We read on Wikipedia:
The phrase “ash heap of history” (or “dustbin of history”) figuratively refers to the place to where persons, events, artifacts, ideologies, etc., are relegated upon losing currency and value as history. A notable usage was that of the Russian revolutionary Leon Trotsky referring to the Mensheviks: “You are pitiful, isolated individuals! You are bankrupts. Your role is played out. Go where you belong from now on — into the dustbin of history!” in response to the Menshevik faction walking out of the All-Russian Congress of Soviets (25 October 1917) in Petrograd, which allowed the Bolshevik faction to dominate the party. In a speech to the British House of Commons (8 June 1982), U.S. President Ronald Reagan said that “freedom and democracy will leave Marxism and Leninism on the ash heap of history.”
It is now the Keynesians’ turn to join the losers of history.
They do not see it. Their critics do not see it. But it is a fact.
Allow me to shift metaphors away from the ashcan of history.
One of the most inspiring stories in the Bible is the story of the final night of the rule of the Babylonian Empire.
The Bible does not tell us what had happened. We know from secular history what happened. The general in command of the Medo-Persian forces had ordered his troops to redirect the Euphrates River to bypass the city. This left the river’s entry point into the city undefended. The Army streamed into these undefended points and conquered the city.
The rulers of the city had not seen it coming. They should have seen it, but they didn’t. They undoubtedly had reconnaissance information on the fact that the Medo-Persian army was at work up the river to redirect the river. But they did not respond fast enough. They did not see what was coming.
We may see this in retrospect as abnormal, but it is normal. Rulers at the end of the dynasty or an empire think it will go on forever. It may not last the night.
We are told that the King of Babylon invited the prophet Daniel to assess the situation. There follows one of the most famous incidents in the Bible.
At a banquet, a holy ghostly hand had written words on the wall. This terrified the king and his guests. He called in Daniel to explain. He had previously ignored Daniel.
25 And this is the writing that was written, Mene, Mene, Tekel, Upharsin.
26 This is the interpretation of the thing: Mene; God hath numbered thy kingdom, and finished it.
27 Tekel; Thou art weighed in the balances, and art found wanting.
28 Peres; Thy kingdom is divided, and given to the Medes and Persians.
29 Then commanded Belshazzar, and they clothed Daniel with scarlet, and put a chain of gold about his neck, and made a proclamation concerning him, that he should be the third ruler in the kingdom.
30 In that night was Belshazzar the king of the Chaldeans slain.
31 And Darius the Median took the kingdom, being about threescore and two years old.
From this, we get the saying: “The handwriting is on the wall.”
The handwriting is on the wall for Keynesianism.
THE POWER OF COMPOUNDING
In his remarkable 2001 article, “The Law of Accelerating Returns,” Raymond Kurzweil described the decline in the cost of information, beginning in 1890, and extending to the year 2000. If he had taken it back to 1844, he could’ve made an even stronger case, but the data are less clear. He began with the census of 1890, which was the first census to use punch cards.
(For the rest of my article, click the link.)