The American Spectator : 'In the Long Run…'

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'In the Long Run…'

By Ken Blackwell on 12.18.09 @ 6:08AM

The Mugging of John Maynard Keynes, Democratic trillionaire.

John Maynard Keynes is considered one of the leading lights of liberal economics. Challenged by a critic who said that in the long run, Keynesian economics would lead to national bankruptcy, Keynes memorably responded with a witticism: "In the long run, we're all dead."

Lord Keynes -- has was ennobled for his service to the Liberal Party and the Asquith Government before and during and during World War I. Keynes attended the Paris Peace Conference in 1919 and left, disgusted, at what he saw as the vengeful attitude of the victors. His book, The Economic Consequences of the Peace, was widely read and helped contribute to the general view among the upper classes of Britain, Canada, and the U.S. that the allies' Treaty of Versailles had been too harsh toward defeated Germany and would lead to depression. Recent historians, including Margaret MacMillan, granddaughter of David Lloyd George, have pointed out that the Versailles Treaty of 1919 was certainly not as harsh as the Treaty of Brest-Litovsk, which the triumphant Germans had imposed on a prostrate Russia in 1918. Lloyd George had won a landslide election promising to squeeze defeated Germany "until the pips squeak."

But the Keynes view helped to de-legitimize the Versailles Treaty in the eyes of the chattering classes. It doubtless helped undergird the British desire to "appease" the Germans in the inter-war period of 1919-1939. Britain was far more willing to appease Germany than France had been.

When the Great Depression of 1929 crashed in on the world, Keynes was viewed as a prophet. Terms like "priming the pump" were a way in which liberal politicians like Franklin D. Roosevelt could explain Keynes' very complex and subtle theories of government-backed manipulation of the economy. Roosevelt's New Deal was essentially an exercise in using the federal government to spend our way out of the Depression. In fact, by 1936, unemployment in the U.S. had gone down, from 25% to 16%.

Conservatives counter that the natural cycle of recovery would have brought the U.S. out of the Great Depression anyway, and certainly a lot faster had Roosevelt's confiscatory taxation policies not suppressed business activity. FDR's National Recovery Administration (NRA) involved wage-and-price controls for many industries. Major portions of Roosevelt's New Deal were ruled unconstitutional by the conservative U.S. Supreme Court. America's real economic recovery would take off as arms production took off in the years from 1939 on. During World War II, Germany and Russia doubled their production, Japan and Britain trebled theirs, and the U.S. increased its output twenty-five fold!

Ronald Reagan was the classic anti-Keynesian. His policies stopped the "stagflation" (high unemployment, stagnant production, and hyper-inflation) in the 1980s and led to thirty years of solid prosperity. Reagan's policies owed more to Milton Friedman and other classical and neo-classical economists. Reagan focused on production, Keynes on consumption.

But Keynes' ideas never went away. They formed, and still form, the basis for liberal Democratic Party ideas. When the world economic shock of one year ago struck, liberals were primed to blame it on Reaganomics. The fact that the meltdown occurred in the sub-prime home mortgage industry, and that this sector had been heavily, heavily managed and manipulated by government policies, did not deter liberals from blaming the free market for the near-catastrophe. They raced to pump trillions into the banking industry and bailouts of "too big to fail" firms. And a lame-duck Bush administration tagged along with them.

Malcolm Muggeridge was a constant gadfly of British journalism. His late-in-life conversion to Catholicism sparked ridicule among the intelligentsia. They jibed that the notoriously philandering young Muggeridge had become "Saint Mugg" only after the flames of desire had burned out. Muggeridge gave us an incredible tribute called Something Beautiful for God, in which he brought to the world's attention the half century of sacrificial work of Mother Teresa of Calcutta.

Muggeridge the Christian believer lost none of his sharp tongue in his conversion. He once said that if there was a "silver lining" to the dark abortion cloud hanging over the world it was that in a hundred years there would be no more Sweden. Well, let us pray the Swedes, like Muggeridge himself, come around before it's too late.

Saint Mugg could skewer even so high a personage as Lord Keynes. When someone repeated to Muggeridge Keynes's famous dictum -- in the long run we're all dead -- Muggeridge shot back. "Well, he would think that wouldn't he? He was a predatory homosexual."

That line was considered below the belt. But there is more than an element of truth in it.

Conservatives are taught to think not only of ourselves, but of our children and of our children's children. Conservative philosopher Edmund Burke memorably described all society as a compact between the dead, the living, and the yet unborn. Keynesian economics is back in fashion in the U.S. and Britain today. Will it shackle future generations with a debt that cannot be borne, a debt that will suffocate all their hopes and aspirations? We are about to raise the debt ceiling to $13,900,000,000,000 or perhaps $14 trillion.

These numbers are really beyond comprehension. Former Ohio State University political science professor Phil Burgess says if we think of Nixon's resignation as a billion years ago, then a trillion years ago would be 31,000 B.C. Let's hope neo-Keynesian economics doesn't push us backward.

topics:
Deficits, Keynesian Economics, Malcolm Muggeridge

About the Author

Ken Blackwell, a board member of the Becket Fund for Religious Liberty, is a former U.S. ambassador to the United Nations Human Rights Commission and a senior fellow at the Family Research Council.

