Kevin,

"Amen."

There is of course a Greek version in two particles, spelt eta, mu eta nu and
pronounced "air mairn." It means "yea verily" or "that
is so" and goes right back to Hesiod.


Geoff

In message <001001c2b2a6$5d135ae0$bd51fea9@q1k2m4>, Gunnar Tomasson
<gunnar.tomasson@...> writes
>Re: [gang8] Keynesian apologists and the "General Theory"James:
>
>Without vision, the people perish, somebody once suggested.
>
>Keynes concluded the General Theory with the like thought:

That "somebody" was the author or compiler of the book of Proverbs in
particular 29:18 though modern English versions use different words.
Sure I was a teacher of Religious Education and might be expected to be
familiar with the words, but it was familiarity with these words and
many others that made me become an RE teacher after many years in
industry and commerce.  The Royal Exchange in Manchester, now a theatre,
was a trading centre, and around the dome were words from Proverbs: a
good name is rather to be chosen than great riches, and loving favour
than silver or gold.
         King Solomon is the traditional author of Proverbs, but that
book and the other collected wisdom of Ancient Israel is the inheritance
of centuries before his time, and such compilation is occasioned by
people facing disaster and looking back to see where things have gone
wrong.
         For a miniature example, those with leisure might look at
Jeremiah 9:23-24.  Here is a word picture of a worried king consulting
his ministers; the military, the treasury and academia, but the prophet
insists that what matters is steadfast love, justice and righteousness.
Look back to the preceding verses 20-22 and see the graphic picture of a
country in crisis, death coming up into our windows, dead bodies lying
in the open places.
         Just like our own time, really.  Jeremiah kept saying things
like that, and when events proved him right, legend has it that he was
assassinated.  Let's hope we can do better, like the requirement to "use
true and honest weights and measures" whether they be dollars, euros or
blips.
         Kevin
--
Kevin Donnelly

Kevin,

Recently, in OnLineOpinion, we've had some assessments of our "Favourite and
Other Prime Ministers."
In the context of "Without vision, the people perish," you might be
interested in my contribution below.


James
http://VictoryOverWant.org
http://www.crystaldreamspub.com/bios/authors/A-E/cumes_j.htm

