itself, the first users of any "new money" always make out like the bandits they are. They are the elite & the privileged (from politicians & bureacurats to their cronies). The losers are always the savers, the workers & the poor...the last to touch "new money".

There is a lesson in there...but I won't destroy an otherwise good thread to bing it up ;-)

q99x2's picture

Out of respect for the position of Federal Reserve Chairperson you should always refer to them as Pedophile Ben Bernanke or Pedophile Janet Yellen--just to be clear.

DOGGONE's picture

Look at the severe deceptions by omission done to the people!
This status quo is INDEFENSIBLE, by any/all of the following:
Financial sector
Holders of elected office

The public seeks leadership, but they beget leadershit.
Remember that line, something like "He is a good guy, except when it comes to money."

ozzzo's picture

I was on board until the last sentence. Restore legitimacy to government? You should have stopped at "In a word, yes.'

Dewey Cheatum Howe's picture

off topic but of interest.

Record High in U.S. Say Big Government Greatest Threat Now 72% say it is greater threat than big business or big labor


The prior high for big government was 65% in 1999 and 2000. Big government has always topped big business and big labor, including in the initial asking in 1965, but just 35% named it at that time.


Peter Pan's picture

Paper gold is the equivalent of buying a time share apartment in the belief that you are buying freehold. Fiat is much the same thanks to the fractional reserve banking and the government's proclivity in producing more of it through debt creation.

By the way, I found the follwoing piece written by Keynes in 1933 quite intriguing: