“The owl of Minerva flies only at dusk.” I came across that phrase many times over 45 years ago, when I was writing my first book, Marx’s Religion of Revolution (1968). (You can download it for free here.) What does it mean? Wikipedia explains.
The nineteenth-century idealist philosopher Georg Wilhelm Friedrich Hegel famously noted that “the owl of Minerva spreads its wings only with the falling of the dusk”–meaning that philosophy comes to understand a historical condition just as it passes away. Philosophy cannot be prescriptive because it understands only in hindsight.
“One more word about giving instruction as to what the world ought to be. Philosophy in any case always comes on the scene too late to give it… When philosophy paints its gloomy picture then a form of life has grown old. It cannot be rejuvenated by the gloomy picture, but only understood. Only when the dusk starts to fall does the owl of Minerva spread its wings and fly.” –G.W.F. Hegel, Philosophy of Right (1820), “Preface”
Keynesian ideas are dominant in government and academia today. Keynesianism is the owl of Minerva.
Keynesians think there will never be another Great Depression. They have faith in government deficits and central bank inflation. They’re wrong. Those who listen to them will get hammered during the Great Default, when the Federal Reserve ceases to inflate — as it will, either after mass inflation (likely) or hyperinflation.
In contrast, a lot of Tea Party members think the economy will collapse and wipe out everything for decades. They’re equally wrong.
THERE’S GOOD NEWS TONIGHT!”
The radio news commentator Gabriel Heatter used to begin every broadcast with that announcement, beginning in the late 1930s, when news was often bad. I can recall his introduction in the late 1940s, when news was mostly good. He is forgotten today, but he helped change America. An alcoholic, he introduced Americans to Alcoholics Anonymous in a broadcast in April 1939, four years after its founding. For him, withdrawal was very good news. It still is.
This report is about withdrawal and its aftermath.
The world is going through withdrawal. This began in late 1978 in China, when Deng freed up agriculture. That began the withdrawal from Marxist Communism. The USSR followed suit in December of 1991. The withdrawal from Fabian socialism began in earnest in India in the mid-1990s. These events have re-shaped the world. The aftermath has only just begun.
In China and India, the pain has been minimal. That is because the economic effects of the earlier systems created such devastation. Think of the phrase, “I’ve been down so long, it looks like up to me.” Think of China today and China in 1973 under Mao. The positive change has been greater than any seen in recorded history, and on a scale that was inconceivable in 1980. Every month, urban living space sufficient to house the population of Philadelphia gets built: 1.5 million people.
From 1945 until today, the American Right has decried Communism and Fabian socialism. Both are dead ideologies today. They have almost no defenders. Inside the elite, they have no defenders outside of English departments. Yet the reality of this overwhelming institutional and ideological victory has failed to register inside the Right.
One of the things which I do not understand is the appalling pessimism within the American Right. I realize that a lot of promoters are cashing in on this pessimism. They get rich by preaching that everything is going to hell in a handbasket. Everything is not going to hell in a handbasket. Communism and Fabian socialism went to hell in a handbasket. Keynesianism is going to hell in a handbasket. Liberty isn’t.
What we are seeing is the greatest triumph of free-market ideas in the history of man. I have lived through it, and I am telling you, we have never seen anything like what we are seeing today. With the collapse of the Soviet Union, and the reversal of socialist economics in China a decade earlier, we have seen the complete failure of the great alternatives institutionally to the free market economy. The only really systematically communist state left in the world is North Korea, and it is visibly the poorest country in Asia.
Around the world, millions of people are entering free markets. China has made the transition from total Communism to energetic mercantilism. China has entered the Keynesian world order. There is a mixture of mercantilism with Keynesianism in the West, so it is not just a Chinese problem. The state-owned enterprises in China are still a burden on the economy, but step-by-step, they will be abandoned. It is already happening.
(For the rest of my article, click the link.)