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The Koch Brothers’ Favorite Economist Moves to War Keynesianism.

Written by Gary North on June 18, 2014

Yesterday, I published an article on Tyler Cowen. I argued that he has gone Keynesian. This of course assumes that he was not previously a Keynesian.

Maybe you thought: “So what?” Today, I want to explain why this is significant.

Tyler Cowen is the director of the Mercatus Center of George Mason University.

The multi-billionaire industrialist Charles Koch is on the Board of Directors of the Mercatus Center.

The Kochs gave $3.7 million to the Center, 2007-2011. They are its major supporters.

I can understand why the Kochs gave $10 million to the Institute for Humane Studies. There are lots of non-Keynesian economists who could be funded through IHS. The founder of IHS, F. A. Harper, recruited me to Austrian economics in 1961. He did his best to see I would not go in a Keynesian direction — a possibility that never tempted me.

In the fall of 1962, Harper sent me a copy of Murray Rothbard’s masterpiece, Man, Economy, and State. Harper had arranged its publication through a subsidy to the publisher.

The Kochs have a reputation of being staunch libertarians. Then why fund an organization run by someone who believes that government spending on the military is a source of economic growth? This is Keynesianism, pure and simple. This is big government conservatism.

Keynesian economists get enough support from the Establishment. They provide the intellectual justification for the Establishment. They don’t need Koch money to get a hearing.

I don’t think the mainstream media have paid attention to what is going on here. Here is the mainstream media’s slant: “The Kochs’ are trying to take over the Republican Party. They are moving it toward pure, unadulterated libertarianism.” But politics is always a two-way street. It is about giving a little to get something. The fundamental premise of politics is the #1 premise of free market economics: “You can’t get something for nothing. There are no free lunches.” You go along to get along.

Mainstream Republicanism embraced the policies of war Keynesianism in the late 1940’s. This has long been the bipartisan position of the American Establishment. This is the “guns” side of “guns and butter” Keynesianism.

It is not libertarianism.

I have no connection to the Kochs. I do not know what motivates them. But I know this much: once political influence becomes someone’s motivation, non-ideological arrangements are usually close at behind.

When The New York Times publishes a war Keynesianism article by the Koch’s favorite economist, that deserves an article in The New York Times, or at least The Huffington Post. There is a story here.

Continue Reading on www.garynorth.com

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9 thoughts on “The Koch Brothers’ Favorite Economist Moves to War Keynesianism.

  1. I have a very simple answer to Gary North's characterization of politics as 'go along to get along.' What we need, beginning at the local level (and I believe it can work), is for officeholders to be honest and to say to every special interest and special need "I'm very sorry, I'd like to help, but for me to work for the special legislation or grant or whathaveyou that you request, I'd have to take something away from some other taxpayer. Government has no money of its own, and is costing us way too much now.. And also, what you ask is Unconstitutional, so I can't do it." HaHa, you say, why would any politician commit political suicide by not "helping" his constituents and supporters? How would he stay elected? BINGO! What we must do is begin to become, in whatever time we can spare, citizen legislators, who will serve no more than a term or two, and then back to private life. You wouldn't even need term limits if you took the benefits like pensions from officeholding away, and constituents would be so annoyed if you started retrenching on all the gimme's that you wouldn't be re-electable anyway. And, we need to cast long-term officeholders as something shameful, nothing to be proud of (what exactly is there to be proud of for someone pandering to get votes and campaign $$ so he can stay in office forever, giving away OUR money so he and his family can live well? I'm sure many here will think me naive for propounding this, but if we begin at the local level to find concerned people who will learn how to campaign and then for some to run for office themselves on starkly pure Constitutional principles (simply put, a common recognition that our American government is here to protect us from robbers, murders, rapists, thieves and foreign powers looking to take from us, rather than as a "safety net" or what's in it for me), one day we will have made a substantial dent in the current crazy political culture of 'go along to get along, one hand washes the other, and doing whatever you have to do keep your beak wet in the public trough as long as you possibly can. Go and be inspired to join your local political party and actually get involved in what needs to be done, or laugh cynically, your choice…

  2. I should have prefaced my comment above with an apology for straying from the subject, the Koch Bros and the whole idea of big $$ and political influence, but with more average citizens (do I hear a collective gasp?) entering politics as a short term duty, and doing campaigning as it should be done, with door to door neighborhood volunteers instead of slick campaign literature and expensive media campaigns that we all hate, you'd have a lot less need of Koch Bros and George Soros and Wall Street influence peddling etc etc etc. So it's all relevant to the original article by Mr. North.

  3. I get the logic but I cannot completely agree that military spending is always Keynesian. We need a strong military. A strong military needs "stuff". Purchasing needed goods in the American marketplace boosts the economy without being Keynesian. The purchasing of excessive or un-needed goods would be Keynesian. At least in my humble opinion. See my blog at http://cranky-conservative.blogspot.com

  4. I agree, every time I start thinking I am a Libertarian one of these guys (North or Stossel) goes off on the military, and it forces me to rethink my definitions. It seems that some of these folks (who I agree with inthusiastically 95% of the time) default to an almost religious adherence to ideology even in the fact of obvious and logical conflict with the reality of living on a planet where people want to kill us. It very much disappoints me that there is such a disconnect.

  5. Me too ! And I too write about all of it at my site http://www.downtoearththinking.com to expose all of the many illusions we all live under here in USSA today. Many excellent and informative topics and answers .

  6. Harley Hart says:

    What does Walter E. Williams say about this?

  7. profitup10 says:

    WE can take the power and money from the Federal government and end Keynes economic theory from DC. Keynes adopted the INVISIBLE HAND of Adam Smith before he died.

  8. Some good ideas here, but with the rarity of conservative/libertarians willing to step up to the plate and the savvy to fight off existing hogs feeding at the trough, it would be more realistic to keep good ones in the saddle.

  9. If we demanded that the federal government stay within its legal limits of defense, diplomacy, and regulation of taxes between states (original intent of the Commerce Clause), it would be 20% of its current size and corruption. This would make the inevitable waste and corruption a much more manageable size.