Thoughts on economics and liberty

Tag: Fabian socialism

Land ‘reforms’ or state-sanctioned theft?

'The land ceiling is "a child of sadism"' – Rajaji

Gandhi said all when he made it clear that socialism should not achieve its ends by impure means. ‘Impure means will result in an impure end. Hence the prince and the peasant will not be equalled by cutting off the prince’s head nor can the process of cutting off equalise the employer and the employed. One cannot reach truth by untruthfulness […] Harbour impurity of mind or body and you have untruth or violence in you.’[i] But such niceties were completely lost on Nehru. His First Five-Year Plan articulated his socialist arguments to justify plundering those who held land bigger than a specified size, with the so-called ‘excess’ land being redistributed to the poor. This plan was implemented quickly, and by 1960 most states had introduced ceilings on land.
 
Despite its reformist title, land ‘reform’ legislation was anything but a reform. It was a completely regressive step.It created massive injustice in a so-called free society. Land reform was all about reparations for what the ancestors of our current zamindars had allegedly done. Land was therefore ‘legally’ taken away from people without recourse to a trial; from people who had not themselves committed any crime. This ‘reform’ was robbery on a grand scale. The state became the Big Thief. If the state legislates a theft it does not make it any less blameworthy. Plunder and crime are not valid merely because these are legislated by a mob of gangsters sitting in the parliament. That is exactly what mobocracies are all about – elected mobs. In a free society, on the other hand, majorities never misuse their parliamentary power to violate individual freedom.
 
But let us ask ourselves a question – what had India not achieved through its independence movement that it needed to attack innocent members of its society and divest them of their property without trial? Had we not already divested the princes of their monarchical powers and constructed a republic out of a primitive society? Had we not declared adult franchise and empowered the entire Indian community? Could we not have, through equal opportunity and the rule of law, made zamindars completely irrelevant?
 
In the extremely favourable environment for the advancement of freedom that existed just after independence under the tutelage of people like Gandhi, Sardar Patel and Rajaji, India had a golden opportunity to aspire for the world’s highest standards of governance. We had the opportunity to build a new culture of freedom and justice. That would have led us without fail to Nehru’s promised tryst with destiny; indeed, it would have led us to a tryst with greatness. But Nehru allowed the baser elements found in our country, those who belligerently bellow for plunder out of the sheer jealousy they experience upon seeing anyone with some wealth, to override the basic reason for our independence, namely, to achieve freedom and give us justice.
 
But a leader’s job is not to follow the mobs. His job is to lead. Nehru let us down very badly by attracting all kinds of thugs into politics. And the less said about his successors the better. Nehru was the best leader we have had in independent India’s government. It has been an even more downhill journey ever since.
 
So you ask what Nehru should have done, instead. He should have ensured that the yardstick of accountability was applied equally to each citizen, irrespective of the citizen’s social, cultural or economic background. By equally enforcing the rule of law, the evil of feudalism would have been wiped out in a decade without impinging on anyone’s freedom. The following are a couple of measures that could have been taken:
 
A strong police and judicial system would have ensured that if a zamindar had personally stolen someone’s lands, he would have been punished and the stolen lands returned. If some zamindar committed a murder or rape, that zamindar would have been immediately tried and given capital punishment – or at least jailed for life.[ii] Unfortunately, Nehru’s shoddy system of law and order allowed brutal, bully zamindars and anyone else with money to run amuck as never before.
 
Public finance is hard work, and setting up an effective and honest machinery to collect taxes from all people of a country is very challenging. But socialists have not bothered to build such a machinery that can reliably obtain an income tax return from all citizens of India. A strong land records system coupled with progressive taxes and a wealth tax could have transparently deployed the wealth in India to the public causes to strengthen infrastructure and provide equality of opportunity. But instead of taxing them, zamindars were rewarded by Nehruvian socialist governments with complete tax-exemption; and land revenue was discarded as a source of revenue. Today most people therefore evade taxes and make merry while the government spends time driving our buses and airplanes.
 
