I have talked about my proposed project, the Keynes project. Keynes was the most important economist of the 20th century. This is certainly not a radical view. He had greater influence than anybody else, although his book, The General Theory, (1936), has rarely been read, and even more rarely been understood.
Keynes was important, and remains important, primarily as a symbol. Those people who genuflect in his memory in fact do not understand his system. But they are filled with awe when they hear his name. In the same way that almost nobody has read Darwin's Origin of Species (1859) and The Descent of Man (1871), Darwin nevertheless occupies the same position. He is an icon. His name is supposed to invoke a kind of awe. To say that you are opposed to Darwin, as distinguished from being opposed to almost everything specific that he wrote, is an act of sacrilege. Much the same applies to Keynes.
The actual writings of Darwin and Keynes exercise little influence. But in their name, there are neo movements. These movements come in their respective names. The expositors apply a handful of principles that are associated with the name of each of these icons. These applications keep changing. These interpretations keep changing. But the movements still maintain allegiance to the memory of the icons.
This is also true of virtually all worldwide movements. The German sociologist Max Weber had a phrase to describe this: the routinization of charisma. A charismatic figure appears on the scene. He gathers followers. These followers are usually outside the mainstream. The followers build a movement in the name of the founder. Then the movement becomes bureaucratic. This is why there are priesthoods in all such movements. They may not be called priesthoods, but they function as priesthoods. They screen out unbelievers from believers. They provide positive sanctions for believers. They impose curses and negative sanctions on nonbelievers. They apply the principles of the bureaucracy, but always in the name of the charismatic founder. This is how all movements gain leverage in society. At the intersection of the founding principles and actual implementation, there needs to be a priesthood.
There was a time when Karl Marx served as such a figure. He was certainly a charismatic figure. He was bankrolled by Frederick Engels. But only about a dozen people attended his funeral in 1883. He was almost a forgotten figure. The only major Marxists had completely abandoned his fundamental principle: the religion of revolution. These followers were basically trade union promoters. They were called revisionists. They weren't revisionists. They had completely abandoned his position.
But then, without warning, Lenin appeared on the scene in the late 19th century. His big motivation was the fact that the Czarist government hanged his older brother for being part of a group that plotted to assassinate the Czar. He began reading Marx, but any resemblance between Marx's discussion of the socialist society that would lead to the communist society, when compared with Lenin's Soviet tyranny, was coincidental. It was all done in the name of Marx, but in fact Lenin improvised as he went along. Stalin did the same. It was all done in the name of Marx, and it surely was consistent with the socialist phase of Marxist revolution.
But today, the names of Marx, Lenin, and Stalin have been abandoned. Marxism has lost its mojo. That was because the Soviet Union collapsed in December 1991. The Western adherents to Marxism were in fact adherents to power in central planning. Their knowledge of the basics of Marxist theory was minimal. They never read Marx. But they thought of themselves as Marxist, because it was convenient to do so. It was considered avant-garde, even when the Marxist regime in the Soviet Union was a gerontocracy.
I wrote my first full book against Marx in 1968. I perceived Marx as an icon. When I wrote the book, he still was an icon. I decided to get to the heart of the matter: his religion of revolution. I refuted his basic revolutionary outlook. Then I added a section on Marxist economics, which was essentially an extension of the criticisms that had been brought against Marxist economics by Bohm-Bawerk in 1884. The criticisms were as accurate in 1884 as they are today. Marxist economics was incoherent and self-contradictory from day one. Yet his adherents would not admit this. They desperately attempted to defend his position, beginning in the early 20th century. But the system could not be defended. It was wrong. It was easily refuted. But people did not defend Marxism because of his economics. They held to it because they loved the idea of the exercise of power. Marx never talked about how the communist society would work after the socialist transition period. He never talked about the state. The state was to disappear. But it never did under those regimes that called themselves Communists.
The reason I wrote the book on Marx because I figured that, if I could refute Marx, I would refute all of the of pygmies that followed him, including Lenin and Stalin. If you refute the charismatic founder, you thereby refute the bureaucracy, or priesthood, that was established in the name of the founder. You don't have to answer every priest; you simply refute the founder.
