Keynes, the Great Depression, and the Coming Great Default

Power cedes nothing without a struggle; it never has and it never will.–Frederick Douglas 

We have entered, to reiterate by way of conclusion, a period of turbulence, upheavals, collapse of states, political vacuums, and prolonged conflict as we step into the unknown. We are headed toward the frightening dystopia portrayed in the classic film Bladerunner, in which the rich have ensconced themselves in mile-high citadels while the rest of humanity scrapes by on the brink of demise.

All social orders require legitimation. The legitimation of global capitalism rests fundamentally on the denial of the humanity of its billions of victims. Global capitalism seeks its legitimacy in countless ideological and cultural processes – through myths of democracy, liberty, equality, progress, growth, freedom, and so on, as well as through inverse constructs – the barbarity, irrationality, and inhumanity of those who refuse to acknowledge the legitimacy of the system.

               ==Global Capitalism and the Crisis of Humanity (William I. Robinson)

Excellent piece by the libertarian thinker Gary North–optimism after the pain. A process I agree with, but unfortunately believe the pain is going to last longer and be far more traumatic and bloody. We are in a phase of history that can only best be described as tectonic, a period of punctuated equilibrium that will lead to significant changes in the dynamics of our whole global civilization, let alone that of America’s. Getting across the ravine is going to be rather treacherous, to say the least.    

Ideas have consequences, but not in a social vacuum. There are no social vacuums.Ideas that are held by a minority of fringe academics or polemicists sometimes become the foundations of victorious social movements after existing social institutions are undermined by a social crisis.OPTIMISM AND SOCIAL REVOLUTIONThere seems to be an inherent optimism in the thinking of most members of the human race.

It is the source of men’s sacrifice in the present for the sake of the future. We think the future is going to get better, and therefore it is worth sacrificing present consumption for the sake of future consumption. This is the basis of thrift. This is the basis of expanded capital in our society.Basic to the success of every social revolution in the West since 1640 has been the doctrine of progress. Each revolution offers hope for the future. Usually, these have been short on details of the transition between now and the new utopia, but there is hope.The free market was such an idea. Adam Smith was the major promoter. His disciples extended his vision of the wealth of nations.

The timing was perfect: 1776. That was about the time that the Industrial Revolution began its transformation of the West and then the world.Beginning around 1800, and limited to the Eastern shore of the United States and the British Isles, compound economic growth began. By 1820, the economic transformation was leaving irrefutable historical evidence of this transformation. Economic historians debate as to the causes of this growth, but it had never been seen before. By 1850, the world was very different. A series of inventions transformed modern agriculture, modern transportation, and communications.

This was visible to everybody by 1851. That was the year of the great London exhibition. Anyone who attended that exhibition realized that the world had fundamentally changed since 1800.We are now over two centuries into this process. It is almost impossible for us to think of a society made up of human beings who are systematically pessimistic about the future. What began in the English-speaking world of the Atlantic Coast has now spread into the villages of India and China.

There is almost nowhere left on earth in which optimism regarding the economic future is not a fundamental presupposition of every village, every tribe, and every family. Economic reality finally caught up with human optimism, and then raced ahead.

[gview file=””]

Source: Keynes, the Great Depression, and the Coming Great Default