The greatest problem with Nehru’s approaches is that they fostered a great muddle in the minds of ordinary people about what is right and what is wrong. On the one hand Nehru encouraged his Ministers and bureaucrats to seize people’s so-called ‘excess’ lands. On the other he wanted corruption to stop. But if you confuse everyone about what is right and what is wrong, then why will corruption stop? And so Ministers and bureaucrats extorted money out of traders and manufacturers on the plea that they were taking away ‘excess’ money from these ‘capitalists’. When ethics are negated even in one case by our leaders, there is no stopping the decay of morals in a society. Corruption received a significant boost in Nehru’s time and has never looked back since. In brief, Nehru’s times – which continue till today – are best compared with those of France after its revolution of 1789. Frenzied mobs controlled the government in France after that violent revolution. Today, India is a mobocracy where the entire Parliament is united against freedom. India’s policy has been made for 60 years by socialist mobs driven by revenge, not by lovers of freedom and honesty.
 
In the midst of this wild loot and frenzy, every rich person, every trader, every money lender and every zamindar has been condemned sight unseen as an evil ‘capitalist’. But each individual must always be seen as the unique locus of individual responsibility. We may be rich or poor, often both in the same lifetime, but we must be individually accountable. Justice consciouslydenied by the state to even one of its citizens diminishes all of us. That, unfortunately, has happened for so long now, and in so many ways, that most of us have lost our sense of justice and ability to distinguish right from wrong. We condone corruption as a practical requirement of life; we vote for corrupt leaders; we give bribes; we take bribes. We have completely lost our way. India has lost its moral moorings. By breaking free of Nehru’s amoral regime, and by removing the immoral haze that blocks the sun from reaching India’s soul, we will once again be able to set our gaze on the lodestar of freedom. That star will then return us to our lost ethics and, more importantly, will return each of us to ourselves. We will find our lost self-respect once again, allowing us to completely renew our life; to be re-born as a different and better people.
 
As would be expected, under such moral anarchy, India’s land reform experience went to seed. Except for a few places like Kerala, where these reforms ‘worked’ (actually led to enormous fragmentation of land and loss of agricultural productivity), for the most part the so-called land ‘reform’ legislation could not be enforced. Not having strengthened the government’s machinery to enforce the rule of law, this socialist task of stealing land, too, failed, as any other task taken up by India’s governments. Since Nehru’s socialist functionaries[iii] were paid very poorly,[iv] given that there wasn’t much money left to pay them after ‘feeding’ loss-making public sector undertakings, they became easy prey to the manipulations, in self-defence, of the same feudal lords whose lands they were supposed to forcibly acquire. Landlords transferred their lands in the names of their dogs and cats with the connivance of local land revenue officials and police. To unearth the truth behind these ‘benaami’ deals would have required a machinery with honesty of purpose which the thoroughly corrupt socialist government could never possibly muster. Hence, virtually no land finally got ‘stolen’ by the Impotent ‘Big’ Thief.
 
Indeed, as a result of Nehru’s wasteful efforts, the feudal system remains as strong as ever before.Someone has rightly said that India is now a mix of ‘hypercapitalism’ and feudalism, with neither of these two being founded on any semblance of ethics. We won’t find it easy to build a free society in India today; for that would need a foundation of ethics which will now need many years to rebuild. Corruption has increased to such levels today that freedom will have to fight to get a foothold. The wrong ends (nationalized theft) and the wrong means (shoddy governance) have led to very wrong results. Just as integrity and morality are the hallmark of a society founded on freedom, so also subterfuge, hypocrisy, corruption and deceit are the hallmark of a collectivist socialist society founded on revenge.
 
