Keynes at Harvard
From Worldview Weekend with Brannon Howse:
Guest: Dr. David Noebel
Description:
Brannon and Dr. Nobel describe Obama's Fabian socialism that is destroying America. Fabian socialists are in favor of world government so now we know why certain world leaders are talking about a world currency.
Why do Fabian socialists love John Maynard Keynes who founded Keynesian economics? Americans need to understand that this socialist, Keynes, believed the way to implement socialism was to grow debt, print money and inflate the currency in order create inflation in order to steal from the citizens without them knowing their property was being stolen.
Many members of the U.S. Congress agree with Keynesian economics which explains the financial mess in which we find ourselves. How many and what members of Congress belong to socialist organizations?
What universities in America have Fabian socialist clubs that have graduated many of America's leaders? What world leaders are Fabian socialists?
What is the Christian worldview for economics in contrast to Fabian socialism and Keynesian economics and much more.
This is a discussion about money which references Scripture and is addressed to Christians. Because the argument can be made from other starting points, the principles will stand for any thinking person, but the Scriptural basis will only be valid for those who hold Scripture to be the written word of God, as do I.
The Bible tells us that we must not use differing weights and measures because these are an abomination to God. With a little study we find that the use of differing weights and measures is a violation of the eighth commandment.
Exodus 20:15 “You shall not steal. NASB95
Let's begin by describing how one would use "differing weights and measures."
Imagine that I am a merchant who purchases grain from farmers. I own the baskets and the scales.
If my basket is marked as a bushel, but is actually a bit larger than a bushel, then you have to give me too much grain before I agree that you have supplied a bushel of grain.
If I were buying by weight, then I would have a metal disk that is marked one pound, but actually weighs more than one pound. With this setup, you have to put too much grain on the scale before I agree you have supplied a pound of grain.
In each case I will pay you as though you gave me one bushel or one pound..
In each case you will have given me more than one bushel or more than one pound.
You will have been cheated. After all, if the advantage were yours, it would be a gift, which I would want you to know about.
Following is Scripture which addresses this particular form of fraud and theft.
Leviticus 19:35 ‘You shall do no wrong in judgment, in measurement of weight, or capacity. NASB95
Deuteronomy 25:13-16 “You shall not have in your bag differing weights, a large and a small. “You shall not have in your house differing measures, a large and a small. “You shall have a full and just weight; you shall have a full and just measure, that your days may be prolonged in the land which the Lord your God gives you. “For everyone who does these things, everyone who acts unjustly is an abomination to the Lord your God. NASB95
Proverbs 11:1 A false balance is an abomination to the Lord, But a just weight is His delight. NASB95
Proverbs 20:10 Differing weights and differing measures, Both of them are abominable to the Lord. NASB95
Proverbs 20:23 Differing weights are an abomination to the Lord, And a false scale is not good. NASB95
Micah 6:11 “Can I justify wicked scales And a bag of deceptive weights? NASB95
Money and Differing Weights and Measures
There is a concept known as legal tender law which controls how we use money. Basically legal tender laws state that a certain money unit must be used and accepted at face value. (This is not good or right...)
So here is how this bit of positive law plays out:
Imagine that you have a gold coin which is marked "10" and was originally "coined" with ten units of gold having a given purity.
There are four basic things that can happen to this coin to change its gold content relative to the stamped or engraved quantity.
- It may be worn over time which is a natural process and which is harmless if the coin (more properly the unit of gold) is traded by weight.
(See Money and Scripture) - It may be clipped, which is to say a bit of the coin is scraped or shaved off and collected by the person doing the clipping.
- It may be diluted by melting the coin, mixing in a cheaper base metal and then recasting a new coin with less gold, but the same markings.
- It may be a consistent weight of gold, but be melted down and then given a larger nominal value stamped on the outside.
Now imagine that I owe you 1000 units of gold. I deliver to you 100 coins marked "10", but all of these coins have only 90% of the gold indicated by the markings.
By law you have to accept these coins as though I paid 1000 (100 X 10 = 1000) units of gold, when in fact I have only paid 900 (100 X 9 = 900) units of gold.
Fundamentally, what has happened is this:
The government has issued a decree that states the coins which contain nine units of gold actually have ten units of gold. In essence they have claimed to have created ex nihilo (from nothing) a unit of gold.