    Favourite and Other Prime Ministers


  I was sixteen when Joe Lyons died in office. He was a distant figure. I
never met him.
  With every prime minister since, I have had some personal contact.
  The thirty-three years from Lyons' death to Whitlam's advent brought great
changes which, despite the Cold War, at least promised some remedies to the
economic and social miseries and political afflictioms of the inter-war
period.
  By the late 1960s, changes were so great that economic and social policies
and, consequently, party-political programs, needed major adaptations. Those
adaptations were never satisfactorily made. Vietnam ended and the Soviet
Union collapsed. The trend accelerated towards globalisation, along with
territorial fragmentation resulting especially from the end of colonial and
communist empires. Political, economic and social instability, together with
abdication of responsibility by governments in the name of freedom and
"free-market" efficiency, tended to diminish disciplines and intensify
violence, wars and terrorism.
  Against this world background, who were the most effective Australian Prime
Ministers over the whole period from 1939 to 2003?
  We must first consider the Prime Ministers during what was, at least until
recently, fairly regarded as the most challenging period in Australia's
history, that of the Pacific War and postwar reconstruction.
  Only weeks in office, the untried John Curtin faced the threat of imminent
Japanese invasion with a competence that, in retrospect, seems remarkable.
Panic was never far away among ordinary Australians during the months after
Pearl Harbour. I recall joining a group of fellow university students to
plan how we would wage guerilla warfare when - not if - the Japanese landed.
Somehow Curtin and his team held the country steady and led us safely
through those turbulent and terrifying months. It was not the politicians
but "a handful of brave kids" who, on the Kokoda Track and at Milne Bay,
turned the invader back; but somehow Curtin managed to get the "brave kids"
in place and to arm, feed and supply them, however poorly, so that they
could inflict the first defeats on the seemingly "invincible" Japanese army.
  Inevitably, Curtin made mistakes in his conduct of the war, his handling of
the home front and his dealings with the Americans - and British - but,
overall, he managed an unprecedented, complex situation surprisingly well.
To keep Macarthur on side, he was sometimes unfair to Australian generals,
in particular Clowes at Milne Bay and Allen in the advance back to Kokoda,
but, pragmatically, he saw that as a price that had to be paid.
  The war hastened Curtin's death and brought - characteristically to a room
at the Hotel Kurrajong instead of the PM's Lodge - the man who probably
ranks as our finest political leader of the last sixty years. Ben Chifley
came to power without seeking it or deriving any personal benefit from it.
Intelligent and decisive, he had, above all, a personal integrity rarely
seen among his peers since.
  As an imaginative, though unschooled political economist on the Royal
Commission on Money and Banking in the mid-1930s, as Curtin's Treasurer and
in re-ordering our economic and social environment after the war, it was
Chifley who led Australia into one of our periods of most dramatic national
growth and stability between 1945 and 1970.
  Chifley was defeated in December 1949, partly because of concern over his
policy to nationalise the banks and, as some saw it, his too fierce
determination to safeguard his economic and social revolution; and largely
by an Opposition leader who lured electors with his promise to abolish
petrol rationing and unsettled them with lurid references to Hayek's Road to
Serfdom.
  Menzies, who had not distinguished himself between 1939 and 1941, retained
power after 1949 through a deep split in the Labor Party and such good
fortune as the Petrov defection. However, he could claim a measure of
greatness because, despite all the portents, he preserved the essence of
Chifley's revolution. He was also the first of three postwar prime ministers
who were personally impressive both at home and when they ventured overseas.
  Even so, Menzies diminished himself by his sometimes nauseating attachment
to the British monarchy and, indeed, to everything British and especially
Scottish, and he diminished his country by such episodes as his performance
during the Suez crisis of the mid-1950s. In his last days in office, he
nourished allegations that he was racist by declining to go to or be
represented at a Commonwealth Conference called by the Nigerian Prime
Minister to discuss Rhodesia after UDI.
  Nevertheless, he was a man of fine physical presence and good though rather
superficial intellect. I was at our Embassy in Bonn when he made the first
postwar visit by an Australian Prime Minister to (West) Germany. President
Heuss and Chancellor Adenauer were both men of distinction with whom
Menzies, unlike many of his successors in similar circumstances, could deal
on better than equal terms. As always, he spoke well both publicly and
privately. Incidentally, he arrived in Bonn by everyday train, in a standard
compartment, with a mere couple of officials. He was confident, at ease and
modest in his personal demands.
  The other two postwar prime ministers who impressed overseas were Whitlam
and Fraser. Both travelled in grand style. Neither was modest in his
personal demands. Like Menzies, Whitlam gave a pleasing impression of good
fellowship. Fraser cut a more reserved and formidable figure.
  Menzies was the last Australian prime minister with any real claim to
greatness. That has to be set in the context that prime ministers from 1945
to 1970 enjoyed a favourable economic and social environment deriving from
Chifley's policies of high and stable rates of growth, full employment and
strong external relations. The three prime ministers who followed Menzies
were borne along by this benevolent environment and, in some ways, the four
or five years after Menzies' retirement were a culmination of this golden
era. But Holt, Gorton and McMahon did little to enhance the blessings of
those years. At best, they could claim, until the early 1970s, to have done
little actively to demolish the structure that Chifley created and Menzies
managed to safeguard.
  I was at the United Nations General Assembly in 1967 when I heard of Holt's
disappearance. At a previous UNGA I attended, in 1963, Kennedy was
assassinated. During a later UNGA, in 1970, Nasser died. Even for his fellow
Australians, Holt's demise was, politically, by far the least momentous of
the three events.
  Gorton "did it his way" but with only confused ideas of where he was going.
Like several prime ministers, he was unfortunate in his selection of aides.
His successor had been Treasurer and then Foreign Minister in Gorton
Cabinets. In the latter role, I found McMahon often friendly and amusing and
at other times volatile to the point of hysteria. Much of the time, he was
tense and highly suspicious of everyone - he accused me once of "betraying"
him to Gorton - and, on occasion, his speeches and performance overseas
could be embarrassing.
  Whitlam was both one of our more visionary prime ministers and very much an
activist. He wanted things done right this minute. That often meant he
reflected insufficiently on the consequences. His appreciation of the
Australian dollar in December 1972 illustrated his penchant to act hastily.
It also illustrated his uncertain grasp of economics and the changed
economic and social environment of the 1970s which almost inevitably made
Whitlam's a government not unlike Scullin's at the onset of the Great
Depression.
  Post-Whitlam, it has been downhill all the way. Fraser restored some
conventional, though transitory stability; and he has won more applause as
Australia's Jimmy-Carter-in-retirement than he did in office.
  The former trade-union boss, Bob Hawke, and Jack Lang's protégé, Paul
Keating, destroyed what was left of our postwar achievement and joined the
slapstick politicians in the Reagan/Thatcher mould to lead us into
ill-considered "free-market" anarchy and substantial abdication of
governmental responsibility.
  That brings us to Howard on whom a disillusioned electorate has had to rely
since 1996 because there is no plausible alternative. Never a man of much
vision or style, more a man designed to be an FAQ country solicitor than a
man to determine his country's destiny, he has now lost even his earlier
reputation for honesty. Perhaps the best we can say of him is that he's a
sort of Joe Lyons of our time.
  So we're back where I was aged 16. Howard told us before the 1996 election
that his aim was to make us "comfortable." Few would now claim he has made
us any more comfortable than Lyons did in the 1930s. He has few original
ideas and, like Lyons, holds on to power thanks to a poor Opposition, and a
capacity to grab at expedient good fortune. He trots, doglike, behind his
American masters as, before 1939, Australian prime ministers left foreign
policy to their British betters and much of Australia's economic and social
fate to the Bank of England. He wins elections by such crowd-pleasing
expedients as denying refugees the right to clamber on to an Australian
life-raft.
  Like Joe Lyons, he has a pathetic Opposition which has lost its way but
which, even more sadly, is not even racked by the clash of political
philosophies and social forces that characterised the 'thirties. Even Carmen
Lawrence, though she laments her Party's timidity and lack of principle,
gives only limited articulation to what she wants Labor to do. She is no Ben
Chifley. After Whitlam departed, the light on the hill that guided Curtin
and Chifley as well as some of the wilder men of the 'thirties and 'forties
like Eddie Ward and Jack Lang, lost its brilliance to flutter like a candle
in the wind and now has long since been completely extinguished.
  Does it matter?
  Yes, it does. The last thirty years have brought us high and chronic
unemployment, low real public and private investment and low growth. Our
industry has been gutted by migrating overseas, our farms left to rot, their
environment neglected. Homelessness is high, poverty widespread, inequality
an ever growing curse. Even for our daily consumer needs, we live largely on
money borrowed from abroad. Our trade and payments are never in balance and
never will be, so long as we persist in "fighting inflation" with hikes in
interest rates. Our dollar which, near the start of Whitlam's bumpy "reign"
thirty years ago, was worth more than its United States counterpart, now
struggles to stay above fifty cents - and the greenback itself is propped up
largely by mystic supports.
  Would a Chifley have made any difference, if he had been with us during
those thirty years and, more precisely, if he were with us now? We can be
sure he would battle for full employment. He would keep interest rates low
and real public and private investment high. If the Holden was one of his
achievements, what might be the equivalent now? He would battle against
drought and, more generally, to enhance our water resources and, as a
countryman himself, to help "the man on the land" - and those who make up
healthy rural communities. He would keep the banks in their place, requiring
that, for their privileges, they deploy our resources at home for the
growth, stability and welfare of us all. He would give decisive leadership.
Yes, he would sometimes be wrong but always fair to the everyday Australian
and the battler, always decent and always honest.
  His foreign policy would be robust; (but he would not make ill-advised
threats to launch pre-emptive strikes, in hypothetical situations, against
terrorists in otherwise friendly territory). He would be a reliable friend
but not a grovelling retainer to the mighty, whether across the Pacific or
elsewhere. He would restore effectiveness to a foreign service that, within
his government, Evatt created from almost nothing after 1941. At the same
time, he would know that, in the end, power depends not on the size of our
foreign-affairs and defence budget but on the economic and social strength
that sustains it.
  Is there now a Chifley lurking somewhere in the Labor Party or even among
the Liberals or lesser political groups? Frank Crean was not the brightest
of Whitlam's stars; but he held robustly to beliefs that his son seems
entirely to have lost. More widely, the visionary spirit of the fathers has
been lost with their sons and grandsons and there seems little promise from
the generation to come. Will it take another Great Depression and another
world war to produce another Chifley? As we ask that question, we must also
ask whether another Great Depression and, if it comes, another world war
will put at risk the very survival of all of us - the rare and hallowed
Chifleys along with the rest?
  If all we have to look forward to is a longer line of Joe Lyons - and if
other world "leaders" continue to be no better - then Australia's destiny,
and that of our friends, probably lies somewhere between dismal and
catastrophic. Survival may not be the reward of those who cannot match their
leadership to the majesty of the achievement of which humanity is now
capable. It is that achievement - already majestic in so many ways -  that,
without wise leadership, may, paradoxically, destroy us all.


James Cumes
http://VictoryOverWant.org
http://www.crystaldreamspub.com/bios/authors/A-E/cumes_j.htm

----------
>From: Kevin Donnelly <kevin@...>
>To: gang8@yahoogroups.com
>Subject: Re: [gang8] Keynesian apologists and the "General Theory"
>Date: Fri, Jan 3, 2003, 2:57 am
>

> In message <001001c2b2a6$5d135ae0$bd51fea9@q1k2m4>, Gunnar Tomasson
> <gunnar.tomasson@...> writes
>>Re: [gang8] Keynesian apologists and the "General Theory"James:
>>
>>Without vision, the people perish, somebody once suggested.
>>
>>Keynes concluded the General Theory with the like thought:
>
> That "somebody" was the author or compiler of the book of Proverbs in
> particular 29:18 though modern English versions use different words.
> Sure I was a teacher of Religious Education and might be expected to be
> familiar with the words, but it was familiarity with these words and
> many others that made me become an RE teacher after many years in
> industry and commerce.  The Royal Exchange in Manchester, now a theatre,
> was a trading centre, and around the dome were words from Proverbs: a
> good name is rather to be chosen than great riches, and loving favour
> than silver or gold.
>         King Solomon is the traditional author of Proverbs, but that
> book and the other collected wisdom of Ancient Israel is the inheritance
> of centuries before his time, and such compilation is occasioned by
> people facing disaster and looking back to see where things have gone
> wrong.
>         For a miniature example, those with leisure might look at
> Jeremiah 9:23-24.  Here is a word picture of a worried king consulting
> his ministers; the military, the treasury and academia, but the prophet
> insists that what matters is steadfast love, justice and righteousness.
> Look back to the preceding verses 20-22 and see the graphic picture of a
> country in crisis, death coming up into our windows, dead bodies lying
> in the open places.
>         Just like our own time, really.  Jeremiah kept saying things
> like that, and when events proved him right, legend has it that he was
> assassinated.  Let's hope we can do better, like the requirement to "use
> true and honest weights and measures" whether they be dollars, euros or
> blips.
>         Kevin
> --
> Kevin Donnelly

030103 Keynes quality

Your life and mine were transformed by the war which forced the application of credit based expansion. Keynes wrought no miracles; at the end he was a failure, as he would surely have admitted.