Indira Gandhi, who had none of Nehru’s intellectual prowess, continued his mindless ‘justice of yesterday’ tirade. In 1971, during the process of brushing aside compensation for acquired land, she asked, ‘Compensation for what? Compensation for land […] for a palace or big house? […] what about compensation for injustice?’[v] The deadly seed of revenge that Nehru and various other Indian leaders have sown in India has by now morphed into our DNA. Incessant arguments on new ways to redistribute poverty, on how to drag back the wealthy and extract their wealth, swirl around in our disease-stricken heads. We are unable to think clearly any longer of the simple and morally clean arguments of freedom; of ethical ways of generating wealth for ourselves and for our society.

[This is an extract from my book, Breaking Free of Nehru.]


[i] In a written conversation with some socialists on a day of silence in 1947 when he communicated through writing on slips of paper; cited in Fisher, Louis, op. cit., p.306.

[ii] I have nothing against capital punishment being awarded in deserving cases. Mercy is never a virtue when innocent lives have been taken away brutally; it amounts to cowardice. Accountability is not driven by mercy – which is purely a matter for God to decide – but by individual justice.

[iii] Technically speaking, Nehru did not directly run the state administrations, which were under the State Governments. It was mostly Congress Governments that he was able to influence directly. But even non-Congress State Governments could easily be influenced in many ways by the powerful Centre.

[iv] The pitiable condition of police stations, judicial courts, revenue offices and that of ‘lower’ staff who are responsible for crucial functions has meant that corruption has perhaps become the sole lingua franca of the police and the revenue systems. Anyone with a bit of money can almost readily buy freedom, even after murder.

[v] Cited in Austin, Granville, op. cit., p.245.

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No property rights in India – its most potent indicator of lack of freedom

To Nehru, socialism was to be brought about by ‘the ending of private property, except in a restricted sense’.[i] The interpretation of this ‘restricted sense’ was left to his personal whims, making it difficult to pin down what he had in mind. Property rights are purely freedom-based; this is a capitalist concept. From John Kenneth Galbraith we know that Nehru’s views on property reflected the opinions of Harold Laski, a professor of political science at the London School of Economics. ‘The centre of Nehru’s thinking’, said Galbraith, ‘was Laski’, and ‘India the country most influenced by Laski’s ideas’.[ii] Maybe if we read Laski carefully we will understand what Nehru really meant by  ‘restricted sense’. Laski said:

[…] the existing rights of property represent, after all, but a moment in historic time. They are not today what they were yesterday and tomorrow they will again be different. It cannot be affirmed that, whatever the changes in social institutions, the rights of property are to remain permanently inviolate. Property is a social fact, like any other, and it is the character of social facts to alter.[iii]
Thus, Laski clearly did not recognize freedom as the supreme good. Hobbesian in approach, to him the state was supreme, with our role being to serve it and to be regulated by it. According to Laski, ‘The state […] is the crowning-point of the modern social edifice, and it is in its supremacy over all other forms of social groupings that its special nature is to be found’.[iv] But in the dictionary of freedom, the state is nowhere in that league. It is a creature of our convenience operated by governments paid to do our bidding. The state exists merely for our convenience;for the specific purpose of protecting our freedoms and enforcing the accountability that accompanies freedom. If the state does not guarantee our freedoms and property rights, we have no allegiance to that state – we will make another one, or leave.
 
In that sense, John F Kennedy was wrong when he said, ‘ask not what your country can do for you – ask what you can do for your country’.[v] In a free society, obligations lie with both parties. The state or country, represented by its government, must behave responsibly and defend our freedoms diligently in order to retain our allegiance and participation in dangerous enterprises like the defence of the land. A state loses legitimacy if it destroys the freedoms for which it was created. Laski’s arrogant state that believes it doesn’t have to protect our property rights and freedoms is destined to be a failed state. It will not only be defenceless against external aggression as its best people abandon that state, but even those that remain will rebel and destroy its foundations through corruption and anarchy.
 
