Economics, Not Shamanism!

par

Pascal Chevrier

Should we send your economics teacher to

Auschwitz?

Lyndon LaRouche vs. Abba Lerner

Dec. 2nd, 1971

Lerner:"Because I agree with what was done in Brazil, to check the inflation, it doesn't mean that I'm in favor of the fascist dictatorship which they have there."

LaRouche: "…no longer is economics merely a plaything of an obscure corner of the academic priesthood. Now economic policy is that which determines the lives, and daily lives and conditions of people. The form of economic policy, determines the kind of government, which is necessary to carry it out. And, the only kind of government which can carry out the kind of policy which Professor Lerner recommends ... would have to be a Bonapartist or fascist government."

Lerner: “But if Germany had accepted Schacht's policies, Hitler would not have been

necessary.”

LaRouche: "He may be opposed to fascism with every fiber of his being; this was also true in Germany, where many economists, liberal economists, proposed austerity, who also opposed the Nazi regime. But, nonetheless, there are men who will take up these policies and carry them out, and they will be Bonapartists or fascists; but not Professor Lerner. So, he must understand, that sometimes his good intentions do not ensure, that his policies, carried into practice, will work out as he sees them, in human terms."

And then…

Schacht, Keynes and Hitler: buddies ‘til the end

Adolf Hitler and Hjalmar Schacht

John Maynard Keynes

1937 German Preface to Keynes’ General Theory of Employment, Interest, and Money

``Thus I may perhaps expect to find less resistance among German readers than among English ones, when I put before them a theory of employment and production as a whole, which differs in important respects from orthodox traditions. But can I hope to overcome Germany's economic agnosticism? Can I convince German economists that methods of formal analysis can make an important contribution to the analysis of present-day events and the formulation of present policies? After all, it belongs to the German character to be fascinated by theories. How hungry and thirsty must German economists be, having gone for so many years without such a theory! It is certainly worthwhile for me to make an attempt. And if I can contribute some tidbits to a full meal, prepared and served by German economists and adapted to German conditions, then I will be content. For I must admit that much in the following book was written and illustrated in reference to the situation in Anglo-Saxon countries. Nevertheless, the theory of production as a whole, which is the object of this book, can be much better adapted to the conditions of a totalitarian state, than the theory of production and distribution of wealth under circumstances of free competition and a large measure of laissez-faire.'' (Emphasis added)

“After 1870 there was developed on a large scale an unprecedented situation, and the economic condition of Europe became during the next fifty years unstable and peculiar.... As numbers [of population] increased, food was actually easier to secure. Larger proportional returns from an increasing scale of production became true of agriculture as well as industry.... That happy age lost sight of a view of the world which filled with deep-seated melancholy the founders of our (the British) Political Economy. Before the eighteenth century mankind entertained no false hopes. To lay the illusions which grew popular at that age's latter end, Malthus disclosed a Devil. For half a century all serious economic writings held that Devil in clear prospect. For the next half century he was chained up and out of sight. Now perhaps we have loosed him again.” J.M.Keynes

Keynesian Economics and Eugenics:

“I do not depart from the old Malthusian conclusion ... I possessed all (Francis Galton's) books whilst I was still an undergraduate"... (the Malthusian theory was) ... "that more capital resources per head (chiefly in the shape of land) must be of immense benefit to the standard of life and that the growth of population was disastrous to human standards by retarding this increase.”(from the Galton Lecture by J.M. Keynes, "Some Economic Consequences of a Declining Population" 1937, reprinted in Eugenics Review. Vol. 60).

Eugenics and Sociology:

“The founder of the most important, significant and I would add, genuine branch of sociology which exists, namely eugenics ... (is Galton's) ... worthy and distinguished disciple, Carr Saunders ... Problems of Population [by Carr Saunders q.v.] ... essentially approached through the biological background of man ... and not principally through the economic approach.”From Keynes' speech, Feb. 1946 on presentation of Galton Medal to Carr Saunders q.v. (ER 1967, p. 5, Obit for A. Carr Saunders q.v.)

“Most richer countries today have an "independent" central bank--- that is, one which operates under rules designed to prevent political interference. (!!!)

Examples include the Bank of England, the Nederlandsche Bank, the Banco Central de Chile, the Reserve Bank of Australia, the Reserve Bank of India, the European Central Bank, the Bank of Canada, the Banco de la República de Colombia, Central Bank of Norway, State Bank of Pakistan and the U.S. Federal Reserve.