Henry sees Marshall Aid as an American ploy to prevent the spread of communism
and to support American imperialism. At the time we
younger people in Europe had a different view. We saw ourselves as playing on
American fears of communism, and even worse American
fears of a return to pre-war depression, to our advantage. It worked
brilliantly.

I remember advocating this line as early as December 1946 when I was still at
school. My schoolmates were of course some of the
cleverest lads in Britain but sadly not candidates for the establishment as we
were not a fee-paying boarding school. Their
assessments of the world economic situation were spot on. At a conference of a
thousand+ Birmingham sixth formers an American
embassy PR official was made to look a complete dolt, and was firmly told what
was what. When he tried to characterise the Americans
as charitable do-gooders in Europe, he was told that they were doing exactly
what necessity and self interest made them do if they
wanted to avoid a return to unemployment. Youth can be very blunt, and Brits are
born cynics. They also told him they were not
interested in sabotaging Russia. They were not really pro-Russian, but in the
presence of an Ameircan wind-bag they thought it would
be fun to pretend to be.

Effectively Marshall Aid paid off Britain's foreign debts.

I suspect that present youth also has the measure of things. Certainly the BBC
is doing its best to undermine America. Last night it
was a feature on American mega-churches, at the end of which Brits must have
concluded there might be worse things than having a
shiny new mosque around the corner. And of course BBC listeners have just voted
to exile Tony Blair and import Saddam.

Geoffrey

----- Original Message -----

From: Gunnar Tomasson

To: gang8@yahoogroups.com

Sent: Monday, December 30, 2002 8:59 PM

Subject: Re: [gang8] Social Credit, Say's law and debt deflation

Here is something which I have been wondering about:

 

After 20-30 years of crediting New Economy Speak, the free-spending, economy-sustaining U.S. Baby Boomers have had the scare of their lives in the form of collapse of share values, corporate sleaze, and vanishing pension rights during the past couple of years.

 

This leaves U.S. economic policy makers with few or no good options.

 

1.  Low interest rates may move traumatized Baby Boomers to refinance their mortgages - and put the savings away for rainy days down the road.

 

2.  Offers of increased consumption credit may find few takers among Baby Boomers.

 

3.  Monetary policy has little or no direct bearing on the perceived need for belt-tightening by state governments facing huge - and rising - fiscal deficits.

 

4.  Fiscal policy is locked into (a) tax relief, (b) rising military expenditures, and (c) cutbacks in other expenditures in the name of fiscal responsibility.

 

5.  In view of 1 - 4, the corporate sector may remain in wait-and-see mode insofar as new investment and job creation is concerned.

 

In the final analysis, all these factors are rooted in U.S. monetary policy in the post-Bretton Woods era, whose advent was welcomed by mainstream and monetarist economic scholars alike - who now remain silent on the need for structural monetary reform and/or prescribe renewed monetary inflation as antidote to the consequences of the monetary inflation of the past thirty odd years.

 

When we first made contact in the late 1980s, I advised Geoffrey and Chris that, in my view, post-Bretton Woods world monetary arrangements were a "house of cards" destined to come "crashing down".

 

Might 2003 have some such 'surprise' up its sleeve?

 

Gunnar

----- Original Message -----

From: G W Gardiner

To: gang8@yahoogroups.com

Sent: Friday, January 03, 2003 4:37 AM

Subject: Re: [gang8] Keynesian apologists and the "General Theory"

030103 Keynes quality

James,

I knew some of the Bloomsberries well and I did not like them one bit. Whenever I am tempted to idolise Keynes I recall the dreadful company he kept. Can one ignore that? Chris has a valid point. They were all consummate poseurs. Keynes’ best intellectual qualification was that he was twelfth wrangler in maths, but he had a hell of a lot of coaching from his dad. He never took any examination in economics. Toadying to Marshall, a family friend, was an easier route to high position.

As for his later colleagues, Kahn was impossible, Ruth Cohen (my near neighbour) a battle axe who never listened, and two hours of Joan Robinson was enough for me. Denis Robertson betrayed him totally, and was the patron of Friedman. Kaldor, whose charm fooled Keynes, was utter rubbish, and Meade stole my teaching on tax without a glimmer of acknowledgement.

Some of Keynes' contributions to the Macmillan debates were incomprehensible and childish in their purpose of being too clever-clever. He was outclassed by two other members of the committee, Ernest Bevin especially.

Neither Keynes nor Harrod could see the fault in Douglas's arguments, and Douglas had the simplest answer. Schacht showed the way by increasing GDP by 65% in five years, and he started the process three years before the General Theory was published.

Keynes' greatest virtues were his ability to change his mind, his occasional superb piece, and his vitriolic style when there was a hatchet job to be done. He also did a marvellous job for the Arts. His wartime work was good, but he was hardly in control of events. At the beginning of the war he worked on how to pay for it. There is no problem with paying for a war so far as home production is concerned; one just taxes equal to the production of arms &c, but foreign supplies are a difficulty. Those would eventually have to be paid for by exports so the plans should have been for expanded production post war, not for financial juggling. Keynes did no work on that. Later he put all his effort into planning how to deal with the post war slump. He invented "Post War Credits", part of one’s tax bill which was to be repaid after the war. Keynes plan was that the repayment would kickstart the economy when the post war slump arrived. The average holding was about £500, equal to £25,000 today. The slump never came and the Post War Credits were an embarrassment to every post war government. The slump never came not because of anything he did or advocated, but because the slump after The Great War was a government creation, slightly aided by Keynes’ bad advice on interest rates. The post WWII boom was not fed by Keynesian deficit financing. Indeed my recollection is that Cripps had a balanced budget. Post war Keynesian planning was a fiasco. See Corelli Barnett’s Lost Victory. I do not think that we should look on Dalton and Cripps as just shadows of Keynes. They would have argued strongly they were their own men, and possibly his superiors.

Keynes may have brilliantly criticised Churchill in 1925 for keeping interest rates high, but who was it who suggested a ten per cent rate only four years earlier? And who denied all responsibility when a 7% rate caused 2,000,000 unemployed? In between he had read A. H. Gibson and adopted his ideas.

I remember the thirties too, and from the vantage point of a ringside seat among the workers.

Let's keep our perspective. Keynes wrote mainly for the chattering classes. I do not recall that he ever put his foot inside a factory. He could have learned about how to start up a great business by crossing the River Cam to visit C. O. Stanley at Pye, but there is no evidence he ever went to the industrial part of Cambridge. Three hundred yards from his desk in Kings, at 15 Bene’t Street, was Roger Parker who could have given him the most intimate insight into the economy of the whole Cambridge area as 90 per cent of the businessmen were his banking customers, but there is no record of any meeting. Parker was a main board director of Barclays, then the only great international bank. Adam Smith would have revelled in contact with such people. One can, as Gunnar constantly proves, tease brilliant stuff from Keynes’ writings but what rubbish one has to wade through. His real reputation really stands on the two "Consequences" books. They are brilliantly perceptive. The second is only 32 pages, but is beyond price.

The General Theory is not a general theory of anything, but a farrago of both good and bad. There are brilliant bits, recycled perhaps from newspaper articles he wrote, or lectures he gave, but the text is very badly put together, and often extremely badly written. He desperately needed a good editor like Chris.