Letter to the Editor View all comments (59) | Leave a comment

TURK| 12.18.09 @ 8:25AM

Ken- I applaud your presence in the Conservative effort to right the ship of State. As a supporter for your run for Gov of Ohio, I look forward to your next effort. Like the socialists and worse in control for this moment, the RINO's you fought here, are on the run.

Never knew of your following the exploits of M Muggeridge. His discussions with Bill Buckley and his many written pieces contain much for Conservatives. I have a dog eared copy of his Jesus Rediscovered. It's my favorite!

Thanks for your important econ piece!

Greg| 12.18.09 @ 9:40AM

What does $1 Trillion look like??

It's amazing...simply amazing...

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Todd| 12.18.09 @ 9:53AM

What ever happened to Bob? Has he gotten tired of carrying water for Obama and his "brilliant" economics team? Good riddance if the pompous blowhard has gone elsewhere. It only makes sense that Keynes was a predatory homosexual as his economic theories are predatory and deeply immoral as well.

Jim Hlavac| 12.18.09 @ 5:10PM

I would note only that being homosexual is not an economic condition -- nor is it per se "predatory."
I would also point out that many a "predatory heterosexual" has absolutely no problem being rapacious socialists and "deeply immoral" as well.
Don't move your eye from the socialist in the parlor merely to worry about what the homosexual in his own bedroom might be doing.

Marc Jeric| 12.19.09 @ 6:20AM

Absolutely correct. Let nothing divert our attention from the ongoing attempts to communize America.

Chip| 12.19.09 @ 11:42AM

All of this would be tragic, if the neo-keynesians were simply mistaken. In fact, they understand perfectly what they are doing: acquiring power to sustain their rule. WWII interrupted Roosevelt's attempt, but his party has never abandoned the goal of socialism. They care not a whit about economic success, only their own.
I know, I know. I shouldn't question their motives. Well, it's too late for that. Look where they've taken everywhere they rule now. That's where they'll take us all if we let them.

Curtis| 12.20.09 @ 5:43AM

I find the liberals' love for Keynesian theory absolutely laughable considering the fact that they only understand the back half of it.

If Hoover had spent money like Roosevelt, Roosevelt wouldn't have had a dime to spend on the NRA or TVA. If Clinton and Dubya hadn't had spent like Roosevelt, Obama wouldn't be spending the last of our pennies in vain.

Proper Keynesian theory was supposed to call for fiscally conservative and responsible behavior during boom times. Balancing the budget AND paying down deficits.

But instead the liberals want to spend, spend, spend regardless of what the income situation looks like. Watching liberals and Rino's handling the budget reminds me of watching teenagers running up a debit card.

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FDR's National Recovery Administration (NRA) involved wage-and-price controls for many industries. Major portions of Roosevelt's New Deal were ruled unconstitutional by the conservative U.S. Supreme Court.

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Roosevelt's New Deal was essentially an exercise in using the federal government to spend our way out of the Depression.
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Proper Keynesian theory was supposed to call for fiscally conservative and responsible behavior during boom times. Balancing the budget AND paying down deficits.
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During his lifetime, John Maynard Keynes achieved fame as the world's foremost economist.
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Never knew of your following the exploits of M Muggeridge. His discussions with Bill Buckley and his many written pieces contain much for Conservatives.

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Luke| 2.8.10 @ 2:51PM

"But Keynes' ideas never went away. They formed, and still form, the basis for liberal Democratic Party ideas. When the world economic shock of one year ago struck, liberals were primed to blame it on Reaganomics."

Couldn't agree more with the above.

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Payton| 2.10.10 @ 8:44AM

Another well known economist, Allan Meltzer of Carnegie Mellon, believes team Obama has Keynes wrong- particularly on spending during a recession. What Keynes advises is to spend during the recession- but not run up a debt without a way cover it; a key point they've overlooked...

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David| 2.14.10 @ 5:20AM

John Maynard Keynes is considered one of the leading lights of liberal economics - yes he is, I agree with that, studying economics I now remember his name for the rest of my life :)
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I would note only that being homosexual is not an economic condition -- nor is it per se "predatory."

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Don't move your eye from the socialist in the parlor merely to worry about what the homosexual in his own bedroom might be doing.

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FDR's National Recovery Administration (NRA) involved wage-and-price controls for many industries. They took a good decision in doing that. Very nice article.

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FDR's National Recovery Administration (NRA) involved wage-and-price controls for many industries. They took a good decision in doing that. Very nice article.

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Marcus Cronate| 3.9.10 @ 7:06AM

Seriously, you want to go down that route? keynes was dodgy, of course he was everyone is a little bit! Let's all give up jobs and go on Caribbean Holidays

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They don't care about economic success, only their own.

I know. I shouldn't question their motives. Look where they've taken everywhere they rule now. That's where they'll take us all if we let them.

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