Understanding Inflation, Part V

Consistent with what appears to be an adamantine adherence to the tenets of Fabian socialism and the Currency Principle, John Maynard Keynes advocated “full employment” as the primary goal of economic policy. Full employment would be achieved by means of inflation-funded economic growth, government control of the economy, and the “euthanasia of the rentier,” those whom Keynes referred to as “functionless investors” — people who produce with their capital for their own consumption instead of to accumulate more wealth by reinvestment.

The goal of full employment is easy to understand. Keynesian economics is descended from the economics of David Ricardo, whose “labor theory of value” postulated human labor as the sole factor of production. That being the case, wages paid for labor are the only legitimate source of income.

As for inflation-funded growth, although some authorities mistakenly categorize Keynesian economics as Banking Principle or Banking School due to Keynesianism’s reliance on misuse of the banking system to issue what amounts to counterfeit money, i.e., money representing wealth not owned by the issuer, it is Currency Principle. Again, somewhat oversimplified, the Currency Principle is that the quantity of money determines the level of economic activity; that “money” consists exclusively of existing accumulations of savings, defining savings as the excess of production over consumption.

That being the case, the more money in circulation, the better, whether it represents existing or future…