How the Bush Administration is Stealing Your Money - Hayek vs Keynes

Friedrich von Hayek
How the Bush Administration is Stealing Your Money - Hayek vs Keynes
NationBuilder, CO 9/17/08

Friedrich von Hayek represents the epitome of classical liberalism. While most Americans may be unfamiliar Hayek, his pioneering work in defense of free market capitalism won him the Nobel Prize in Economics and the Presidential Medal of Freedom.

Hayek was an influential member of the Austrian School of economic thought which was based on a strict methodological individualism. This essentially meant that individual action rather than collectivist thought was a philosophical foundation of good economic policy.

As Lehman Brothers, Merrill Lynch, AIG and soon Washington Mutual implode, the power of the main opponent of Friedrich von Haeyk's ideas gets more and more powerful. These are the ideas of John Maynard Keynes which enable the Federal Reserve Corporation to gain greater power and to globalize Economic Integration further creating more political unions and precursors to supranational states.


Harry Dexter White and John Maynard Keynes
Keynes ideas of "priming the pump" have accelerated the military industrial complex through Military Keynesianism. This allows for a self-sustaining market where the government increases the demand for military goods and services through spending more money. As an employer of last resort, the Keynesian Doctrine states that deficit spending in times of recession and unemployment will ultimately help the economy.

Thus by employing large armies in peacetime combined with the insatiable growth of defense budgets via unlimited government deficit spending results in a system that marches towards militarism. Military Keysenianism is based on Total War, constant war and never ending market growth in the defense sector that simultaneously drives regional integration and the creation of political unions.

The solution to saving the economy is implementation of the ideas of Friedrich von Hayek and the complete rejection and abolishment of Keynesian economics, which has empowered the government beyond Constitutional limitations and created a fascist state of corporatism that is destroying the foundation of the United States of America.

Military Keysenianism is personified by the Neoconservatives and the Bush Administration represents the most perverse and extreme version of Keysenianism ever theorized.

John McCain recently said we need a 9/11 Commission for the economy. This is absurd and a matter of cosmic irony considering the 9/11 Commission is the justification for Military Keysenianism. The resulting chaos in America, in Iraq and in the world is not an accident.

The chaos serves a purpose -- there is an underlying reason for its existence. It is the centralization of power, the growth of collectivism, which was institutionalized via Béla Balassa's Theory of Economic Integration.

As Nicholas Murray Butler noted, the greatest opportunity for change is war and chaos.

Milton Friedman agreed:

Only a crisis, real or perceived, produces real change. When that crisis occurs, the change depends on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.

Keynes on Hayek's The Road to Serfdom:

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.
...

What we need therefore, in my opinion, is not a change in our economic programmes, which would only lead in practice to disillusion with the results of your philosophy; but perhaps even the contrary, namely, an enlargement of them. Your greatest danger is the probable practical failure of the application of your philosophy in the United States.

Keynes to Hayek on if deficit spending could save a country from depression:

I should... conclude rather differently. I should say that what we want is not no planning, or even less planning, indeed I should say we almost certainly want more.

But the planning should take place in a community in which as many people as possible, both leaders and followers wholly share your own moral position. Moderate planning will be safe enough if those carrying it out are rightly oriented in their own minds and hearts to the moral issue. This is in fact already true of some of them.

But the curse is that there is also an important section who could be said to want planning not in order to enjoy its fruits but because morally they hold ideas exactly the opposite of yours, and wish to serve not God but the devil.

Hayek explained the first section of the letter saying:

...because Keynes believed that he was fundamentally still a classical English liberal and wasn't quite aware of how far he had moved away from it. His basic ideas were still those of individual freedom. He did not think systematically enough to see the conflicts.

On inflation, Keynes wrote in The Economic Consequences of the Peace:

Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.

...

Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.