The government has decreed, with the stroke of a pen, the existence of an extra unit of gold.
Decree: an order, usually having the force of law
Anyone else would have to own property and operate a mine in order to bring new gold to market. The government simply decrees its existence.
The decree of gold by government is a critical point because in all cases fiat and fractional currencies depend, for their very existence, on an original commodity which was voluntarily accepted by the market for use in indirect exchange. The US Dollar began as 371.25 grains of fine silver and eventually was tied to gold. This tie was damaged in 1933 and broken in 1971. But the dollar could never have been introduced to market except by being relative in value to a natural money (like gold or silver) or something which ties historically back to a natural money.
The decree of gold by government is also a critical point because what is actually decreed is a quantity of natural money. This logic holds true all the way through today, in 2009, with fiat and fractional currency.
The government never decrees value of money tokens or even sound money (well, when they try the market smashes them in the ground and laughs). They can only decree quantity.
Decree of quantity affects value because of the law of supply and demand.
The greater a quantity of a commodity, the less valuable each unit is. Therefore by creating more units of money by decree, the value of each unit declines.
For a simple example, imagine the hottest toy with which you have ever had any experience. Maybe a few marbles or an X-Box. Without thinking about money or purchasing, imagine a room of 20 kids; in that setting three or four marbles or a couple of X-Boxes would be in high demand.
However, imagine if there were hundreds of thousands of marbles of all sizes or tens of thousands of X-Boxes. The same kids who would fight over one or two, in a room with thousands would go home happy while leaving nearly all of the excess units in the room.
As supply increases, the marginal value of each additional unit decreases.
Decree of Quantity
Therefore we can make some observations and draw some conclusions.
- Through inflation and bailouts, the government is decreeing a quantity of money tokens which tie back to gold, silver or some other commodity; i.e. natural money.
- By decreeing a quantity of money tokens, government is actually decreeing a quantity of natural money; i.e. decreeing gold or silver out of thin air.
- Commodity money provides a productivity filter, i.e. requires productive labor to be expended in order to introduce the commodity to market.
- Therefore the government is actually decreeing a quantity of productive labor. (See Purchasing Power and Productivity)
- Therefore the government is decreeing a particular kind of productive labor, i.e. profitable labor which produces more than it consumes.
- Therefore the government is, by decree, laying claim to the labor and creativity of the most productive members of society.
Summary
Natural money which actually exists provides, by its nature, a productivity filter. Government fraudulently claims to create, by decree, a quantity of natural money; however, only costless new money tokens are produced. Bypassing the productivity filter, this fraudulent costless money filters out loss and transfers only profits from producers to the favored groups who receive and use the additional quantity of costless money first.
(See The Purpose of Inflation)
Topic: Barack Obama is Destroying Our Economy on Purpose.
Text from Worldview Matters with Brannon Howse:
Description: A pair of radical Columbia University professors by the name of Richard Andrew Cloward and Frances Fox Piven wrote an article in the radical magazine known as The Nation. The article was published on May 2, 1966 and laid out what is now known as the "Cloward-Piven Strategy".
The plan calls for the destruction of capitalism in America by swelling the welfare rolls to the point of collapsing our economy and then implementing socialism by nationalizing many private institutions.
Cloward and Piven studied Saul Alinsky just like Hillary Clinton and President Obama. Listen as Brannon and his guest James Simpson explain how Cloward and Piven inspired the creation of ACORN that Obama worked for as a community organizer.
This interview must be e-mailed all over the country. Americans must awaken and understand the goal of these radicals and what is to come if they succeed. Time is of the essence. Obama is not over his head as some have claimed; he knows exactly what he is doing. Understand the Cloward-Piven Strategy, the rules of Saul Alinsky and their Cultural Marxist worldview and you will understand that what is occurring is not by mistake.
Can you imagine an exchange that does not have productivity mixed in?
I believe that it is impossible to have an exchange without productivity mixed in.
Net productivity may be consumed in the exchange or may be generated, but there is always productivity mixed in with any exchange.
Money is not a necessary ingredient in exchange.
Exchange can occur without money.
I will illustrate these points with a simple example.
Suppose you owned 100 train cars filled with gold. Let’s assume that the cars are secure and that people are willing to accept gold in exchange.
Could you purchase a hamburger with some of your abundant supply of gold?
The answer is a dependent yes. There is a prerequisite of productivity.
