Keynes (right) with Harry Dexter White
I was just too stubborn to ever be governed by enforced insanity.
I hope one day to be able to say that truthfully. Because right now the Keynesian economic prescriptions I hear everywhere, since they issue from the fundamental materialism of modern Liberalism, look like a renewed attempt to enforce insanity.
In the Financial Times, though surrounded by some useful advice, we get a restatement of it: “Keynes’s genius – a very English one – was to insist we should approach an economic system not as a morality play but as a technical challenge.”
Technical challenge drastically underestimates the character of what we face. It underestimates the character of what is called the economic system. It underestimates the nature of man.
It is a common modern error to assume that the technical characteristics of a thing amount to the whole. But this is obviously wrong.
There is so much more to it than that. The Keynesian may think he has captured “demand” or “consumer confidence” or any other of a thousand elements — captured and bound it to a number in a statistical model. But even he, if pressed, would acknowledge the reality of things like psychology, fear, exuberance, etc — things outside the competence of statistical models, or at least incompletely assayed by models. So there is human psychology, which is not technical.
There is also the spiritual crisis of our age. The crisis of modernity — that same streak of madness which shall insure that my generation is one of whom history will remember it invented the school-shooter, a peculiar and depraved innovation in suicide-murder. Modernity imagined it could dislodge man from the foundations of his moral framework, and go on his technical mastery alone, but it was a terrible error. It is an error many centuries in the making. A colossal and ruinous error.
The spiritual nature of man cannot be apprehended by numbers and technique alone. And the spiritual nature of man affects everything about him, even his economic systems.
But our dear Keynesians, being modern Liberals, have stifled their perception of these things, on the grounds that they are fundamentally unreal. Man does not kill because of his spiritual nature! There is no such thing as his spiritual nature. No, no: it's always the Technicals.
So the school-shooter is fundamentally an irresolvable puzzle to him. And unless we want to hold the view that the economic crisis is quite unrelated to the spiritual crisis, we must say that the economic crisis will be fundamentally a puzzle to him as well. All the technical expertise in the world will not enlighten him.
The causes of this economic crisis lie, at base, in those things this writer has dismissed as a “morality play,” and Keynes is commonly thought to have dismissed with his quip we’re all dead in the long run. The causes cannot be spiritual, for if so then they must be fundamentally unreal in his mind. For him it is always a technical question. The great Technicals will save us, in golly good English fashion.
To hell with that premise. It's part of what got us here in the first place.
Nevertheless, once we acknowledge — even in our assay of economic recessions — that man is a dualistic creature, that his spiritual nature is real despite our general inability to quantify it, we must not instantly rush off in the other direction and seal ourselves up in a classroom of abstract jeremiads against the spiritual crisis.
In others words, modern man has made an idol of his technical capacity, and this is a great error; but this does not mean that we should dismiss the technical facts we have uncovered, as he dismissed the spiritual facts we can’t not know. Economic science is a useful thing indeed once its limits are acknowledged, and I have great suspicion when someone reproaches it tout court with a sneer.
With all that as a preface, I present this article on Dick Fuld, Chairman and CEO of Lehman Brothers from 1993 until its demise in September 2008. My question is this:
Is it in the nature of Capitalism, or in the nature of America, or indeed in the nature of man, to produce tragedies (in the technical sense) like this?