Laski turned the primacy of freedom on its head, claiming that property was a mere cultural artefact. That is absurd, but such were the Muses of Nehru and the Indian socialists. Nehru’s younger fellow party-man, Siddhartha Shankar Ray (SSR), similarly argued that while life and liberty are innate natural rights, ownership of property is not. He said that since the right to property and freedom to contract did not pre-exist the Constitution these should be deemed to be of lesser import, presumably to be cast out from our Constitution with the flick of a socialist finger [vi]. Many of our judges also did not distinguish themselves as protectors of our freedom in those primitive times. Justice Hidayatullah of the Supreme Court lowered the stature of his office when he said that ‘it was a mistake’ to have property as a Fundamental Right.[vii] But this fact, that other political leaders in India also shared Laski’s views, does not diminish Nehru’s primary role in promoting these ideas in India.
 
Let us, even for the sake of argument, momentarily agree with SSR’s view that ‘modern’ freedoms and property rights did not pre-exist our Constitution. Was it then not obligatory on the leaders of independent India to ensure that these ‘new’ freedoms were introduced and ‘passed on’ to us? If some freedoms did not exist in a feudal, imperial India, how could that justify our not having them in independent India? Was the purpose of our struggle for independence merely to continue with the limited set of freedoms that the British had allowed us to enjoy? Was our independence merely an occasion to substitute arrogant and brown sarpanchs in place of imperial, white rulers? I must admit that at times I am unable to distinguish clearly between Nehru and his godchildren on the one hand, and the British rulers of India on the other. It is difficult at times to conclude who was worse for India in the end – having to work with totally corrupt Indian Ministers as one’s bosses at work, or having honest but arrogant imperial British rulers in their place.
 
Implementing his whimsical arguments about property rights, Nehru launched his assault by enacting land ceiling acts, called, euphemistically and misleadingly, ‘land reforms’. After Nehru’s passing away, Congress leaders strengthened this attack. The argument they made to support their attack was that ‘rights’ of the society were more important than our freedoms. Mohan Kumaramanglam said, ‘The clear object of this amendment [25th] is to subordinate the rights of individuals to the urgent needs of society’ (bold italics mine). This was in relation to the 25th amendment of the Constitution in 1971, which removed the concept of compensation upon acquisition of people’s lands,[viii] yet another destruction of property rights. But except in situations of war when the overall need of the society arguably predominates that of an individual, the freedom of individuals cannot be subordinated in a free country. This was not a war-related withdrawal of freedoms.
 
The socialist flood was now nearing its fullest season. All stops had been pulled out. There was the monopoly of loss making public sector businesses, there was the nationalization of privately operated businesses, there was land acquisition without market compensation and there were land ceiling laws. ‘In the months after the [25th] amendment […] coal, coking coal, and copper mines were nationalised, along with steel plants, textile mills, and shipping lines – totalling hundreds of nationalisations’.[ix]
 
This plunderous socialist rampage was fully supported by all political parties in India except the Swatantra. After Swatantra shut down in 1974, these principles continue to be supported today by all major parties in India; none of them has suggested returning our freedoms to us.The biggest blow to property rights was therefore not administered by Nehru or by his Congress party, but by a rag-tag bunch of socialist factions calling themselves the Janata Party, in 1978 (this included Bharatiya Jana Sangh, the predecessor of the current socialist group called BJP). While we remain indebted to this motley bunch for reversing some of the more blatant impositions against freedom by Indira Gandhi’s Emergency, they simply added one more nail to the coffin of freedom in India. By the time the Janata Party formed the government, only a sliver of property rights was still left in India.
Land reform legislation had already not only been enacted but had been placed under the Ninth Schedule of the Constitution, sheltering it from judicial review. However, the risk, no matter how remote, of a constitutional challenge to these laws prompted the Janata Party to abolish the right to property through the 44th Amendment of 1978. In particular, Article 19(1)(f), that had till then, even through Nehru’s time, guaranteed to the Indian citizens a right to acquire, hold and dispose of property, was repealed.
 