What made Keynes appear so great was the quality of the other economists. Heaven knows how they survived. In 1948 I accidentally attended a routine lecture by one of the women economists in Cambridge. It was without peer the worst lecture I have ever heard.

Your life and mine were transformed by the war which forced the application of credit based expansion. Keynes wrought no miracles; at the end he was a failure, as he would surely have admitted.

Geoffrey

----- Original Message ----- From:

j.schukte.baeuminghaus To: gang8@yahoogroups.com Sent: Thursday, January 02, 2003 1:29 PM Subject: Re: [gang8] Keynesian apologists and the "General Theory"

Chris,

You reveal the generation to which you belong.
If you had lived through the miseries of the 'thirties as a child and seen your life as a young adult marvellously transformed, even by a slick and sloppy Keynesianism, you might be less disposed to describe the man who had wrought such a miracle as "a conceited, not very profound man, who happened to be the best among a contemporary mob of no-hoper economists."



James

----- Original Message -----

From: G W Gardiner

To: gang8@yahoogroups.com

Sent: Friday, January 03, 2003 10:37 AM

Subject: Re: [gang8] Keynesian apologists and the "General Theory"

030103 Keynes quality

James,

I knew some of the Bloomsberries well and I did not like them one bit. Whenever I am tempted to idolise Keynes I recall the dreadful company he kept. Can one ignore that? Chris has a valid point. They were all consummate poseurs. Keynes’ best intellectual qualification was that he was twelfth wrangler in maths, but he had a hell of a lot of coaching from his dad. He never took any examination in economics. Toadying to Marshall, a family friend, was an easier route to high position.

As for his later colleagues, Kahn was impossible, Ruth Cohen (my near neighbour) a battle axe who never listened, and two hours of Joan Robinson was enough for me. Denis Robertson betrayed him totally, and was the patron of Friedman. Kaldor, whose charm fooled Keynes, was utter rubbish, and Meade stole my teaching on tax without a glimmer of acknowledgement.

Some of Keynes' contributions to the Macmillan debates were incomprehensible and childish in their purpose of being too clever-clever. He was outclassed by two other members of the committee, Ernest Bevin especially.

Neither Keynes nor Harrod could see the fault in Douglas's arguments, and Douglas had the simplest answer. Schacht showed the way by increasing GDP by 65% in five years, and he started the process three years before the General Theory was published.

Keynes' greatest virtues were his ability to change his mind, his occasional superb piece, and his vitriolic style when there was a hatchet job to be done. He also did a marvellous job for the Arts. His wartime work was good, but he was hardly in control of events. At the beginning of the war he worked on how to pay for it. There is no problem with paying for a war so far as home production is concerned; one just taxes equal to the production of arms &c, but foreign supplies are a difficulty. Those would eventually have to be paid for by exports so the plans should have been for expanded production post war, not for financial juggling. Keynes did no work on that. Later he put all his effort into planning how to deal with the post war slump. He invented "Post War Credits", part of one’s tax bill which was to be repaid after the war. Keynes plan was that the repayment would kickstart the economy when the post war slump arrived. The average holding was about £500, equal to £25,000 today. The slump never came and the Post War Credits were an embarrassment to every post war government. The slump never came not because of anything he did or advocated, but because the slump after The Great War was a government creation, slightly aided by Keynes’ bad advice on interest rates. The post WWII boom was not fed by Keynesian deficit financing. Indeed my recollection is that Cripps had a balanced budget. Post war Keynesian planning was a fiasco. See Corelli Barnett’s Lost Victory. I do not think that we should look on Dalton and Cripps as just shadows of Keynes. They would have argued strongly they were their own men, and possibly his superiors.

Keynes may have brilliantly criticised Churchill in 1925 for keeping interest rates high, but who was it who suggested a ten per cent rate only four years earlier? And who denied all responsibility when a 7% rate caused 2,000,000 unemployed? In between he had read A. H. Gibson and adopted his ideas.

I remember the thirties too, and from the vantage point of a ringside seat among the workers.

Let's keep our perspective. Keynes wrote mainly for the chattering classes. I do not recall that he ever put his foot inside a factory. He could have learned about how to start up a great business by crossing the River Cam to visit C. O. Stanley at Pye, but there is no evidence he ever went to the industrial part of Cambridge. Three hundred yards from his desk in Kings, at 15 Bene’t Street, was Roger Parker who could have given him the most intimate insight into the economy of the whole Cambridge area as 90 per cent of the businessmen were his banking customers, but there is no record of any meeting. Parker was a main board director of Barclays, then the only great international bank. Adam Smith would have revelled in contact with such people. One can, as Gunnar constantly proves, tease brilliant stuff from Keynes’ writings but what rubbish one has to wade through. His real reputation really stands on the two "Consequences" books. They are brilliantly perceptive. The second is only 32 pages, but is beyond price.

The General Theory is not a general theory of anything, but a farrago of both good and bad. There are brilliant bits, recycled perhaps from newspaper articles he wrote, or lectures he gave, but the text is very badly put together, and often extremely badly written. He desperately needed a good editor like Chris.

What made Keynes appear so great was the quality of the other economists. Heaven knows how they survived. In 1948 I accidentally attended a routine lecture by one of the women economists in Cambridge. It was without peer the worst lecture I have ever heard.

Your life and mine were transformed by the war which forced the application of credit based expansion. Keynes wrought no miracles; at the end he was a failure, as he would surely have admitted.

Geoffrey

----- Original Message ----- From:

j.schukte.baeuminghaus To: gang8@yahoogroups.com Sent: Thursday, January 02, 2003 1:29 PM Subject: Re: [gang8] Keynesian apologists and the "General Theory"

Chris,

You reveal the generation to which you belong.
If you had lived through the miseries of the 'thirties as a child and seen your life as a young adult marvellously transformed, even by a slick and sloppy Keynesianism, you might be less disposed to describe the man who had wrought such a miracle as "a conceited, not very profound man, who happened to be the best among a contemporary mob of no-hoper economists."



James

----- Original Message -----

From: G W Gardiner

To: gang8@yahoogroups.com

Sent: Friday, January 03, 2003 4:37 AM

Subject: Re: [gang8] Keynesian apologists and the "General Theory"

----- Original Message -----

From: ChrisOfDulwich@...

To: gang8@yahoogroups.com

Sent: Saturday, January 04, 2003 1:54 PM

Subject: [gang8] Where do economists come from?

Gunnar writes, of Paul Davidson : "As I recall it, Paul was a biologist before turning to economics - this may account for the differences in our mindsets, since I got into economics in my teens."

Geoffrey writes:  "Keynes’ best intellectual qualification was that he was twelfth wrangler in maths, but he had a hell of a lot of coaching from his dad. He never took any examination in economics."

In his book TTM, Geoffrey wrote of Irving Fisher, author of MF=PT "Fisher was a great mathematician but his approach to money is just as simplistic as that of the man in the street".

Gentlemen, I think we have a valid pattern here. Paul Davidson's outburst had all the passion of the Late Convert To The Cause, a bit like a born-again Christians.

To produce valid economics, someone either needs hugely sensitive antennae to a multiplicity of possible causes, or a serious career in economics-revealing work such as banking, or preferably both. Geoff mentioned the mine of useful intelligence on economics available to Keynes just down the road in Cambridge, with one of Barclay's most senior managers, but JMK just couldn't be bothered. That was the measure of the man, I'd say: aloof, indifferent and self-admiring.

The colourful man who knows least, like Eric van Daniken, will produce theses which hold the greatest appeal for easy-going  minds. That rule appeals equally well to economics.