Some central banks are publicly-owned, and others are, in theory, privately-owned.” Dixit Wikipedia

Central Banking System

“The objective of such control is the restriction of spending on the part of the individuals, so that individuals spending will increase less rapidly than the quantity of money. Such a policy, if rigorously enforced, should restrain a rise in the price level. As indicated earlier, this policy appears to have been successful in Nazi Germany.”

Milton Friedman

…after reading Hayek's The Road to Serfdom Keynes said, “In my opinion it is a grand book ... Morally and philosophically I find myself in agreement with virtually the whole of it: and not only in agreement with it, but in deeply moved agreement.”

“We will benefit our fellomen the most if we are guided solely by the striving for gain. For this purpose we have to return to an automatic system, which brings us about self-directing automatic system which alone can restore liberty and prosperity. That is my fundamental conception.” Hayek in interview

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“Well, my dear Adeimantus, what is the nature of tyranny? It’s obvious, I suppose, that it arises out of democracy.”

“Yes.”“Then isn’t it true that tyranny arises out of democracy in the same sort of way that democracy arises out of oligarchy?”

“How do you mean?”“The main objective of oligarchy, for the sake of which it was established, was, I think we agreed, wealth.”

“Yes.”“And its fall was due to the excessive desire for wealth, which led to the neglect of all other considerations for the sake of making money.”

“True.”“Then does not democracy set itself an objective, and is not excessive desire for this its downfall?”

“And what is this objective?”“Liberty,” I said. “You must have heard it said that this is the greatest merit of a democratic society, and that for that reason it’s the only society fit for a free man to live in.”

“It’s certainly what they often say.”

Left vs. Right, anybody?

“Then, as I was saying, an excessive desire for liberty at the expense of everything else is what undermines democracy and leads to the demand for tyranny.”

“Explain.”“A democratic society in its thirst for liberty may fall under the influence of bad leaders, who intoxicate it with excessive quantities of the neat spirit; and then, unless the authorities are very mild and give it a lot of liberty, it will curse them for oligarchs and punish them.”

“That is just what a democracy does.”“It goes on to abuse as servile and contemptible those who obey the authorities and reserves its approval, in private life as well as public, for rulers who behave like subjects and subjects who behave like rulers. In such a society the principle of liberty is bound to go to extremes, is it not?”

“It certainly is.”“What is more,” I said, “it will permeate private life and in the end infect even the domestic animals with anarchy.”

“How do you mean?”“Well,” I said, “it becomes the thing for father and son to change roles, the father standing in awe of his son, and the son neither respecting nor fearing his parents, in order to assert what he calls his independence; and there’s no distinction between citizen and alien and foreigner.”

“Yes, these things do happen.”“They do,” I said, “and there are other more trivial things. The teacher fears and panders to his pupils, who in turn despise their teachers and attendants; and the young as a whole imitate their elders, argue with them and set themselves up against them, while their elders try to avoid the reputation of being disagreeable or strict by aping the young and mixing with them on terms of easy good fellowship.”

“All very true.”“The extreme of popular liberty is reached in this kind of society when slaves – male and female – have the same liberty as their owners – not to mention the complete equality and liberty in the relations between the sexes.”

“Let’s have the whole story while we’re at it, as Aeschylus says.”“Right,” I said; “you shall. You would never believe – unless you had seen it for yourself – how much more liberty the domestic animals have in a democracy. The dog comes to resemble its mistress, as the proverb has it, and the same is true of the horses and donkeys as well. They are in the habit of walking about the streets with a grand freedom, and bump into people they meet if they don’t get out of their way. Everything is full of this spirit of liberty.”

“You’re telling me!” he said. “I’ve often suffered from it on my way out of town.”

“What it all adds up to is this,” I said; “you find that the minds of the citizens become so sensitive that the least vestige of restraint is resented as intolerable, till finally, as you know, in their determination to have no master they disregard all laws, written or unwritten.”

“Yes, I know.”“Well, this is the root from which tyranny springs,” I said; “a fine and vigorous beginning.”

“Vigorous indeed; but what happens next?” he asked.“The same disease which afflicted and finally destroyed oligarchy afflicts democracy, in which it has more scope, still more virulently and enslaves it. Indeed, any extreme is liable to produce a violent reaction; this is as true of the weather and plants and animals as of political societies.”

“It’s what one would expect.”“So from an extreme of liberty one is likely to get, in the individual and in society, a reaction to an extreme of subjection.”

“Likely enough.”“And if that is so, we should expect tyranny to result from democracy, the most savage subjection from an excess of liberty.”

From Plato’s Republic, book IX

“…the validity of our estimable knowledge of the nature of our universe, is conditional upon the demonstration of the degree of man’s willful power to change that universe.”– Lyndon LaRouche, What is a Monad, January 2008