No sensible reason was offered. To assuage people’s fear, it was announced that property, ‘while ceasing to be a fundamental right, would, however, be given express recognition as a legal right, provision being made that no person shall be deprived of his property save in accordance with law’.[x] This is an extraordinarily weak protection. The law is a malleable thing in comparison to the Constitution. Citizens of a free country should not have to depend on the whim of their ruling governments for the defence of their freedoms, and thus of their property. Socialists have never understood why they can’t do such things when they still stick with the word ‘liberty’ in our Preamble.
 
This is an extract from my book, Breaking Free of Nehru.
 

[i] In Singh, V B, ed, Nehru on Socialism, Government of India, Ministry of Information and Broadcasting, Publications Division, Delhi, 1977, pp.56–7, cited in Roy, Subroto, Pricing, Planning and Politics, The Institute of Economic Affairs, London, 1984, p.35.

[ii] Cited in a review of Harold Laski: A Life on the Left by Isaac Kramnick and Barry Sheerman in Washington Monthly, November 1993, by Arthur M Schlesinger, Jr.

[iii] Laski, Harold J, (1960), A Grammar of Politics, cited in Austin, Granville, (1999), Working in a Democratic Constitution: A History of the Indian Experience, Oxford University Press, Delhi, 2003 paperback edition. Footnote at p.77.

[iv] Laski, Harold J, An Introduction to Politics, Unwin Brothers, London, 1931, p.15.

[v] In his 1961 inaugural address as President.

[vi] Ray’s views cited in Austin, Granville, op. cit., p. 244.

[vii] Ibid., p.205.

[viii] Ibid., p.254.

[ix] Ibid., p.253.

[x] [http://indiacode.nic.in/coiweb/amend/amend44.htm].

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John Maynard Keynes, the stealthy enemy of human freedom

Note, 20 June 2011: I've lost the original post of 8 January 2011 – as a result of the imperfect recovery from a series of web attacks on this website in early-mid 2011. Fortunately, this post had been copied by at least two to three others on the internet. That has been invaluable in bringing it back to my website, where it started its life! 

This was the original link on my website: The deceptive, murderous Fabian socialists Keynes the incompetent economist. It no longer works. I'm sure this post must have received a number of comments, but those too have been lost. This is a recovered version of the post. Fresh comments are welcome.
RECOVERED FROM HERE. I often make updates on most blog posts, but these have now been permanently lost, I think.
 
On January 8, 2011, in Fabian socialismKeynesianism, by Sanjeev Sabhlok
 
I don’t like making ad hominem attacks, but what I’ve read about the Fabians and Keynes over the last few days makes it necessary to assassinate Keynes (- in the figurative sense!) – so that he, along with Marx and other corrupted evil geniuses, do not ever arise again. 
 
Why this focus on Keynes all of a sudden?
 
I’m still learning. Learning is a lifelong endeavour and one can’t simply use the pretext of one’s degrees to claim expertise and wisdom. Being a science graduate, I barely knew anything about economics till I decided, after joining the IAS, to study it seriously. I realised that I needed to learn economics if to be an effective policy maker. But the MA in economics that I then obtained from Panjab university was more a technical degree than a fundamental study of the logic and debates of the discipline (I did well in mathematical economics because of mathematics background but I now realise that one needs to read widely, and iteratively, to even begin to understand economics). 
 
I further studied economics in Australia (Curtin university) and then in USA. Only then did I started reading seriously about Keynes. However, Keynes had largely been discredited in the acedemia by then. (As Krugman notes, Keynes has not been taught in most graduate courses at least since the mid-1970s). I was therefore taught Lucasian mathematical macro-economics and some dynamic theory by Richard Day. I developed some idea of Keynesianism in this process (including a bit of IS-LM stuff), but not much.  
 
