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Jewish World Review Dec. 21, 2000/ 24 Kislev, 5761

Samuel Silver

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In the long run, we are all dead --- NOT! -- In the long run, we are all dead! This statement by English economist John Maynard Keynes (1883-1946) is one of the most popular, but misleading, erroneous and dangerous ideas of the 20th Century. Many observers have attributed the hedonistic individualism of the 1960’s, and its resultant damage to the traditional Judeo-Christian family, to the threat of nuclear disaster. Its real basis may also be linked to Keynes. Jewish tradition, however, explains his error.

"Lord" Keynes was a major force in economics, whose ideas were the foundation of FDR’s New Deal in the 1930’s. His theories of "aggregate demand," eschewing of "savings," and use of government spending to "prime the pump" were the basis for FDR’s attempt to end the Great Depression. Economists and historians now know that both Keynes and FDR were wrong:

  • What might have been only a deep recession was driven into a long depression by government policies, not inherent flaws of Capitalism as Keynes and the New Dealers thought. The Great Depression, as proven by Nobel Prize winning economist Milton Friedman, actually resulted from terribly misguided monetary and fiscal decisions of the Federal Reserve and U.S. Government.

  • The Great Depression was not "cured" by the New Deal. It did not end until after World War II. The New Deal may have made people feel better, but it did not solve the economic problems of the Depression. In fact, recent research claims that the New Deal most likely prolonged the Depression.

It is disheartening that many, if not most, Americans are unaware of the economics and history of the Depression and still cling to Keynes’ and FDR’s false doctrines. Even today, his theories remain an integral part of the policies proposed by the Democratic Party. The Republicans have not been completely immune either, as Richard Nixon famously said, "Today, we are all Keynesians."

A major flaw in Keynes’ thinking was his concentration on the short-term. He thought that focus on the long run was utterly futile and one of the great mistakes in economics. He abhorred "savings," thought the "abstinence" of people impedes the growth of wealth, and believed savings are always a potential threat to economic progress.

Economist and journalist Henry Hazlitt summarized Keynes "General Theory" (Keynes’ most important work) as a "trans-valuation of all values. The greatest virtue is consumption, extravagance, and improvidence. The greatest vice in the "General Theory" is saving, thrift, and financial prudence."

And as management guru Peter Drucker stated, "Keynes is in large measure responsible for the extreme short-term focus of modern politics, of modern economics, and of modern business - the short-term focus that is now, with considerable justice, considered a major weakness of American policymakers, both in government and in business."

Why was Keynes so adamant in this belief?

In studies of Keynes’ life, the major hypothesis is that his focus on the short-term was based on his life as an active homosexual. Although married later in life, he remained childless. He never seemed to understand the importance of children and future generations to parents and their extended families.

Keynes’ biographer Robert Skidelsky said he had a life-long bias against long-term thinking. According to Keynes (in his sarcastically titled essay "Possibilities For Our Grandchildren"), an individual's concern for the future is a "disgusting morbidity," and a "semi-criminal, semi-pathological" propensity that should be treated as a mental disease. One of the greatest economists of the 20th Century, Joseph Schumpeter (1883-1950), noted the connection to Keynes’ "childless and essentially short run philosophy of life" when he said "for a person committed to homosexuality, who is without descendants, there is little for them to focus the future on."

Ironically, if Schumpeter made such a logical, but non-politically-correct, statement today, he would not receive tenure at most major universities in the U.S.

For parents holding traditional Judeo-Christian values, it is difficult to understand this short-term outlook. These parents not only sacrifice for their children today, but for their children’s futures. This is why the inheritance tax and demagogic political attacks on families’ desires to build and maintain wealth is so immoral. At its heart is the Keynesian short-term view of human life.

Links to further information:

Rabbi Daniel Lapin, President of Toward Tradition, is author of America's Real War. (Hardcover) and (Softcover)

The Mysteries of The Great Depression Finally Solved (Excellent short review)

Four Myths About America's Great Depression (More detailed analysis)

Drucker's Analysis of Schumpeter and Keynes

Milton Friedman on Keynes (Fairly technical)

Biography of Keynes (Encyclopedia Britannica)

This focus on the long run, based on concern for children and future generations, is likely an inherent part of human nature, and possibly derivable from a secular approach to universal ethics. Whether a purely secular ethics will result in a moral society over time is doubtful, but beyond the scope of this article. However, religious Jews (and Christians), desiring postulated guidance in these areas, look to the Torah (Bible) and the accumulated wisdom of our sages in interpreting human nature and our basis for a long-term outlook.

The Torah, aptly described by Rabbi Daniel Lapin as the "owner’s manual given to us by our manufacturer," does not think we are all dead in the long run. In Judaism, there is a belief in a World-to-Come (Olam Ha-Ba in Hebrew), however the main emphasis is on our deeds while living on this earth, where we can serve God directly through fulfillment of the divine commandments (mitzvos). There is no clear understanding in Judaism of the World-to-Come, and it is not specifically mentioned in the Five Books of Moses. It is almost as if the afterlife is an afterthought (pun intended). Our greatest philosopher, Maimonides (1135-1204), concluded that this concept, while a fundamental tenet of Judaism, is beyond human comprehension.

However, if we go back to the "owner’s manual," we can find a comprehensible explanation of the World-to-Come, albeit not the only or ultimate one. Judaism believes all human beings are born morally tabula rasa (with a clean slate), and we all have free will to morally choose between our good inclinations and evil inclinations. As Rabbi Lapin explains, the Torah seems to give specific commandments to guide us in resisting our naturally bad and sometimes animalistic inclinations - not so for our naturally occurring good inclinations. Consider the negative commandments against murder, theft, sexual immorality, animal cruelty, coveting, etc. and the positive commandments to take care of the poor, widows, and orphans. The Torah also teaches us to honor our parents, as we all have a natural tendency to rebel against them.

The Torah does not have to command us to protect our children, nor to work, save, and invest to provide for our children’s future, as that comes to us naturally. Although the Torah does not provide specific commandments for "honoring our children," it continually discusses relationships between parent and child, as well as past and future relationships with our forefathers and future generations.

Think of all the "begots" and detailing of the generations in the Five Books of Moses. G-d is telling us that the connections between past, present, and future generations are critical. This helps explain why societies based on Judeo-Christian values emphasize saving and investing for the future.

Other examples:

  • Seldom does the Torah provide specific rewards for the various commandments. But in the second paragraph of Judaism’s most basic prayer, the Shema (Deuteronomy 11:21), G-d tells us we should obey his commandments "In order to prolong your days and the days your children upon the land…"
  • In Deuteronomy 30:19, we are told "I have placed life and death before you, blessing and curse; and you shall choose life, so that you will live, you and your offspring..."
  • The Psalms, which are the basis for most Jewish prayers, frequently use the term "Dor V’Dor" ("from generation to generation")
  • Or from the Book of Proverbs (13:22): "A good man leaves an inheritance to his children’s children."

The World-to-Come may very well be our children and our children’s children.

No Lord Keynes: in the long run, we are not all dead!

Samuel Silver, a board member of Toward Tradition, writes from Greenville, Mississippi. Comment by clicking here.


12/12/00: Jesse Jackson predicts a "Civil Rights Explosion"
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10/31/00: The 'Gender Gap' explained: Robbing Peter & Paul to pay Mary!
09/05/00: Republican Inclusion: Truth or Illusion?

© 2000, Samuel Silver