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Keynesian Economics

In our last post, we focused on the area of study known as Economics, within our general theme of Visibilium Omnium, et Invisibilium. Today we continue our discussion of this specific academic discipline. In today’s post, we again drill down into a subdivision of the “dismal science” commonly referred to as “money and banking” and focus on one of its specialty areas, i.e. “monetary policy”.

In our last post titled Money and Rome (see here), we presented an infographic about how the Roman Empire was brought to the state of collapse in large part due to faulty monetary policy. A quick review, the Roman emperors needed to maintain standing armies and provide goods and services to their domestic population. They resorted to “devaluing” their money (monetary base) in order to satisfy these needs. And needless to say, this did not end well.

Today we fast forward by 1,500 years and observe that those same mistakes were repeated at the beginning of the XXth century. These experiments likewise did not end well, resulting in the prolongation of the Great Depression and culminating in the Second World War. Furthermore, in the XXth century, this “monetary policy” based on the devaluation of money (currencies) was given a name: Keynesian Economics.

Furthermore, fallen human nature being what it is, these same mistakes are being repeated even today. And not just in the area of monetary policy.

If we consider that “devaluation” is in essence nothing more than “corruption” as in something that has been changed from its original form”, in the case of money, “changed from its original value”, we can observe this phenomenon in other areas of human activities.

One example of “corruption” can be the corruption of our legal system brought about by activist judges, while a second example can be the corruption of the Catholic liturgy by the neo-modernist post conciliar “theologians”.

One explanation for why mistakes with respect to “monetary policy” or Catholic theology for that matter, are being made is that the recommendations that flow from these false theories are easy and convenient.

A good example of just this can be observed in the John Lamont essay titled Attacks on Thomism (see here) which we feature regularly on this blog. Addressing the CORRUPTION of the neo-modernists with respect to the philosophical base of Catholic theology, Mr Lamont made the following observation:

Another article of the postconciliar creed has to do with the character of the Thomism that was promoted by popes from Leo XIII to Pius XII. The substantive accusations made against this Thomism are that it unjustifiably limited theology to a particular philosophical system, that theology was forced to conform to it, and that it was not the true thought of St. Thomas. These claims play a subordinate role in the criticism of preconciliar Thomism, whose main thrust lies in accusations that Thomism was ‘abstract’, ‘rationalist’, ‘ahistorical’, ‘arid’, ‘frozen’, ‘immobile’, ‘obsessed’, ‘encouraging pure secularity’, ‘sclerotically hardened and furred theologically, spiritually and ecclesially’, ‘causing a rupture between theology and life’, a ‘wax mask’, a ‘straightjacket’ that ‘reduced theological speculation to sterility’.

Sound familiar? (see here)

However, the fact of the matter is that the above criticisms can be easily debunked. The true nature of the problem lies somewhere else. Here is what Mr. Lamont writes:

Thomism made an easy target for this propaganda, just because it is a highly developed philosophy. Any advanced field of study, such as philosophy, mathematics, or physics, can be convincingly portrayed as ‘arid’ and ‘rigid’. For most people’s tastes, this portrayal will often be true. Precise and rigorous subjects inevitably have arid components. Because it deals with fundamental questions whose answers are true always and everywhere, philosophy will be ‘ahistorical’ and ‘immutable’. It will not meet the desires and expectations of individuals or societies, because these desires and expectations are never geared towards subtle and difficult concepts. It will meet their needs – if it is true. But a demonstration of philosophical truth is a feeble counter to propaganda.

In other words, Thomism which is a “highly developed philosophy” is neither easy nor is it convenient.

Furthermore, being easy and convenient has very little if anything to do with the precept for why humans exist in the first place, as per Baltimore catechism, i.e.

“God made man to know Him, to love Him, and to serve Him in this world, and to be happy with Him forever in heaven.”

The operative bit is the “to know Him” here.

The same situation can be inferred from the linked post titled The Follies and Fallacies of Keynesian Economics (see here) regarding the corruption of monetary policy. What we see in this article is the parallel case for the John Lamont observations which I have reposted above. With respect to the parallels between Keynesians and neo-modernists, we can read the following:

Keynes believed not only that the market economy could not keep itself on an even keel he also believed that it would be undesirable to allow the market to work. He once said that to have the market determine prices and wages to balance supply and demand was to submit society to a cruel and unjust “economic juggernaut.” Instead, he wanted wages and prices to be politically fixed on the basis of “what is ‘fair’ and ‘reasonable’ as between the [social] classes.”

 And why did this view prevail over the last 80 years?

In addition, when the balanced-budget rule was overthrown there was no longer any check on government spending. As economists, James M. Buchanan, and Richard E. Wagner pointed out in Democracy in Deficit (1977), once government is freed from the restraint of making taxpayers directly and immediately pay for what it spends, every conceivable special-interest group can appeal to the politicians to feed their wants. The politicians, desiring votes and campaign contributions, happily offer to satisfy the gluttony of these favored groups. At the same time, the taxpayers easily fall prey to the delusion that government can give something for nothing to virtually everyone at no or little cost to them.

 In other words, Keynesian Economics satisfied the easy and convenient test.

Concluding, the reason that I provided the above “monetary policy’ example is to illustrate a point. The point being this: due to man’s fallen nature, he tends to “gravitate” toward solutions which are easy and convenient.

From the above text, one can also observe that the continuous re-emergence of “monetary debasement” throughout the different centuries, as a policy tool is the antithesis of that which we know from our endeavors pertaining to the quest for “knowing God”, as per Baltimore catechism. The proof is that whenever this false thesis has been tried, it has miserable failed.

Furthermore, from the above text one can also observe the continuous re-emergence of “monetary debasement” is grounded in the same ROOT CAUSE as is the debasement of Catholic theology. The ROOT CAUSE is that both these false theses are easy and convenient.The John Lamont essay bears this out entirely.

Which brings me to why I am bringing this to your attention dear reader.

It appears to me, that if one wanted to distill the essence of what constitutes the personal teaching office of the current bishop of Rome, Francis, it is that what Francis teaches is centered on that which is…

easy and convenient.

Nothing more, nothing less.

And unfortunately for Francis and his teaching office, that which is easy and convenient tends not to work. The devaluation of “Catholic theology” is meeting with the same results as those of the devaluation of the “monetary base” by the Roman emperors.

And it is visible for all to see!