Modern macro-economics based on micro-economic foundations didn’t make much sense, either. No doubt, it is better attempt to understand the real world than Keynesianism is, but it remains divorced from the fundamental principles of freedom and the social contract. 
 
I therefore find the classicals, including FA Hayek, far more satisfying and consistent. Supplementing this knowledge with my experience in public administration, I came to a coherent understanding of the economy that involves understanding the incentives at work within a society’s institutions, and assessing its level of freedom. That is a classical liberal approach, quite different from Keyensian or Marxist approaches. Without firm roots in classical economics, I believe that modern economists tend to rapidly move into statist solutions.
 
Keynes still has a significant presence in the academia through New Keynesianism (e.g. Stiglitz, Kruman), and receives prominence each time the US government agencies and Federal Reserve Bank – that have diligently followed his ideas – mess up things.
 
Indeed, that’s the other point – that Keynes is still very prominent inside government agencies. Keynes is the cause of serious government failure across the world and significant devaluation of currencies. The (Fabian) London School of Economics, the League of Nations, the New Deal, the welfare state, various international central bank concepts that led to the International Monetary Fund, the World Bank, the Brettonwoods system which led to the collapse of the gold standard, and even the United Nations – all have been strongly influenced by the Fabians, but more particularly Keynes. 
Hence his ideas MUST BE OPPOSED. Till today I only opposed his ideas. From today, I now oppose his person, as well. Keynes at Harvard has opened my eyes. [Download the Word version which I find is easier to read and search] 
 
To ensure that I wasn’t jumping to rash conclusions, I did some quick research. this research confirmed that Keynes was indeed a deeply corrupt, devious person, who plotted to shift the world towards his own brand of socialism – by stealth.  It is therefore my mission (apart from my main mission – to reform India) to destroy Keynesianism across the world. And one of things I must do is to destroy his character. Sometimes ad hominem attacks are warranted.   
 
I’m now going to publish two blog posts in rapid succession. This one is written largely by me, based on my research over the past two days. It will aim to assassinate Keynes’s character. The other one (tomorrow) will be a cut-and-paste from Murray Rothbard’s work, and will aim to demolish his theories. 
 

1  The character assassination of Keynes

Keynes theories and policies make sense only in relation to his character. His main policy goal in life was the destruction of capitalism and his chosen method was to destroy the value of money, to destroy private savings, and to orchestrate the takeover of all investment by the state. To achieve that goal he deployed the Fabian method of deception and subterfuge.  
 
Keynes the pervert
That he was a homosexual – and a particularly promiscuous one at that (many Fabian socialists were part of his network) – was news to me (such things aren’t mentioned in textbooks on macro-economics). Thus, ”In 1967 the world was startled by the publication of the letters between Lytton Strachey and Maynard Keynes. Undisputed evidence in their private correspondence shows that Keynes was a life-long sexual deviate. What was more shocking was that these practices extended to a large group. Homosexuality, sado-masochism, lesbianism, and the deliberate policy of corrupting the young was the established practice of this large and influential group which eventually set the political and cultural tone for the British Empire.” [Zygmund Dobb's Keynes at Harvard]
 
“Keynes always ready to guide others freely advised his fellow debauchees to go to Tunis, “where ‘bed and boy’ were also not expensive.” Keynes at Harvard]. Thus Keynes probably molested children. 
He married Lydia Lopokova (in 1925 at age 42), so that in public he would appear to have a normal life, but “Keynes marriage was obviously ‘an arrangement’ since he continued his association with his male amours until his death. In fact, his male sweetheart, Duncan Grant, served as best ‘man’ at his wedding.” [Keynes at Harvard]
 

Keynes was a chronic liar and a fraud

Keyenes was a serial liar and deceiver.
Weak knowledge of economics but falsely putting down von Mises:

“The young Keynes displayed no interest whatsoever in economics; his dominant interest was philosophy. In fact, he completed an undergraduate degree at Cambridge without taking a single economics course. