John Maynard Keynes (1883-1946) Fabian Socialism and Keynesian Economics

By Brannon S. Howse

John Maynard Keynes is likely the world’s best-known economist. Yet, Keynesian economics can be recognized by its values that are contrary to much of what makes for healthy financial living for individuals or nations—love of debt and hatred of savings. The wholesale implementation of his ideas caused the Great Depression to be much deeper and last much longer than was necessary. He believed that during an economic downturn or recession, government should borrow or inflate the currency and dump large amounts of cash into the economy by being the primary source of spending and employment. The end results are inflation and the devaluation of currency. 


A socialist, Keynes was a member of the British Fabian Society. Fabian Socialism was birthed in London in 1883 and is best defined as “desiring Socialism through evolution instead of revolution.” Many members of America’s two dominant political parties are committed to Keynesian economics, and many are likewise Fabians. 


The true goal of Fabian Socialism is not merely socialism but globalism. Fabianism dovetails well with corporate fascism, the merging of big government and big business. In my second book, published in 1995, I predicted that America would move toward corporate fascism rather quickly. We have, as you can see now, and the pace is increasing. 


Capitalistic Socialism?:


Humanist Richard Rorty picks up a Keynesian theme by arguing that traditional socialism will not work, but a form of government similar to corporate fascism—welfare-state capitalism—will do nicely:

"Most people on my side of this…cultural war have given up on socialism in light of the history of nationalization enterprises and central planning in Central and Eastern Europe. We are willing to grant that the welfare-state capitalism is the best we can hope for. Most of us who were brought up Trotskyite now feel forced to admit that Lenin and Trotsky did more harm than good."


Dr. David Noebel says this welfare-state capitalism is what we now call “interventionism”:

[quote] Rorty is suggesting that an interventionist approach to economics works best. Interventionism is not a totally state-planned economy nor a completely free market economy, but a combination of the two, where the state plays a role in redistributing wealth created in a partially or mostly free market environment.

In the end, Fabian Socialists don’t really want to own it if they can control it, and all they need to control it is a financial crisis that allows them to change laws, inflate the currency, and buy stock in corporations. Whether you call it nationalizing an industry or corporate fascism, the result is the same—the death of freedom and private property rights. [end quote]


John Strachey, a one-time Communist, entered the British Fabian Society in 1943 and become war minister in the Labor Government of Great Britain in 1950. He explains Keynesian economics this way:

[quote] The positive part of Keynes’ work was a demand that capitalism should now be regulated and controlled by a central authority….The principal instruments of its policy should be variations in the rate of interest, budgetary deficits and surpluses, public works and a redistribution of personal incomes in equalitarian direction. This positive side of Keynes’ work requires an authority to do the regulating, and that authority can be, in contemporary conditions, nothing else but the government of a nation state. [end quote]


Keynes himself admitted that by:


"…a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of wealth of their citizens. By this method, they not only confiscate, but confiscate arbitrarily: and while the process impoverishes many, it actually enriches some. The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose."


The American institution used to inflate our currency has been the Federal Reserve. While it has achieved that unspoken goal, the Federal Reserve has failed to accomplish what it was supposedly created to do. According to economics writer Walter Williams:

[quote] The justification for the Federal Reserve Act of 1913 was to prevent bank failure and maintain price stability. Simple before and after analysis demonstrates that the Federal Reserve Bank has been a failure. In the century before the Federal Reserve Act, wholesale prices fell by 6 percent; in the century after they rose by 1,300 percent. Maximum bank failures in one year before 1913 were 496 and afterward, 4,400. During the 1930s, inept money supply management by the Federal Reserve Bank was partially responsible for both the depth and duration of the Great Depression. [end quote] 


Many Warnings:


Americans cannot say they were never warned about the dangers of a central bank such as the Fed. As long ago as 1832, President Andrew Jackson worked to abolish the Bank of the United States, which operated much like today's Federal Reserve. In his farewell address, Jackson cautioned Americans never again to allow the creation of a central bank. Less than a century later, though, we ignored his warning and created the Federal Reserve System in 1913. I’ve noted below a portion of Jackson's farewell address. Read it, and see if it you don't agree with me that we are suffering the consequences of which he warned when our elected officials created the Federal Reserve and eventually ceased to back our currency by gold or silver:  


[quote] In reviewing the conflicts which have taken place between different interests in the United States and the policy pursued since the adoption of our present form of Government, we find nothing that has produced such deep-seated evil as the course of legislation in relation to the currency. The Constitution of the United States unquestionably intended to secure to the people a circulating medium of gold and silver. But the establishment of a national bank by Congress, with the privilege of issuing paper money receivable in the payment of the public dues, and the unfortunate course of legislation in the several States upon the same subject, drove from general circulation the constitutional currency and substituted one of paper in its place.

It was not easy for men engaged in the ordinary pursuits of business, whose attention had not been particularly drawn to the subject, to foresee all the consequences of a currency exclusively of paper, and we ought not on that account to be surprised at the facility with which laws were obtained to carry into effect the paper system. Honest and even enlightened men are sometimes misled by the specious and plausible statements of the designing. But experience has now proved the mischiefs and dangers of a paper currency, and it rests with you to determine whether the proper remedy shall be applied.

