Welby’s hero Keynes lost nearly everything in the 1929 crash
By Jules Gomes
April 9, 2017
Dethroning Mammon is the Archbishop of Canterbury’s Lent book for 2017. It should be renamed Dethroning Liberty, Free Enterprise and Economic Freedom. The book is subtitled Making Money Serve Grace. A more apt subtitle would read Enthroning Big Government, State Interventionism, and the Welfare State. During these forty days of Lent, Justin Portal Welby has been preaching the gospel of John Maynard Keynes.
I have long suspected “Wonga” Welby of being a closet Keynesian. Welby shares the elitism of Keynes’s upbringing, the elitism of an Eton education and the elitism of the Cambridge cloister. ‘Another Keynes is needed,’ exclaims Welby, doing his John-the-Baptist-imitation and dusting off crumbs of freeze-dried organic locusts from his Lambeth Lenten breakfast. He claims that Keynes’s economic vision was ‘embedded in ethics, representing a vision for an economically and relationally functioning world.’ But didn’t Keynes divorce ethics from morality?
He lauds Keynes for trashing thrift and savings. Why? Because since Keynes ‘it has been recognised that, rather than spending, the very wealthy choose to save more (what Keynes called ‘hoarding’) and preserve their wealth.’ Tell that to my father and his generation of low-income pensioners—who built their lives on the financial prudence of thrift. Welby has praised Keynes in his Bible Reading Notes. In an interview with the Guardian, he quotes a letter from Keynes to Virginia Woolf. In another piece, he pits Keynes against Friedman. While Keynes ‘took the view of abundance and grace as his world view,’ Friedman’s ‘exchange and equivalence ideas now dominates all of our thinking.’
Welby is careful not to unveil the anti-Christian aspects of Keynes’s worldview. In an autobiographical essay, Keynes admitted, ‘We repudiated entirely customary morals, conventions and traditional wisdom. We were, that is to say, in the strict sense of the term, immoralists. The consequences of being found out had, of course, to be considered for what they were worth. But we recognised no moral obligation on us, no inner sanction, to conform or to obey. Before heaven we claimed to be our judge in our own case.’ Keynes ends the passage with the sentence, ‘I remain, and will always remain, an immoralist.’ So why is Welby enthroning Keynes as the Christ who is the saviour of our economy?
Does the Archbishop regard him as a prophet? Keynes’ earlier prediction under Chancellor Winston Churchill in 1925, warning that deflation would force Britain to reduce real wages and retard economic growth, was fulfilled. However, his 1926 prophecy ‘We will not have any more crashes in our time,’ was followed by the Great Depression of 1929. Keynes invested his money heavily in stocks and commodities. The 1929 crash almost entirely wiped out his portfolio and he suffered enormous commodity losses.
Keynes’ disillusionment with capitalism led him to adopt the Freudian thesis that moneymaking was a neurosis. What Welby labels “Mammon,” Keynes called a ‘somewhat disgusting morbidity, one of the semi-criminal, semi-pathological propensities which one hands over with a shudder to specialists in mental disease.’ Welby shares the Keynesian pessimistic view of the market, which he claims ‘is not as rational or informed as it appears. Rather, it is the emotional conclusion of a particular view of supply and demand over a specific period.’ He acknowledges that even though ‘often the result is fair’ the market ‘can also cause human suffering on an unacceptable, but often invisible, scale.’ Keynes, who rejected the classical notion that the capitalist system is self-adjusting over the long run,’ would have cheered Welby’s laying the blame on ‘a banking system that was both out of control and uncontrollable.’
Given the emphasis of the book of Proverbs and other wisdom literature of the Bible on savings—it is astonishing that Welby would support an economist who called savings ‘absurd’ and asserted that if ‘you save five shillings, you put a man out of work for a day.’ Keynes even called on British housewives to go on a spending spree and government to go on a building binge.
Welby begins his book by talking about the Kingdom of God—the vision of God’s final rule; but proceeds to peddle the vision of a utopian millennialist who dreamed of a world where ‘by progressively expanding credit to promote full employment, the universal economic problem of scarcity would finally be overcome. Interest rates would fall to zero and mankind would re-enter the Garden of Eden,’ as Mark Skousen observes in his study of Keynes. But did Keynes have a long-term vision for the common good? If so, we are not sure what he meant when he famously said, ‘In the long run we are all dead.’ Surely that is not a Christian vision of the future?
The problem with a Christian vision of the present is inequality, according to Welby, which is caused by the wealthy stashing their loot. Welby is an Equality Evangelist who has a problem with inequality.
‘Inequality has grown more and more sharply in the Western world, in almost every society, and particularly over the past thirty years.’ In a previous article “Does Inequality Really Matter?” he asks, ‘is it possible where there is gross inequality, for equality in worship and fellowship to be maintained?’
But if everyone in a worshipping community has enough to supply their needs—why should I envy someone who has a Bentley? Economic equality is not a biblical virtue. Justice is. And justice is not qualified as “social justice.” It is simply justice. Welby’s category mistake is comparing a mercantile or peasant economy with a capitalist economy. Sadly, it is a mistake made by many preachers who use the Bible to bolster their attacks on capitalism.
I wonder what Welby would make of Jesus’s parable of the minas (pounds) where a nobleman calls ten of his servants and giving them one mina each (about three months’ wages) telling them, ‘Engage in business until I come (Luke 19:13). The servant who earns 1,000 per cent profit is rewarded the most.
The nobleman gives him authority over ten cities. The servant who makes five more minas receives authority over five cities. The servant who makes no profit is rebuked. ‘Why then did you not put my money in the bank, and at my coming I might have collected it with interest?’ the nobleman tells him. The parable abounds with themes of profit, saving, interest, and above all there is equality of opportunity but inequality of outcome! I bet it’s not the archbishop’s favourite parable.
As we begin Holy Week, it might be of some spiritual benefit for the Archbishop of Canterbury to dethrone John Maynard Keynes from his cathedra and to read other economists who have a more Christian view of poverty and wealth. Perhaps, the black economist Thomas Sowell’s Controversial Essays might do for Welby’s Easter reading.
Sowell elegantly frames the issue: ‘What do the poor most need? They need to stop being poor. And how can that be done, on a mass scale, except by an economy that creates vastly more wealth? Yet the political left has long had a remarkable lack of interest in how wealth is created. As far as they are concerned, wealth exists somehow, and the only interesting question is how to redistribute it.’ Today is Palm Sunday, Your Grace! Don’t confuse the donkey with the Messiah in the procession to Jerusalem! Here endeth the lesson.
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