Like Gunnar, I did economics at both school and university, which was unusual even in the early 1960s. As a result I did six years academic study of the subject which is approximately twice as much as most economic graduates in this country. As a result I was profoundly sceptical of what was being taught at Oxford even before I had finished my degree there.

That scepticism deepened as career moves took me, successively, to the Financial Times, The Times, Economic Editor of Industry Week and then to head economic policy work for Britain's Chambers of Commerce : that by the time I was 29.  I told anyone who asked that although I had spent six years studying economics it was only once I began work that I actually started learning about economics, almost from scratch.

Within the Gang, Randy more than anyone has in his time produced the most devastating insights into the Nobel Prize in Economics. His explanation squared with first-hand observation that the theses which have been awarded the Nobel Prize in recent years have as often as not been naive or insignificant.

Not so long ago, archaeology made the switch from unobservant trophy hunting to meticulous examination of mundane evidence. Conventional economics has yet to make that switch, and in the meantime the Gang would do well to uphold its habitual scepticism towards both the credentials and the significance of thinking promoted by the economics profession.

Chris

.

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030104 Chinese successes.

Gardiner to Gang8

Lying in a museum in Urumchi in western China are several 4,000 year old mummified bodies whose features are remarkably European, indeed Scottish or Irish. An acquaintance of ours has seen them and was not entirely happy with the care being taken of them. DNA analysis might decide to whom the people are related. Some Chinese officials seem to be reluctant to allow tests, fearing that Europeans will claim some kind of influence over Chinses cultural history if the bodies should prove to related to European genetic types. As the people were probably no more than sheep herders this is silly. Chinese technical achievements preceded European imitations by anything up to 2,000 years. Indeed a European is trying to increase our knowledge of that superiority. He is a former British submarine commander, named Gavin Menzies. He wants DNA tests to be made all over the world to establish that Chinese mariners arrived in many places around the globe in 1421-2. See www.1421.tv for more information.

In 1421 the third Ming Emperor, Zhu Di, sent huge fleets to explore the world. There were over 3750 vessels, and the largest were nine-masted behemoths, constructed with water-tight compartments such as were not imitated in the West until nearly 500 years later. Unfortunately the strain of the construction of these fleets on the Chinese economy was so severe that the government found itself under threat of overthrow. The expeditions produced little economic benefit, and the decision was taken never again to bother about foreigners. Records of the voyages were systematically destroyed, and the great ships were left to rot, never to be replaced. China turned in on itself. The rest of the world had nothing to teach them.

Menzies was led to research what the Chinese did by the realisation than certain pre-Columbian maps were very accurate in their representation of places no European had visited. He set out to find whence the cartographical information came.

As a mariner and navigator he has been able, he thinks, to reconstruct where the Chinese fleets got to. They could only sail before the wind, so the routes they took were determined by currents and winds. Wrecks of ships made from Southeast Asian hardwoods have been found in places such as Australia, and there are a few stone monuments erected by the Chinese. He reckons that one or more of the fleets visited India, the eastern coast of Africa, the western coast of Africa up to Cape Verde, Cuba, the whole western coast of North America, plus a circumnavigation of Greenland, Iceland and north Russia through the Arctic Ocean back to home. The western coast of the Americas were visited from the Straits of Magellan as far as Washington State. The Pacific was crossed, New Zealand visited and Australia circumnavigated.

It will be most interesting if DNA tests prove his conclusions.

I think the Chinese can now safely return the compliment and let us have DNA tests of those bodies found at Loulan. As the form of Indo-European spoken in the region was very close to Gaelic there must be strong possibility there is a connection between the sheep herders of the Tien Shan and the Irish or Scots. No-one but an idiot would think that such a connection in any way challenges the Chinese right to be regarded as the originators of masses of technical developments. Their knowledge of chemistry, for instance, was 1800 years ahead of the "Lunar Men."

Menzies points out that Zhi Di got together an army of a million to repel the Mongols at a time when his contemporary King Henry V was lucky to have 5,000 archers to fight for him in France. Mind you, I think the famous Welsh archers could have done a tidy bit of damage to either Mongols or Chinese before being overwhelmed by numbers. Henry V’s army travelled across to France a hundred at a time in four fishing boats. Henry V possessed six hand written books while the Chinese under Zhu Di had printed books and could even buy printed novels in Beijing’s market. (The oldest extant Chinese printed book is date 868 AD or thereabouts.)

Geoffrey

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An Unnecessary War


John J. Mearsheimer and Stephen M. Walt | Foreign Policy | 2003-01-01
John J. Mearsheimer is the R. Wendell Harrison distinguished service
professor of political science at the University of Chicago, where he
codirects the Program in International Security Policy. He is the author
of The Tragedy of Great Power Politics (New York: W. W. Norton, 2001).
Stephen M. Walt is the academic dean and the Robert and Renee Belfer
professor of international affairs at Harvard’s John F. Kennedy School
of Government. He is faculty chair of the International Security Program
at the Belfer Center for Science and International Affairs and is
writing a book on global responses to American primacy.


