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When the Treasuries Are Empty

Written by Gary North on November 21, 2015

The secular world today is religiously committed to pragmatism. If something “works,” meaning survives for over a decade, then it is considered valid until it subsequently fails. The trouble is, some policies take over a century to fail. Witness the collapse of the public education system in England and the United States. Witness the collapse of the so-called Social Gospel. It takes a long, long time to convince pragmatic secularists, who believe in the substitute god of the State, that their god has failed. Even with disintegration all around them, the secularists will not abandon government-financed educational institutions. If anything, they want to increase the monopoly by stamping out all private education, either directly or through licensing and certification. They refuse to learn precisely because they are not neutral observers; they are religiously committed to secular humanism, and they cloak this religious commitment in the language of pragmatism.

What will it take for the scholars, bureaucrats, and politicians to abandon the present system? Collapse. Total, unmistakable, universal bankruptcy is the price of their education. This is not to say that a majority of present-day Keynesian apologists will actually abandon their present principles. It is to say that they will find it far more difficult to get anyone to listen to them, finance them, or put more of their visibly disastrous programs into effect. In short, in the long run, Keynesians are all dead. They will be forcibly retired from public “service.” They will go away muttering to themselves that things would have been all right if politicians, consumer, voters, and speculators had only imposed more Keynesianism. But no one will be listening.

What is far more significant is the attitude of the general public. The average voter knows nothing about economic theory. He is a Keynesian by default. He likes free lunches. He likes all the talk about depressions being impossible today. He likes to live in a world of government-guaranteed security. What he is living in is a world of government slogans. When the treasuries are empty in the various socialist states throughout the world, or the money is worthless, men will no longer be able to rely on government slogans. The calorie content of slogans is remarkably low.

What then? Will he abandon his false slogans for valid principles, like those Prof. Sennholz outlines in the next essay? Will he accept a very basic principle, namely, that no man has the right to confiscate another man’s wealth for his own benefit, or the benefit of those whose favor he is courting? You don’t need graphs and equations to make a decision concerning the legitimacy of ballot-box plunder. You don’t need a course in econometrics to get your hand out of your neighbor’s wallet.

An effective course in practical ethics is coming. This “refresher course” will be analogous to the one promised to Israel by the prophets. It will make a strong impression on the minds of the students in question. The trouble is, we cannot be sure about the lesson that the public will learn. Will it be the lesson learned by the British in the mid-1800’s, when rising grain prices finally called attention to the fact that quotas on grain imports were hurting the public? Will we see some new pair of Cobdens and Brights coming to the forefront with the message of free trade? Will the conservative, independent clergy support the hoped-for pair the way that they did in the 1840’s? Will we see, as they did in Britain, a one-generation roll-back of the regulatory legislation that had kept the British economy in a straight-jacket? Or will we see the coming of the Age of the Caesars, the men on the white horse, who come in the name of political order? Will it be a new Napoleon?

This is why serious Christians must get involved in political economy. Political economy will be the battlefield of the early decades of the next century. Political economy will be the arena of confrontation between humanism and orthodoxy. If Christians today succeed in rethinking the crucial questions of the State and its role, then there will be a foundation oi Christian ethics which will serve society well. But if the present-day trend of pietism, with its head-in-the-sand, pie-in-the-sky theology, continues to dominate the churches, then there will be no immediate confrontation. The “new, improved humanism” of the would-be Caesars will go without a direct challenge.

My opinion is this: there will be no rethinking of either pietism or Keynesianism until the consequences of both are painfully apparent. There will be no felt need for creating alternatives, both theoretical and practical, until the pragmatism of both pietism and Keynesianism is forever smashed. The pietists are pragmatists, too. They think you can exist equally well as a Christian under any economic system, so it really is not the place of Christians to offer concrete alternatives to any particular economic system. (Marxian Communism is understood as an evil, but not primarily because of its economics; its atheism and persecution are the evils to be removed, with democratic socialism. or free enterprise. or guild socialism, or cosmonomic mysticism as equally acceptable alternatives.) Christianity is seen as something totally separate from specific economic principles, so all economic systems “work” equally well for Christians. This is the ultimate pragmatism: everything works.

Both pragmatisms are united on one point: there is no such thing as Christian economics. The Keynesian pragmatist insists that there is only good economics or bad economics, but all economics is morally and theologically neutral. What he really means is this: Christian economics is, by definition, flawed because it is revelational and not neutral. Therefore, Christian economics is bad (non-) economics. In contrast, the pietist pragmatist insists that there is no economics at all. Good economics, bad economics, and in-between economics are all of one piece, namely, irrelevant to spiritual concerns. There is good and bad in all economics, meaning there is no way to determine the good from the bad and reduce the element of evil in bad economic systems. The Bible does not speak to the question of economics, it is argued, so we cannot really be sure what is good or bad in any economic arrangement. In short, everything works, meaning everything fails. The Christian is to be above it all on some higher, spiritual plane.

When the treasuries are empty, the public will get a glimpse of the reality of truly bad economics. At that point, who will offer the public an alternative? Will it be the Marxists? Will it be the anarchists? Will it be the guild socialists? Will it be the Bible-believing covenantal economists? Obviously, it will not be the defeated Keynesians. It will not be the pietists. So who will pick up the pieces? Or more to the point, in your local community, who will pick up the pieces?

My feeling is that in each local community, different people will be influential. Different working arrangements will be discovered. Most of these discoveries will be based on reaction: how to avoid the immediately preceding disaster? A sort of trial-and-error process of experimentation will take place in thousands of local regions. I do not believe that any central government can impose its will over every nook and cranny of a nation. There will be pockets of resistance to socialism in local communities and inside big cities (fraternal groups. churches. secret societies. etc.). This is why it is absolutely crucial to train up a small cadre of informed people in each local community. The world will be crying for leadership, and orthodoxy must provide it. But to be realistic, we have to say that orthodoxy will not immediately step forward with a fully developed, generally agreed-upon alternative to the empty treasuries of Keynesianism. It will be a long, slow process of education.

(For the rest of my article, click the link.)

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