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In September 1936, British economist John Maynard Keynes, whose ideas had been credited as behind US president Franklin Roosevelt's New Deal, prepared a preface for the German translation of his book, The General Theory of Employment, Interest and Money. Addressing a readership of German economists, Keynes wrote: "The theory of aggregate production, which is the point of the following book, nevertheless can be much easier adapted to the conditions of a totalitarian state, than ... under conditions of free competition and a large degree of laissez-faire. This is one of the reasons that [justify] the fact that I call my theory a general theory. Although I have, after all, worked it out with a view to the conditions prevailing in the Anglo-Saxon countries where a large degree of laissez-faire still prevails, nevertheless it remains applicable to situations in which state management is more pronounced." Keynes clearly understood that the greater the degree of state control over any economy, the easier it would be for the government to manage the levers of monetary and fiscal policy to manipulate macroeconomic aggregates of total output, total employment, and the general price and wage levels for purposes of moving the overall economy into directions more to the economic-policy analyst's liking.


 Neo-liberal economists everywhere seven decades later have yet to acknowledge that employment is all that counts and living wages are the key to national prosperity.

so even a creep like hitler understood economics and finance better than the ECB?

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Thu Jun 2nd, 2011 at 08:56:44 PM EST
[ Parent ]
One of my currently favourite quotes: from Political Aspects of Full Employment (Michal Kalecki 1943)
One of the important functions of fascism, as typified by the Nazi system, was to remove capitalist objections to full employment.

The dislike of government spending policy as such is overcome under fascism by the fact that the state machinery is under the direct control of a partnership of big business with fascism.  The necessity for the myth of 'sound finance', which served to prevent the government from offsetting a confidence crisis by spending, is removed.  In a democracy, one does not know what the next government will be like.  Under fascism there is no next government.

The dislike of government spending, whether on public investment or consumption, is overcome by concentrating government expenditure on armaments.  Finally, 'discipline in the factories' and 'political stability' under full employment are maintained by the 'new order', which ranges from suppression of the trade unions to the concentration camp.  Political pressure replaces the economic pressure of unemployment.

When neoliberals look at this, they conclude that Keynesianism causes totalitarianism, as did Hayek in The Road to Serfdom.
Significantly, Hayek challenged the general view among British academics that fascism was a capitalist reaction against socialism, instead arguing that fascism and socialism had common roots in central economic planning and the power of the state over the individual.

Economics is politics by other means
by Carrie (migeru at eurotrib dot com) on Fri Jun 3rd, 2011 at 02:38:53 AM EST
[ Parent ]
See This thread on 3rd Reich monetary policy.

Economics is politics by other means
by Carrie (migeru at eurotrib dot com) on Fri Jun 3rd, 2011 at 02:44:26 AM EST
[ Parent ]


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