Should the United States invade Iraq and depose Saddam Hussein? If the
United States is already at war with Iraq when this article is
published, the immediate cause is likely to be Saddam’s failure to
comply with the new U.N. inspections regime to the Bush administration’s
satisfaction. But this failure is not the real reason Saddam and the
United States have been on a collision course over the past year.
The deeper root of the conflict is the U.S. position that Saddam must be
toppled because he cannot be deterred from using weapons of mass
destruction (WMD). Advocates of preventive war use numerous arguments to
make their case, but their trump card is the charge that Saddam’s past
behavior proves he is too reckless, relentless, and aggressive to be
allowed to possess WMD, especially nuclear weapons. They sometimes admit
that war against Iraq might be costly, might lead to a lengthy U.S.
occupation, and might complicate U.S. relations with other countries.
But these concerns are eclipsed by the belief that the combination of
Saddam plus nuclear weapons is too dangerous to accept. For that reason
alone, he has to go.
Even many opponents of preventive war seem to agree deterrence will not
work in Iraq. Instead of invading Iraq and overthrowing the regime,
however, these moderates favor using the threat of war to compel Saddam
to permit new weapons inspections. Their hope is that inspections will
eliminate any hidden WMD stockpiles and production facilities and ensure
Saddam cannot acquire any of these deadly weapons. Thus, both the
hard-line preventive-war advocates and the more moderate supporters of
inspections accept the same basic premise: Saddam Hussein is not
deterrable, and he cannot be allowed to obtain a nuclear arsenal.
One problem with this argument: It is almost certainly wrong. The belief
that Saddam’s past behavior shows he cannot be contained rests on
distorted history and faulty logic. In fact, the historical record shows
that the United States can contain Iraq effectively—even if Saddam has
nuclear weapons—just as it contained the Soviet Union during the Cold
War. Regardless of whether Iraq complies with U.N. inspections or what
the inspectors find, the campaign to wage war against Iraq rests on a
flimsy foundation.
Is Saddam a Serial Aggressor? Those who call for preventive war begin by
portraying Saddam as a serial aggressor bent on dominating the Persian
Gulf. The war party also contends that Saddam is either irrational or
prone to serious miscalculation, which means he may not be deterred by
even credible threats of retaliation. Kenneth Pollack, former director
for gulf affairs at the National Security Council and a proponent of war
with Iraq, goes so far as to argue that Saddam is “unintentionally
suicidal.”
The facts, however, tell a different story. Saddam has dominated Iraqi
politics for more than 30 years. During that period, he started two wars
against his neighbors—Iran in 1980 and Kuwait in 1990. Saddam’s record
in this regard is no worse than that of neighboring states such as Egypt
or Israel, each of which played a role in starting several wars since
1948. Furthermore, a careful look at Saddam’s two wars shows his
behavior was far from reckless. Both times, he attacked because Iraq was
vulnerable and because he believed his targets were weak and isolated.
In each case, his goal was to rectify Iraq’s strategic dilemma with a
limited military victory. Such reasoning does not excuse Saddam’s
aggression, but his willingness to use force on these occasions hardly
demonstrates that he cannot be deterred.
The Iran-Iraq War, 1980–88 Iran was the most powerful state in the
Persian Gulf during the 1970s. Its strength was partly due to its large
population (roughly three times that of Iraq) and its oil reserves, but
it also stemmed from the strong support the shah of Iran received from
the United States. Relations between Iraq and Iran were quite hostile
throughout this period, but Iraq was in no position to defy Iran’s
regional dominance. Iran put constant pressure on Saddam’s regime during
the early 1970s, mostly by fomenting unrest among Iraq’s sizable Kurdish
minority. Iraq finally persuaded the shah to stop meddling with the
Kurds in 1975, but only by agreeing to cede half of the Shatt al-Arab
waterway to Iran, a concession that underscored Iraq’s weakness.
It is thus not surprising that Saddam welcomed the shah’s ouster in
1979. Iraq went to considerable lengths to foster good relations with
Iran’s revolutionary leadership. Saddam did not exploit the turmoil in
Iran to gain strategic advantage over his neighbor and made no attempt
to reverse his earlier concessions, even though Iran did not fully
comply with the terms of the 1975 agreement. Ruhollah Khomeini, on the
other hand, was determined to extend his revolution across the Islamic
world, starting with Iraq. By late 1979, Tehran was pushing the Kurdish
and Shiite populations in Iraq to revolt and topple Saddam, and Iranian
operatives were trying to assassinate senior Iraqi officials. Border
clashes became increasingly frequent by April 1980, largely at Iran’s
instigation.
Facing a grave threat to his regime, but aware that Iran’s military
readiness had been temporarily disrupted by the revolution, Saddam
launched a limited war against his bitter foe on September 22, 1980. His
principal aim was to capture a large slice of territory along the
Iraq-Iran border, not to conquer Iran or topple Khomeini. “The war
began,” as military analyst Efraim Karsh writes, “because the weaker
state, Iraq, attempted to resist the hegemonic aspirations of its
stronger neighbor, Iran, to reshape the regional status quo according to
its own image.”
Iran and Iraq fought for eight years, and the war cost the two
antagonists more than 1 million casualties and at least $150 billion.
Iraq received considerable outside support from other
countries—including the United States, Kuwait, Saudi Arabia, and
France—largely because these states were determined to prevent the
spread of Khomeini’s Islamic revolution. Although the war cost Iraq far
more than Saddam expected, it also thwarted Khomeini’s attempt to topple
him and dominate the region. War with Iran was not a reckless adventure;
it was an opportunistic response to a significant threat.
The Gulf War, 1990–91 But what about Iraq’s invasion of Kuwait in August
1990? Perhaps the earlier war with Iran was essentially defensive, but
surely this was not true in the case of Kuwait. Doesn’t Saddam’s
decision to invade his tiny neighbor prove he is too rash and aggressive
to be trusted with the most destructive weaponry? And doesn’t his
refusal to withdraw, even when confronted by a superior coalition,
demonstrate he is “unintentionally suicidal”?
The answer is no. Once again, a careful look shows Saddam was neither
mindlessly aggressive nor particularly reckless. If anything, the
evidence supports the opposite conclusion.
Saddam’s decision to invade Kuwait was primarily an attempt to deal with
Iraq’s continued vulnerability. Iraq’s economy, badly damaged by its war
with Iran, continued to decline after that war ended. An important cause
of Iraq’s difficulties was Kuwait’s refusal both to loan Iraq $10
billion and to write off debts Iraq had incurred during the Iran-Iraq
War. Saddam believed Iraq was entitled to additional aid because the
country helped protect Kuwait and other Gulf states from Iranian
expansionism. To make matters worse, Kuwait was overproducing the quotas
set by the Organization of Petroleum Exporting Countries, which drove
down world oil prices and reduced Iraqi oil profits. Saddam tried using
diplomacy to solve the problem, but Kuwait hardly budged. As Karsh and
fellow Hussein biographer Inari Rautsi note, the Kuwaitis “suspected
that some concessions might be necessary, but were determined to reduce
them to the barest minimum.”
Saddam reportedly decided on war sometime in July 1990, but before
sending his army into Kuwait, he approached the United States to find
out how it would react. In a now famous interview with the Iraqi leader,
U.S. Ambassador April Glaspie told Saddam, “[W]e have no opinion on the
Arab-Arab conflicts, like your border disagreement with Kuwait.” The
U.S. State Department had earlier told Saddam that Washington had “no
special defense or security commitments to Kuwait.” The United States
may not have intended to give Iraq a green light, but that is
effectively what it did.
Saddam invaded Kuwait in early August 1990. This act was an obvious
violation of international law, and the United States was justified in
opposing the invasion and organizing a coalition against it. But
Saddam’s decision to invade was hardly irrational or reckless.
Deterrence did not fail in this case; it was never tried.
But what about Saddam’s failure to leave Kuwait once the United States
demanded a return to the status quo ante? Wouldn’t a prudent leader have
abandoned Kuwait before getting clobbered? With hindsight, the answer
seems obvious, but Saddam had good reasons to believe hanging tough
might work. It was not initially apparent that the United States would
actually fight, and most Western military experts predicted the Iraqi
army would mount a formidable defense. These forecasts seem foolish
today, but many people believed them before the war began.
Once the U.S. air campaign had seriously damaged Iraq’s armed forces,
however, Saddam began searching for a diplomatic solution that would
allow him to retreat from Kuwait before a ground war began. Indeed,
Saddam made clear he was willing to pull out completely. Instead of
allowing Iraq to withdraw and fight another day, then U.S. President
George H.W. Bush and his administration wisely insisted the Iraqi army
leave its equipment behind as it withdrew. As the administration had
hoped, Saddam could not accept this kind of deal.
Saddam undoubtedly miscalculated when he attacked Kuwait, but the
history of warfare is full of cases where leaders have misjudged the
prospects for war. No evidence suggests Hussein did not weigh his
options carefully, however. He chose to use force because he was facing
a serious challenge and because he had good reasons to think his
invasion would not provoke serious opposition.
Nor should anyone forget that the Iraqi tyrant survived the Kuwait
debacle, just as he has survived other threats against his regime. He is
now beginning his fourth decade in power. If he is really
“unintentionally suicidal,” then his survival instincts appear to be
even more finely honed.
History provides at least two more pieces of evidence that demonstrate
Saddam is deterrable. First, although he launched conventionally armed
Scud missiles at Saudi Arabia and Israel during the Gulf War, he did not
launch chemical or biological weapons at the coalition forces that were
decimating the Iraqi military. Moreover, senior Iraqi
officials—including Deputy Prime Minister Tariq Aziz and the former head
of military intelligence, General Wafiq al-Samarrai—have said that Iraq
refrained from using chemical weapons because the Bush Sr.
administration made ambiguous but unmistakable threats to retaliate if
Iraq used WMD. Second, in 1994 Iraq mobilized the remnants of its army
on the Kuwaiti border in an apparent attempt to force a modification of
the U.N. Special Commission’s (UNSCOM) weapons inspection regime. But
when the United Nations issued a new warning and the United States
reinforced its troops in Kuwait, Iraq backed down quickly. In both
cases, the allegedly irrational Iraqi leader was deterred.