Someone must till the ground, plant wheat and make flour. Someone must raise and slaughter a steer to have the meat. Someone must plant a tomato and make ketchup. Someone must collect these and other related ingredients and resources into a single location and prepare the hamburger. And all of this has to happen in an environment that includes the producers being better off to exchange their product rather than keep it.
In addition, your gold would not have been secured, mined, refined, and aggregated unless someone engaged in productive labor.
Additionally, it is possible to exchange the makings of a hamburger for a quantity of fresh chicken eggs, instead of money.
Thus we see that productivity is a required component in exchange while money is optional. This is a critical point.
Think of costless money as a lazy and uninvited slob who barges in to your private dinner and forcibly takes the head seat at the table, demanding your honor and obedience.
Remember, the dinner cannot even occur unless gentle, honest productivity is at the table; perhaps this is productivity generated by the dinner party or perhaps captured by force. But always productivity will be present.
To be clear, money is not required at all. In addition to money not being required, unless it is honest money, money goes even further and steals from your productivity while giving nothing back.
Money gets up from the table, well fed by your labor, with your silverware in his pocket and various other articles openly picked up on the way out the door, all to be delivered back to his masters; masters who control his very existence by the stroke of a pen.
What does this mean?
If productivity is involved in every exchange and money is never necessary in any exchange then we can draw a few simple conclusions.
- Apart from Productivity, costless money will never feed even one person one meal.
- Productivity alone, without money, is capable of providing food, shelter and wealth.
- If a person were hungry or cold and had the choice of solving their problem by choosing one and only one of these two elements, then choosing a quantity of money without productivity would leave them in a worse condition, while choosing from a pool of productivity would enable them to be warm and well fed.
- In the case of a gift, the same holds true. If we give costless money apart from productivity, the recipient has nothing. If we give productivity apart from costless money, the recipient has a gift with usefulness and value.
Costless Paper Money
We see that gold apart from other productivity cannot provide anyone with a meal.
What about costless money?
Suppose in our nation there are 1,000,000 acres of farm land and 10,000 factories which produce our food and the products we value in exchange.
Now imagine that we print one trillion dollars.
Do we now suddenly have more acres of farm land? Do we now suddenly have more factories?
Someone may say, no, but with this new money, now we can build more factories!
Why can we? Will you build the factory with paper? Will you plant paper seeds in a paper field? No…? Then what do you mean?
I can only purchase more if I produce more things for which people are willing to exchange their own production. As we produce more and more efficiently, there will be a need for more acres and factories to engage in production. Increasing production requires real resources; bricks and steel, acres and seed - not paper.
All that costless money does is grant the first users of the New Money the fraudulent ability to lay claim to your productivity and property which they have not worked to acquire.
I could print money today and immediately acquire your entire year of production from your factory or farm, without doing anything productive myself. I would simply take your labor and property with the stroke of a pen.
The Keynesian monetary system we labor under does this every single day.
Government Stimulus
Since only productivity applied together with real resources can feed a person or increase one’s wealth, the only thing anyone can ever give in exchange for any other thing is productivity.
When the government issues new costless money into the system and the banking sector multiplies it yet again, the costless money only has value to the extent that productivity is absorbed into the costless money.
If we had trillions and trillions of dollars, but no one planted crops or made things, we would be a poor nation. Consider Zimbabwe. A few decades ago 1 Zim Dollar would buy as much as 1.47 US Dollars. Today it takes 37,456,777 Zim Dollars to equal 1 US Dollar.
Do big numbers on slips of paper make a nation wealthy? No. Impossible.
Therefore when the government prints costless money, your property and productivity are necessarily used to impute value to the new dollars, but someone else gets these "valuable" new tokens. They are worthless on their own account, apart from your labor.
Conclusion
The clear and logical economic arguments against the current stimulus and our monetary system in general are somewhat involved and will not be covered in this article. However, the point that we want to convey is this:
The only thing government can give away is productivity and since government produces nothing, they can only give away your hard earned and valuable productivity. Costless money is nothing except a tool to steal what belongs to you.
Furthermore, if we produce nothing then there is nothing to take and nothing to give away, regardless of how many money tokens are created. Again, observe Zimbabwe for an example.
The more we produce, the more the government has access to, which will be used to do the things government does best; destroy liberty and enslave people.
