Bretton Woods revisited

Bretton Woods achieved its fame as the place where the IMF was set up in 1944. One of the persons present was Lord John Maynard Keynes, the British economist. As one who has studied some of the ideas of J.M. Keynes, I have not quite accepted all of the bad press that he now receives. It seems that George Monbiot agrees, that the Keynes proposal was probably better than the one that set up the IMF. I am not in a position to agree or disagree on that point.

The meetings by the IMF at Bretton Woods continue to this day, and the latest meeting was in fact preceded by a secret meeting of Soros conspirators. Arlen Williams writes about the people who attended the latest IMF meeting as well as about the ones who are cahoots with George Soros.  It seems that George Soros is the invisible figure behind the push to introduce a world currency. To do that he needs to collapse some world currencies including the Euro and the U.S. dollar.

Here is a snippet from the article at Big Government:

So, just how snugly does Soros’ conference fit in this sandwich and what are the tactical solutions they all so collectively seek? One set of hints has been provided by Soros’ right hand man, Jeffrey Sachs. As reported by Aaron Klein, Jeff is seeking a brave, immediate future including global taxation, currency transfer tax, tax on the rental value of land and natural resources, royalties on worldwide “fossil energy projection,” fees for the commercial use of oceans, for air flight, of course for putting carbon in the air, and even fees for the use of “the electromagnetic spectrum.” Oh, and he also envisions chronic economic stagnation, unemployment and labor revolt. The proletariat have to do their part.

This forecast (and the coming burst of that hush-hushed insolvency bubble and ensuing hyperinflation and possibly, famine) is underscored by Soros’ own recent moves to commandeer as many American grain elevators as feasible. Not to worry though, the Marxtream media tell us he is one of our greatest philanthropists, along with so many of the IMF and World Bank lords, to be sure. And here we thought Demon-I-mean-Damien-er, Damon Silvers doesn’t trust rich people.

6 responses to “Bretton Woods revisited

  1. Still very busy – but this is my all time favorite subject – you throw me a hanging curve – and I just HAVE to take a swing at it – – –

    1. In my view, JMK, is the worst economic evil ever perpetrated on the planet. (Aussie – We have discussed this before on your other blog and I know that your view is that the downstream woes were mostly due to his evil disciples and not him. I agree with at least one or two of his disciples were worse than him. But he and his theories enabled them.)

    2. The comment that JMK’s proposals were better than others in regards IMF is what I would call “damning with faint praise”. It is like Chris Dodd, Barney Frank, and Maxine Waters all got in the same room and one of them had an idea that was slightly less insane than the others. So they get to be the hero?

    3. The problem with JMK’s theories are legion. But you don’t have to get into the gory details to understand why it is ALL WRONG, regardless of the details:

    a. It promotes MASSIVE government intrusion into capital markets and private enterprise.

    b. It is a Ponzi scheme of national (or even world!) proportions. It REQUIRES ongoing inflation to work.

    c. The theory is that a cadre of BENEVOLENT and CAPABLE “administrators” continually twist the knobs on The Great Economic Machine for it to work.

    1) Not realizing that when dealing with this much money, NOBODY is benevolent or altruistic.

    2) Not realizing that the machine is so complex that a galaxy full of Einstein’s could not be sufficiently capable.

    3) Not accepting that capital markets are full of beneficial feedback loops that make it largely self-correcting. (Think of trying to keep a golf ball centered near the lowest point of a steep rounded bowl – now contrarily, think of trying to keep a golf ball centered near the apex of a cone.)

    d. The nub of JMK ‘insight’ is that the equilibrium of a capital market is not ideal and it fluctuates – and that there is a potentially better outcome. So far, he is at least partially correct and astute. He then went on to identify an off-center peak that we should try to achieve. He sorely underestimated the skill and effort needed to stay on that peak.

    e. The bottom line is that the self-correcting markets are largely as good as you can get. “Smart people” like to look at things and speculate that things could be better. In theory, perhaps yes, but in practice, all we have learned is ways to make it worse while trying to make it better.

    4. Finally – America and it’s greatness were founded on pre-JMK economic policy. JMK economics was invented in the mid-30’s and by the time of Bretton Woods was already VERY SUSPICIOUS (but like Obamessiah, it promised unrealistic hope), yet triumphed at Bretton Woods. By the mid-to-late 50’s JMK theory had been thoroughly torn to shreds by the rival Austrian School of economics. So, now, guess which brand of economics is practiced by ALL the politicians and taught in ALL the universities? Guess what Zero is pumped full of?

    Are you beginning to get the drift?


  2. For those of you are new to the rivalry between Keynesian and Austrian Economics, please consider this note from Thomas E. Woods, Jr. – perhaps the most important and influential ‘Austrian’ currently writing. This is from his 2009 book “MELTDOWN – A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse”. The Henry Hazlitt mentioned is one of the great economic writers from the mid-late 20th century.