Saddam’s Use of Chemical Weapons Preventive-war advocates also use a
second line of argument. They point out that Saddam has used WMD against
his own people (the Kurds) and against Iran and that therefore he is
likely to use them against the United States. Thus, U.S. President
George W. Bush recently warned in Cincinnati that the Iraqi WMD threat
against the United States “is already significant, and it only grows
worse with time.” The United States, in other words, is in imminent danger.
Saddam’s record of chemical weapons use is deplorable, but none of his
victims had a similar arsenal and thus could not threaten to respond in
kind. Iraq’s calculations would be entirely different when facing the
United States because Washington could retaliate with WMD if Iraq ever
decided to use these weapons first. Saddam thus has no incentive to use
chemical or nuclear weapons against the United States and its allies—
unless his survival is threatened. This simple logic explains why he did
not use WMD against U.S. forces during the Gulf War and has not fired
chemical or biological warheads at Israel.
Furthermore, if Saddam cannot be deterred, what is stopping him from
using WMD against U.S. forces in the Persian Gulf, which have bombed
Iraq repeatedly over the past decade? The bottom line: Deterrence has
worked well against Saddam in the past, and there is no reason to think
it cannot work equally well in the future.
President Bush’s repeated claim that the threat from Iraq is growing
makes little sense in light of Saddam’s past record, and these
statements should be viewed as transparent attempts to scare Americans
into supporting a war. CIA Director George Tenet flatly contradicted the
president in an October 2002 letter to Congress, explaining that Saddam
was unlikely to initiate a WMD attack against any U.S. target unless
Washington provoked him. Even if Iraq did acquire a larger WMD arsenal,
the United States would still retain a massive nuclear retaliatory
capability. And if Saddam would only use WMD if the United States
threatened his regime, then one wonders why advocates of war are trying
to do just that.
Hawks do have a fallback position on this issue. Yes, the United States
can try to deter Saddam by threatening to retaliate with massive force.
But this strategy may not work because Iraq’s past use of chemical
weapons against the Kurds and Iran shows that Saddam is a warped human
being who might use WMD without regard for the consequences.
Unfortunately for those who now favor war, this argument is difficult to
reconcile with the United States’ past support for Iraq, support that
coincided with some of the behavior now being invoked to portray him as
an irrational madman. The United States backed Iraq during the
1980s—when Saddam was gassing Kurds and Iranians—and helped Iraq use
chemical weapons more effectively by providing it with satellite imagery
of Iranian troop positions. The Reagan administration also facilitated
Iraq’s efforts to develop biological weapons by allowing Baghdad to
import disease-producing biological materials such as anthrax, West Nile
virus, and botulinal toxin. A central figure in the effort to court Iraq
was none other than current U.S. Defense Secretary Donald Rumsfeld, who
was then President Ronald Reagan’s special envoy to the Middle East. He
visited Baghdad and met with Saddam in 1983, with the explicit aim of
fostering better relations between the United States and Iraq. In
October 1989, about a year after Saddam gassed the Kurds, President
George H.W. Bush signed a formal national security directive declaring,
“Normal relations between the United States and Iraq would serve our
longer-term interests and promote stability in both the Gulf and the
Middle East.”
If Saddam’s use of chemical weapons so clearly indicates he is a madman
and cannot be contained, why did the United States fail to see that in
the 1980s? Why were Rumsfeld and former President Bush then so
unconcerned about his chemical and biological weapons? The most likely
answer is that U.S. policymakers correctly understood Saddam was
unlikely to use those weapons against the United States and its allies
unless Washington threatened him directly. The real puzzle is why they
think it would be impossible to deter him today.
Saddam With Nukes The third strike against a policy of containment,
according to those who have called for war, is that such a policy is
unlikely to stop Saddam from getting nuclear weapons. Once he gets them,
so the argument runs, a host of really bad things will happen. For
example, President Bush has warned that Saddam intends to “blackmail the
world”; likewise, National Security Advisor Condoleezza Rice believes he
would use nuclear weapons to “
blackmail the entire international community.” Others fear a nuclear
arsenal would enable Iraq to invade its neighbors and then deter the
United States from ousting the Iraqi army as it did in 1991. Even worse,
Saddam might surreptitiously slip a nuclear weapon to al Qaeda or some
like-minded terrorist organization, thereby making it possible for these
groups to attack the United States directly.
The administration and its supporters may be right in one sense:
Containment may not be enough to prevent Iraq from acquiring nuclear
weapons someday. Only the conquest and permanent occupation of Iraq
could guarantee that. Yet the United States can contain a nuclear Iraq,
just as it contained the Soviet Union. None of the nightmare scenarios
invoked by preventive-war advocates are likely to happen.
Consider the claim that Saddam would employ nuclear blackmail against
his adversaries. To force another state to make concessions, a
blackmailer must make clear that he would use nuclear weapons against
the target state if he does not get his way. But this strategy is
feasible only if the blackmailer has nuclear weapons but neither the
target state nor its allies do.
If the blackmailer and the target state both have nuclear weapons,
however, the blackmailer’s threat is an empty one because the
blackmailer cannot carry out the threat without triggering his own
destruction. This logic explains why the Soviet Union, which had a vast
nuclear arsenal for much of the Cold War, was never able to blackmail
the United States or its allies and did not even try.
But what if Saddam invaded Kuwait again and then said he would use
nuclear weapons if the United States attempted another Desert Storm?
Again, this threat is not credible. If Saddam initiated nuclear war
against the United States over Kuwait, he would bring U.S. nuclear
warheads down on his own head. Given the choice between withdrawing or
dying, he would almost certainly choose the former. Thus, the United
States could wage Desert Storm II against a nuclear-armed Saddam without
precipitating nuclear war.
Ironically, some of the officials now advocating war used to recognize
that Saddam could not employ nuclear weapons for offensive purposes. In
the January/February 2000 issue of Foreign Affairs, for example,
National Security Advisor Rice described how the United States should
react if Iraq acquired WMD. “The first line of defense,” she wrote,
“should be a clear and classical statement of deterrence—if they do
acquire WMD, their weapons will be unusable because any attempt to use
them will bring national obliteration.” If she believed Iraq’s weapons
would be unusable in 2000, why does she now think Saddam must be toppled
before he gets them? For that matter, why does she now think a nuclear
arsenal would enable Saddam to blackmail the entire international
community, when she did not even mention this possibility in 2000?
What About Nuclear Handoff? Of course, now the real nightmare scenario
is that Saddam would give nuclear weapons secretly to al Qaeda or some
other terrorist group. Groups like al Qaeda would almost certainly try
to use those weapons against Israel or the United States, and so these
countries have a powerful incentive to take all reasonable measures to
keep these weapons out of their hands.
However, the likelihood of clandestine transfer by Iraq is extremely
small. First of all, there is no credible evidence that Iraq had
anything to do with the terrorist attacks against the World Trade Center
and the Pentagon or more generally that Iraq is collaborating with al
Qaeda against the United States. Hawks inside and outside the Bush
administration have gone to extraordinary lengths over the past months
to find a link, but they have come up empty-handed.
The lack of evidence of any genuine connection between Saddam and al
Qaeda is not surprising because relations between Saddam and al Qaeda
have been quite poor in the past. Osama bin Laden is a radical
fundamentalist (like Khomeini), and he detests secular leaders like
Saddam. Similarly, Saddam has consistently repressed fundamentalist
movements within Iraq. Given this history of enmity, the Iraqi dictator
is unlikely to give al Qaeda nuclear weapons, which it might use in ways
he could not control.
Intense U.S. pressure, of course, might eventually force these unlikely
allies together, just as the United States and Communist Russia became
allies during World War II. Saddam would still be unlikely to share his
most valuable weaponry with al Qaeda, however, because he could not be
confident it would not be used in ways that place his own survival in
jeopardy. During the Cold War, the United States did not share all its
WMD expertise with its own allies, and the Soviet Union balked at giving
nuclear weapons to China despite their ideological sympathies and
repeated Chinese requests. No evidence suggests Saddam would act
differently.
Second, Saddam could hardly be confident that the transfer would go
undetected. Since September 11, U.S. intelligence agencies and those of
its allies have been riveted on al Qaeda and Iraq, paying special
attention to finding links between them. If Iraq possessed nuclear
weapons, U.S. monitoring of those two adversaries would be further
intensified. To give nuclear materials to al Qaeda, Saddam would have to
bet he could elude the eyes and ears of numerous intelligence services
determined to catch him if he tries a nuclear handoff. This bet would
not be a safe one.
But even if Saddam thought he could covertly smuggle nuclear weapons to
bin Laden, he would still be unlikely to do so. Saddam has been trying
to acquire these weapons for over 20 years, at great cost and risk. Is
it likely he would then turn around and give them away? Furthermore,
giving nuclear weapons to al Qaeda would be extremely risky for
Saddam—even if he could do so without being detected—because he would
lose all control over when and where they would be used. And Saddam
could never be sure the United States would not incinerate him anyway if
it merely suspected he had made it possible for anyone to strike the
United States with nuclear weapons. The U.S. government and a clear
majority of Americans are already deeply suspicious of Iraq, and a
nuclear attack against the United States or its allies would raise that
hostility to fever pitch. Saddam does not have to be certain the United
States would retaliate to be wary of giving his nuclear weapons to al
Qaeda; he merely has to suspect it might.
In sum, Saddam cannot afford to guess wrong on whether he would be
detected providing al Qaeda with nuclear weapons, nor can he afford to
guess wrong that Iraq would be spared if al Qaeda launched a nuclear
strike against the United States or its allies. And the threat of U.S.
retaliation is not as far-fetched as one might think. The United States
has enhanced its flexible nuclear options in recent years, and no one
knows just how vengeful Americans might feel if WMD were ever used
against the U.S. homeland. Indeed, nuclear terrorism is as dangerous for
Saddam as it is for Americans, and he has no more incentive to give al
Qaeda nuclear weapons than the United States does—unless, of course, the
country makes clear it is trying to overthrow him. Instead of attacking
Iraq and giving Saddam nothing to lose, the Bush administration should
be signaling it would hold him responsible if some terrorist group used
WMD against the United States, even if it cannot prove he is to blame.
Vigilant Containment It is not surprising that those who favor war with
Iraq portray Saddam as an inveterate and only partly rational aggressor.
They are in the business of selling a preventive war, so they must try
to make remaining at peace seem unacceptably dangerous. And the best way
to do that is to inflate the threat, either by exaggerating Iraq’s
capabilities or by suggesting horrible things will happen if the United
States does not act soon. It is equally unsurprising that advocates of
war are willing to distort the historical record to make their case. As
former U.S. Secretary of State Dean Acheson famously remarked, in
politics, advocacy “must be clearer than truth.”
In this case, however, the truth points the other way. Both logic and
historical evidence suggest a policy of vigilant containment would work,
both now and in the event Iraq acquires a nuclear arsenal. Why? Because
the United States and its regional allies are far stronger than Iraq.
And because it does not take a genius to figure out what would happen if
Iraq tried to use WMD to blackmail its neighbors, expand its territory,
or attack another state directly. It only takes a leader who wants to
stay alive and who wants to remain in power. Throughout his lengthy and
brutal career, Saddam Hussein has repeatedly shown that these two goals
are absolutely paramount. That is why deterrence and containment would
work.
If the United States is, or soon will be, at war with Iraq, Americans
should understand that a compelling strategic rationale is absent. This
war would be one the Bush administration chose to fight but did not have
to fight. Even if such a war goes well and has positive long-range
consequences, it will still have been unnecessary. And if it goes badly—
whether in the form of high U.S. casualties, significant civilian
deaths, a heightened risk of terrorism, or increased hatred of the
United States in the Arab and Islamic world—then its architects will
have even more to answer for.