THE KEYNES PROJECT
That was what I had in the back of my mind when I came up with the idea of the Keynes project. If you refute the founder, you have refuted all the priests who operate in his name. You don't have to refute every individual priest, because you have refuted the founder. Take down the founder, and you take down the priesthood. It saves time. It saves trouble. It allows you to focus. It allows you to specialize. It allows you to spend all of your time on the details of the founder's system.
You will be completely unsuccessful for as long as the priesthood still has legitimacy in the eyes of the intelligentsia. But if the founder's system is really incoherent and filled with logical flaws, then at some point the system built by the competing priesthoods in the name of the founder will collapse. The system will be shown to have been an illusion. The priests will not admit this, but that doesn't matter. The intelligentsia will drop it as if it were laced with anthrax. The moment it fails to deliver the goods, which means the moment it no longer delivers power into the hands of the priests and the acolytes, the intelligentsia will drop it. The intelligentsia is interested in power. Any system that does not bring power to the intelligentsia is not going to be accepted by the intelligentsia.
When Keynes' system of deficit spending funded by central banking finally leads to hyperinflation and national bankruptcy, or else leads to deflationary depression and national bankruptcy, the intelligentsia will drop Keynesianism. The politicians will also drop it. In the same way that they dropped Marx after December 1991, they will drop Keynes and Keynesianism. They will go in search of another worldview that also promises to deliver power in the hands of the intelligentsia and the politicians influenced by the intelligentsia.
What good does that do the defenders of limited civil government? This: if the intelligentsia goes down with the Keynesian ship, there will be a new intelligentsia. You don't try to refute the intelligentsia; you lay the foundation for replacing the intelligentsia. That is what the Keynes project is all about. Somebody should make his reputation by a line-by-line refutation of The General Theory, thereby refuting Samuelson and his epigones. This takes entrepreneurship. It takes enormous self-confidence. It takes the ability to write clearly. It takes the ability to interpret an incoherent document, point out that it is incoherent, and do so in such a way that an intelligent layman can follow the argument.
The idea here is to train a generation of intelligent layman, who will then become the next intelligentsia. It is a program of replacement. It is naïve to think that you're going to convert the existing intelligentsia. The intelligentsia want power, and the existing social, economic, and political system offers power to the intelligentsia. They are not going to abandon it. But if the economy goes down in a heap, then they will lose their legitimacy in the eyes of the younger members of the intelligentsia, who have not been locked into the system ideologically, and who will not have access to the levers of power unless they come up with a different outlook. There will have to be a new priesthood.
We don't know who the founder is going to be in the 21st century. But I can assure you that he will not be an extension of John Maynard Keynes. He will not be an extension of Karl Marx.
If the critic of Keynes could then add a comprehensive alternative to Keynes in a separate series of books, articles, videos, and workbooks, he could lay claim to the office of icon. But that would take a degree of academic entrepreneurship that very few people ever possess. Keynes had this sense of destiny. Hayek could have had it, but he didn't. He remained mute in the face of The General Theory. In doing, he walked away from the battle, and he walked away from an opportunity to become the new icon. For that matter, so did Mises. Mises had an operational alternative system, but he did not understand the necessity of a line-by-line refutation of Keynes. Mises never did this kind of grunt work. Hazlitt did, but Hazlitt was ignored. He did it too late: 1959. He should have done it in 1937.
Keynesianism has led to the creation of a house of cards. That house will eventually collapse. But there is no one waiting in the wings to replace him. There is no one who can claim with justification that he has completely answered Keynes, and has also laid down the foundations of an alternative system.
I had hoped to find someone about 30 years old who would be willing to put in 20 years on this project. But entrepreneurship is always in limited supply, and in academia, it has never been much more than a trickle. This would annoy me if I had had ever had even a smidgen of confidence that anything would come out of academia that would be world transforming. But I knew by the age of 18 that academia is basically a bureaucratic system created for the benefits of the time-servers who have tenure in the system. There is no way in the world that anything radical is going to come out of the realm of collegiate certification. Mises was correct in 1944: there are two systems of management. One is bureaucratic management; the other is profit management. Academia is based on the first model. Entrepreneurship is fundamental to the second model. Keynes was far more of an entrepreneur than he was an academician. He made a fortune as a commodities speculator. That was where his money came from; it did not come from his salary as a Cambridge professor.
There will be a new paradigm. Of this, we can be sure. Keynesianism will be replaced. I just don't know by what or when.
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