Keynes (right) with Harry Dexter White
The volume of Keynesian and neo-Keynesian economic prescriptions churning out of the newspapers and talking heads on TV right now is a something to behold, ain't it? One shudders at the thought of the despondency that will greet the eventual failure of most of these remedies. We have a very unusual and in a basic sense unstable condition where the economic outlook is grim as grim can be, and yet there is an extraordinary outpouring of vague political hopes, much of the substance of which rests on a dubious foundation of Keynesian assumptions and platitudinous rhetoric.
But even leaving aside the specifics of the Keynesian prescriptions, I think it can be shown that they all participate in an error so fundamental as to undermine whatever merits they might otherwise possess.
In the Financial Times, though surrounded by some useful advice, we find this peculiar statement: “Keynes’s genius – a very English one – was to insist we should approach an economic system not as a morality play but as a technical challenge.” Here, concisely stated, is the error of modern economics, and indeed an aspect of the modern error itself.
Technical challenge drastically underestimates the character of what we face. It underestimates the character of what is called the economic system. It underestimates the nature of man.
It is common enough for modern man to assume that the technical characteristics of a thing amount to the whole. But this is an grave and crippling error.
There is so much more to it than that. The Keynesian may think he has captured “demand” or “consumer confidence” or any other of a thousand elements — captured and bound it neatly to a number in a statistical model. But even he, if pressed, would acknowledge the reality of things like psychology, fear, exuberance, etc — things outside the competence of statistical models, or at least incompletely assayed by models. So there is human psychology, which is not technical.
There is also the spiritual crisis of our age, which is about the farthest thing from technical. The spiritual crisis of modernity — that same streak of madness which shall insure that my generation is one of whom history will remember it invented the school-shooter, a peculiar and depraved innovation in suicide-murder — is quite real, despite the impotence of techincal analysis to explain it. Modernity imagined it could dislodge man from the foundations of his spiritual order and his moral framework, and go on his technical mastery alone, but it was a terrible error. It is an error many centuries in the making. A colossal and ruinous error.
The spiritual nature of man cannot be apprehended by numbers and technique alone. And the spiritual nature of man affects everything about him, even his economic systems.
But our dear Keynesians, like all those crippled by the modern error, have stifled their perception of the spiritual nature of man, on the grounds that it is fundamentally unreal. Man does not kill or steal or defraud, or race off, enraptured, in reckless speculation, because of his spiritual nature! There is no such thing as his spiritual nature. No, no: it's always the Technicals.
So the school-shooter or the thief or the high-finance charlatan is fundamentally an irresolvable puzzle to modern man. The depravity of man is not a feature of his technical appartus of explanation or analysis. And unless we want to hold the view that the economic crisis is quite unrelated to the spiritual crisis, we must say that the economic crisis will be fundamentally a puzzle to the Keynesian as well. All the technical expertise in the world will not enlighten him.
The causes of this economic crisis lie, at base, in those things this Financial Times writer has dismissed as a “morality play,” and Keynes is commonly thought to have dismissed with his quip we’re all dead in the long run. The causes cannot be spiritual, for if so then they must be fundamentally unreal in his mind. For him it is always a technical question. The great Technicals will save us, in golly good English fashion.
To hell with that premise. It's part of what got us here in the first place. The modern vision of man as always and ever driven by material factors — the doctrine that matter is all, or that matter is real and mind illusory, or that all mind is the mere epiphenomena of matter — is, as I say, a crippling error.
In truth man is a dualistic creature, matter and spirit, body and soul. In truth there is an objective moral order, conformity to which is a duty of that same man. His spiritual aspect or nature is quite real despite our general inability to quantify it, and sheer techne will never replace the moral arts or the science of theology. A man cannot leverage himself out of theft anymore than a Keynesian can save us by overcoming technical challenge.