----- Original Message -----

From: Gunnar Tomasson

To: gang8@yahoogroups.com

Sent: Friday, January 03, 2003 1:46 PM

Subject: Re: [gang8] Keynesian apologists and the "General Theory"

 

Dear Geoffrey:

 

Re. the following:

 

One can, as Gunnar constantly proves, tease brilliant stuff from Keynes’ writings but what rubbish one has to wade through.

 

Comment:

 

Agree - the collected works and papers of Keynes published by the Royal Economic Society run to 30 plus volumes.

 

I had access to them in what Professor Haberler rated as the best economics library around - the Joint IMF-World Bank Library.

 

But the trick with Keynes - as with Jeremy Bentham, who first gave a lucid presentation of Creditary Principles - is not to read him in search of enlightenment.

 

In this respect, it was my good fortune to have spent 10 years at the IMF, including 5 years in economic policy advisory capacity in Indonesia, the Khmer Republic, and South Viet-Nam from the time I completed the General Exam for the Ph. D. at Harvard till I returned my attention to theoretical economics in connection with my Ph. D. thesis work.

 

That is to say, I had developed a good instinct for distinguishing sense and nonsense in economics when I got into serious reading of Keynes. 

 

Thus, my experience with reading Keynes accords with Isaac Stern's advice to young would-be violin-players: "Practice, practice, practice - and then, and only then, can you let your imagination take flight."

 

In my own case, my imagination was set to take flight when I began to study Keynes, permitting me to flip through and skip massive amounts of his writings which, at a glance, I judged not to be likely sources of insight into his monetary thinking along Creditary Lines.

 

Alas, my specific modus operandi in this respect is not an option for young would-be economic scholars because of the Publish-or-Perish mentality which governs their early progress en route to tenure several years down the road.

 

That, I submit, is the reason why Gang8 - a mix of talent of all sorts out to clear their own thinking rather than score debating points - has been able to make progress in the field of monetary economics, where conventional economic scholarship has been stuck in a rut for the past seven decades.

 

And, while all of us have healthy egos - with occasional friction - we have been able to place Cause above Ego.

 

That, Chris, is what I call the "vision" thing.

 

Gunnar

----- Original Message -----

From: Gunnar Tomasson

To: gang8@yahoogroups.com

Sent: Friday, January 03, 2003 2:23 PM

Subject: Re: [gang8] Keynesian apologists and the "General Theory"

P.S.  Re. the following:

 

Keynes’ best intellectual qualification was that he was twelfth wrangler in maths, but he had a hell of a lot of coaching from his dad.

 

Comment:

 

Not quite.

 

Keynes worked for a number of years on his Treatise on Probability, which Bertrand Russell - in My Philosophical Development written late in life - described as "an extremely able work".

 

And, of course, work on probability theory takes one into some of the deepest and near-impassable reaches of physics.

 

In my view, that is where Keynes' cut his intellectual teeth, honing his abstract reasoning faculty to a point far superior to that of any other 20th century economist.

 

Gunnar

 

----- Original Message -----

From: ChrisOfDulwich@...

To: gang8@yahoogroups.com

Sent: Friday, January 03, 2003 5:08 PM

Subject: [gang8] Shouting

.

Gunnar:
I had not realised that the over-excitable fellow you quoted on Keynes - and for all his protestations of "rubbish", the original statements about Keynes have been born out in exhaustive analysis by the Gang - was no less a figure than the "Editor" of PKT.

If that's their chief honcho, what in heaven's name are their foot soldiers like?  Even lesser academics?

Chris