    See Henry Hazlitt, The Failure of the “New Economics”: An Analysis of the Keynesian Fallacies (Princeton, N.J.: D. Van Nostrand, 1.959), 3243. If you wish to observe one of the great twentieth-century cranks rebutted line by line, this book is indispensable. As a point-by-point refutation of Keynes’s General Theory it unfortunately lacks an overall critique of Keynes’s system, but all the same it is the most devastating demolition of one intellectual by another I have ever seen anywhere, and it will give you a new and healthy contempt for anyone who points to Keynes as an economist, or as having anything worthwhile to say on economics. For a more general critique of Keynes, see George Reisman, Capitalism, (Ottawa, Ill.: Jameson Books, 1996), ch. 18.


  3. Carlyle, I hear you, but I have always pointed out that Keynes worked and thought in a different period.
    The argument against Lord Keynes and the General Theory does nothing to address the shenanigans of the IMF and George Soros today.

    Keynesian theory itself was based upon a semi-industrialized world where we did not have free trade agreements.

    There are economists who are supposed to be the followers of Keynes, but they veer to the left, and Keynes himself, although on the left did not promote communism.

    It is very healthy in my opinion, to be able to take a theory such as the JMK General Theory of Money and Employment, and then take it apart via testing. I think it is very healthy to be able to study something in hindsight and then see what has worked and what has not worked.

    My criticism of the followers of JMK, or rather of the neo-Keynesians, is that they have failed to study and analyze the period of the 1960s and the 1970s when things changed dramatically. Economists such as Krugman refuse to acknowledge the stagflation of the 1970s. Yet, I learned of the term stagflation when I was studying economics at Melbourne University in the 1970s.

    What I am going to suggest is that the meltdown of 2008 was not due to the Keynesian economics but of other factors that were coming together with the direct intention of dragging down the economy of the USA. This takes nothing away from Thomas E. Woods Jr, because he is looking at one aspect and applying his knowledge to the situation. It means that the answer lies in an approach that looks at a much wider range of reasons for the meltdown.

    In fact I would go back to the 1960s and the rise of Communism in the USA as one particular source or factor. I would look at Alinsky as well as the Cloward-Piven strategy. I would also look at the way in which certain individuals in Congress actually helped to enable the present situation with poor legislation.

    The other issues that is not addressed by the attacks upon Keynes are the various bubbles, including the housing bubble. I do not blame Keynesian economics for the failure of the housing sector and mortgage finance. I blame the Cloward-Piven strategy.

    As for Keynes’ suggestion of a world currency or bancqo I do not know if it would have been a good or a bad thing. The IMF has had its uses, but the problem with the IMF is that it is staffed by a left-wing cadre of economists.

    What concerns me about the issues raisesd in the article that I posted concerns the behaviour of George Soros and his like-minded companions. I do not believe that Lord Keynes would have agreed with such antics.


  4. Many of your details and specifics I cannot disagree with. But it leads you to a place where you convince yourself that JMK was “not all that bad”. I just cannot accept that conclusion.

    I also believe that making the system overly complicated (by REQUIRING that a carefully balanced inflationary situation be in-play at all times) just makes it a ripe and fertile situation for the likes of Soros. A hands-off self-correcting system would be much harder for evil manipulators to “game”.

    BUT – I certainly appreciate a well-reasoned and professional response. We can all learn from dialog like that. And, it IS your area of professional expertise. I am only an avid amateur.

    But I am still sticking with my “austrians” all the way!

    PS – I love Ayn Rand and “objectivism” also.


  5. Carlyle, without having my old copy of Keynes’ book I cannot confirm that he ever advocated a slightly inflationary position.

    What I am saying is that many economists pretend to be following Keynes but in fact that have distorted the original ideas, adding in their own Marxist ideas.


  6. Carlyle, here is something else to consider, in the time of Keynes, in Great Britain, and also at least in Australia, the market forces were highly regulated, even though there was competition.

    A situation of perfect competition has never existed in the world. There has always been some form of regulations that impacts upon market forces. Then there is monopoly and oligopoly.

    Each type of market has its problems. In the oligopoly situation those already in the market try to keep others from joining. OPEC remains the best example of an oligopoly.

    When I was at university, I can remember how the unions tried to smash what they considered a situation where there was, according to them, a lack of competition. The ACTU purchased Burkes electrical store in order to smash the “competition”, by offering discounts. Well, this introduced other “discount” stores, but in the long run it makes business very tough. The real problem was not at the retail level but at the wholesale level because of the lack of competition with the variety of goods available for purchase. These goods have gotten cheaper, but only as there is an increase in competition at the wholesale level, and as consumers begin to spend the retail stores have increased. Do it the other way and it fails.

    I have not studied Hayek or Austrian economics, but that does not mean that I think Hayek is wrong. My contention is that you need to study Keynes in order to pick Keynes apart. This is what Keynes would expect from a good economist. However, people like Krugman who are allegedly neo-Keynesians do not actually examine the theory in detail. They regurgitate bits and pieces that suits their agenda.

    Regardless, this is off the point that I wanted to make in the piece – that is we need to keep an eye on the people behind the curtain, especially at the IMF and World Bank level. We need to be able to keep an eye on George Soros because I am certain that he is attempting to collapse the US economy. Also, I think that he is a Marxist and that he is conspiring with the Russians rather than with the Chinese (the Chinese are in fact more businesslike than the Russians)