If there ever was a scourge that came down upon humanity, it is the damage done by the policies of John Maynard Keynes. Although many have been taught to believe he is the greatest economist that ever lived, fact of the matter is that he designed an economic system that is an end in itself. Let's take a look at his system more closely.
There are two parts to it, first is plain and simple, obfuscated redistribution of wealth. The second is the means to the first, which is basically overworking and overproducing unnecessary stuff. The basic claim of the Keynesian system is that broken window fallacy is wrong, and that a broken window is in fact a good thing. Let's see what the fallacy is, and why it is supposedly not a fallacy at all.
Let's say you have a window. Keynesian argument is that it's good for someone to break it, because it will give someone else a job in fixing it. It looks pretty obvious at first why this is a fallacy, because it's an obvious waste of resources to rebuild something you already have. So instead of paying for that window you already had, you could have used that money on something else, say buying a new jacket.
Mr. Keynes and his followers claim that this is not the whole story. Because in times of recession, you may not have bought yourself a new jacket, but just held on to money in hopes you'll get more goods and services for it later in the day.
While this is essentially correct, it actually says that you having money in your pocket is a bad thing. That money should instead go to other people who need it more. In effect, it is simply an elaborate wealth redistribution scheme. As a matter of fact, a direct wealth redistribution actually makes more sense than Keynesian system. Because in a direct wealth redistribution system, you would be forced to give someone else a percentage of money you have with you. But unlike in a Keynesian system, that guy wouldn't have to spend any of his time to get it. So Keynesian economics won't just rob you of your money, it will also force some other guy to do completely unnecessary work to get it.
What this basically results in is overproduction. Instead of saving money and buying things we need, we are forced to spend the money and buy things we do not need, as inflation eats away at our savings and punishes us for not spending. Since most of the people are both producers and consumers of goods, it also forces us to do loads of irrelevant work for someone else who is paying for it just to prevent their money from melting away.
Back at the beginning of the 20th century, people were expecting we'll now be working for 4 hours a day tops, considering how most real necessities have been taken care of. But thanks to Mr. Keynes and his redistribution-overproduction combo, most people today spend best years of their lives sitting 8-12 hours a day in an office, doing useless cargo cult rituals over and over till they are pretty much ready for the grave. It's also likely one of the reasons why demography in the west has sunk to today's low and unsustainable levels.
It's basically a positive feedback loop, where employment requires higher taxes, higher taxes require people to do more working hours, people doing more working hours have less time to take care of the children, and ageing population requires more people to work for their sustainment.
A good way to solve the issue would be through dropping the Keynesian system alltogether, accepting the fact that recessions are an unfortunate part of life, and give people more time to enjoy their lives and spend time with their families. A bad way to solve the issue is to keep producing unwanted stuff and open the doors to massive 3rd world immigration hoping they will compensate for the lack of domestic workers. Sadly, the second solution has been chosen over the first.
Although I am perfectly aware people often suffer during recessions, a recession basically means that too many goods have been produced in a given time. The only sensible solution is to stop producing goods for a while, until they run out and become valuable again. Mr. Keynes' solution is to simply take away all the excess people have made in order to force them to create new excesses later on. And by taking away arbitrary amounts, no excess can really ever exist. The more people make, the more government can take away, either directly or by redirecting all that energy into building bridges to nowhere.
One more thing of interest is the fascination with GDP. Now, while the overall welfare of the population is paramount, GDP is really not the best way to measure it. All government investments are considered a part of the GDP. So by taking away money and time from people and forcing them to do useless things, GDP can go all the way to the moon. But that GDP benchmark is faulty, because it includes both the production of things people wanted and needed, as well as production of things that were made only because people were implicitly forced to make them. In other words, garbage.
So instead of living in a happy world with lots of leisure time, we live in a world where people are heavily taxed, work their asses off day and night, and a demographic catastrophe looms over our heads. A dream world perhaps, for a man who was at the time fascinated by communist economy. Pretty much a hell for everyone else.
There are two parts to it, first is plain and simple, obfuscated redistribution of wealth. The second is the means to the first, which is basically overworking and overproducing unnecessary stuff. The basic claim of the Keynesian system is that broken window fallacy is wrong, and that a broken window is in fact a good thing. Let's see what the fallacy is, and why it is supposedly not a fallacy at all.
Let's say you have a window. Keynesian argument is that it's good for someone to break it, because it will give someone else a job in fixing it. It looks pretty obvious at first why this is a fallacy, because it's an obvious waste of resources to rebuild something you already have. So instead of paying for that window you already had, you could have used that money on something else, say buying a new jacket.
Mr. Keynes and his followers claim that this is not the whole story. Because in times of recession, you may not have bought yourself a new jacket, but just held on to money in hopes you'll get more goods and services for it later in the day.
While this is essentially correct, it actually says that you having money in your pocket is a bad thing. That money should instead go to other people who need it more. In effect, it is simply an elaborate wealth redistribution scheme. As a matter of fact, a direct wealth redistribution actually makes more sense than Keynesian system. Because in a direct wealth redistribution system, you would be forced to give someone else a percentage of money you have with you. But unlike in a Keynesian system, that guy wouldn't have to spend any of his time to get it. So Keynesian economics won't just rob you of your money, it will also force some other guy to do completely unnecessary work to get it.
What this basically results in is overproduction. Instead of saving money and buying things we need, we are forced to spend the money and buy things we do not need, as inflation eats away at our savings and punishes us for not spending. Since most of the people are both producers and consumers of goods, it also forces us to do loads of irrelevant work for someone else who is paying for it just to prevent their money from melting away.
Back at the beginning of the 20th century, people were expecting we'll now be working for 4 hours a day tops, considering how most real necessities have been taken care of. But thanks to Mr. Keynes and his redistribution-overproduction combo, most people today spend best years of their lives sitting 8-12 hours a day in an office, doing useless cargo cult rituals over and over till they are pretty much ready for the grave. It's also likely one of the reasons why demography in the west has sunk to today's low and unsustainable levels.
It's basically a positive feedback loop, where employment requires higher taxes, higher taxes require people to do more working hours, people doing more working hours have less time to take care of the children, and ageing population requires more people to work for their sustainment.
A good way to solve the issue would be through dropping the Keynesian system alltogether, accepting the fact that recessions are an unfortunate part of life, and give people more time to enjoy their lives and spend time with their families. A bad way to solve the issue is to keep producing unwanted stuff and open the doors to massive 3rd world immigration hoping they will compensate for the lack of domestic workers. Sadly, the second solution has been chosen over the first.
Although I am perfectly aware people often suffer during recessions, a recession basically means that too many goods have been produced in a given time. The only sensible solution is to stop producing goods for a while, until they run out and become valuable again. Mr. Keynes' solution is to simply take away all the excess people have made in order to force them to create new excesses later on. And by taking away arbitrary amounts, no excess can really ever exist. The more people make, the more government can take away, either directly or by redirecting all that energy into building bridges to nowhere.
One more thing of interest is the fascination with GDP. Now, while the overall welfare of the population is paramount, GDP is really not the best way to measure it. All government investments are considered a part of the GDP. So by taking away money and time from people and forcing them to do useless things, GDP can go all the way to the moon. But that GDP benchmark is faulty, because it includes both the production of things people wanted and needed, as well as production of things that were made only because people were implicitly forced to make them. In other words, garbage.
So instead of living in a happy world with lots of leisure time, we live in a world where people are heavily taxed, work their asses off day and night, and a demographic catastrophe looms over our heads. A dream world perhaps, for a man who was at the time fascinated by communist economy. Pretty much a hell for everyone else.
No comments:
Post a Comment