John Maynard Keynes Quotes
There is no intrinsic reason for the scarcity of capital.
Keynes, John Maynard. The General Theory of Employment, Interest and Money. Macmillan, 1936, p. 376.
Mises defines government revenue in such a manner that it always relly belonged to individuals, therefore when government invests in enterprises that accumulate capital via profits, Mises does not consider it capital accumulation. One counterexample of this point is the George Washington Bridge in New York, built in Mises lifetime by Robert Moses of the New York Port Authority. The tolls on the bridge paid off the bondholders who financed much of the initial construction. But then capital started to accumulate at such a rapid rate that Moses was able to build other capital projects ranging from highways to the World Trade Center Buildings with capital constantly accumulated. The New York Port Authority under Moses generated more capital appreciation than any corporation that had been in existence at that point. And he could not even sell stock. However, the Port Authority and a few others were exceptions. Generally government did was unable to accumulate capital in its enterprises.
In 1964, after the newly elected Labour Government announced its new policies and budget, the financiers and speculators who control the international money markets thought the new budget and policies ill-advised. The made their concerns known to the Governor of the Bank of England who in turn recommended to the new Prime Minister that he cut the budget drastically and adopt a new more conservative set of economic policies. The Prime Minister was shocked that a non-elected small group of men—mostly not even British, were trying to reverse a set of policies that the voters in a democracy had elected. However, he was more shocked when he discovered that if he didn’t “obey” the financiers could act in concert, attack the British Pound, dramatically increase the interest rates the government would have to pay to borrow short term money, and ruin the British economy. Wilson had to comply. In America we refer to this situation more delicately by saying that “the markets will not react well to one proposal or another”. Our politicians intimidate themselves. The only way a democracy can really have control over its own policies and budgets, is to not be in debt to anyone.
After the Great Recession the Mexican bankers, like their American counterparts, tightened their credit standards so much that the only people who could get loans were the ones who didn’t need it. If banks do not make loans, it matters not that they are solid institutions that are well capitalized.
China was going though a major change of economic structure and national policy, moving to a Western style, capitalist, market economy. This was led by Zhao and Deng. However there were ensconced communist, Marxist idealogues still in place in the government, and a few of them were very vocal about their negative reaction to this abandonment of socialist principles. One economists who was particularly vocal was thus warned and reprimanded by Zhao. He got the message.
John Maynard Keynes, 1st Baron Keynes, CB, FBA (5 June 1883 – 21 April 1946), was an English economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in mathematics, he built on and greatly refined earlier work on the causes of business cycles. One of the most influential economists of the 20th century, he produced writings that are the basis for the school of thought known as Keynesian economics, and its various offshoots. His ideas, reformulated as New Keynesianism, are fundamental to mainstream macroeconomics.