The paper system being founded on public confidence and having of itself no intrinsic value, it is liable to great and sudden fluctuations, thereby rendering property insecure and the wages of labor unsteady and uncertain. 

The corporations which create the paper money cannot be relied upon to keep the circulating medium uniform in amount. In times of prosperity, when confidence is high, they are tempted by the prospect of gain or by the influence of those who hope to profit by it to extend their issues of paper beyond the bounds of discretion and the reasonable demands of business; and when these issues have been pushed on from day to day, until public confidence is at length shaken, then a reaction takes place, and they immediately withdraw the credits they have given, suddenly curtail their issues, and produce an unexpected and ruinous contraction of the circulating medium, which is felt by the whole community. The banks by this means save themselves, and the mischievous consequences of their imprudence or cupidity are visited upon the public. Nor does the evil stop here. These ebbs and flows in the currency and these indiscreet extensions of credit naturally engender a spirit of speculation injurious to the habits and character of the people.

My humble efforts have not been spared during my administration of the Government to restore the constitutional currency of gold and silver, and something, I trust, has been done toward the accomplishment of this most desirable object; but enough yet remains to require all your energy and perseverance. The power, however, is in your hands, and the remedy must and will be applied if you determine upon it.

Our growth has been rapid beyond all former example in numbers, in wealth, in knowledge, and all the useful arts which contribute to the comforts and convenience of man, and from the earliest ages of history to the present day there never have been thirteen millions of people associated in one political body who enjoyed so much freedom and happiness as the people of these United States. You have no longer any cause to fear danger from abroad; your strength and power are well known throughout the civilized world, as well as the high and gallant bearing of your sons. It is from within, among yourselves-from cupidity, from corruption, from disappointed ambition and inordinate thirst for power-that factions will be formed and liberty endangered. It is against such designs, whatever disguise the actors may assume, that you have especially to guard yourselves. You have the highest of human trusts committed to your care. [end quote]



In March 2009, Dr. David Noebel, of Summit Ministries and frequent guest on my radio program, described Keynesian economics to my radio audience. Notice how much his warning sounds like that of President Jackson: 


[quote] Keynesianism, or interventionism, or socialism, is contrary to nearly every aspect of the Christian worldview in economics.  Today, Keynesianism is called interventionism.  Interventionism is where the government itself gets involved in the economic sphere and passes laws that destroy what we would call sound, basic economics. And what we had with Fannie Mae and Freddie Mac and the whole deal of going now into debt by trillions is nothing more or nothing less than Fabian, Keynesian economic philosophy. So this is what every Christian needs to get a handle on, Brannon, or we are finished as a nation.  Austrian economics was just basically classical economics. I mean, come on. For 6,000 years, the economics of the world was basically money, sound money. You've got to have something that you can judge by, and even though over the history of the world for the last 6,000 years we've tried various things, they always ended up with gold and silver as being the standard of money. And you could judge it. The dollar itself comes from the word thaler, which was a measurement of what an ounce of silver would entail, or a percentage of a gold piece would entail….in fact, the U.S. Constitution identifies money as gold and silver. [end quote]


Keynesian economics is unbiblical for many reasons, but even a quick reading of the Ten Commandments reveals two. The Commandments against stealing and coveting are broken when the government covets what you own and seeks to steal it from you through inflation. Further, in Deuteronomy 25:13-16 God declares His hatred of unjust weights and scales that are used to cheat people. Our government and the Federal Reserve use the “unjust weights and scales” of monetization (printing money) of our national debt to steal from Americans for the government’s self-serving financial gain and harvesting of power. 


Note, too, that according to the Bible, mere consumer confidence is not considered adequate backing for a currency. Haggai 2:8 proclaims, "The silver is mine, and the gold is mine, saith the LORD of hosts." Real wealth is not stored or found in paper but in gold and silver. 


Like so many other losers on our list, Keynes was also a blatant pervert. Zygmund Dobbs, who conducted research for the book Keynes at Harvard, describes Keynes and his socialist buddies this way: 


[quote] Singing the Red Flag, the highborn sons of the British upper-class lay on the carpeted floor spinning out socialist schemes in homosexual intermissions . . . .The attitude in such gatherings was anti-establishmentarian. To them the older generation was horribly out of date, even superfluous. The capitalist system was declared obsolete and revolution was proclaimed as the only solution. Christianity was pronounced an enemy force, and the worst sort of depravities were eulogized as 'that love which passes all Christian understanding.' Chief of this ring of homosexual revolutionaries was John Maynard Keynes. . . . Keynes was characterized by his male sweetheart, Lytton Strachey, as “a liberal and a sodomite, an atheist and a statistician.” His particular depravity was the sexual abuse of little boys. [quote] 


Joan Robinson, a Marxist economist who worked with Keynes, declared that “the differences between Marx and Keynes are only verbal.” I contend that many elected officials at the state and federal level are Fabian socialists committed to bring about a social revolution in America by deliberately creating an environment in which chaos and crisis can flourish for the purpose of bigger government—and to move us toward globalism.

Copyright 2009 ©Brannon Howse. This content is for Situation Room members and is not to be duplicated in any form or uploaded to other websites without the express written permission of Brannon Howse or his legally authorized representative.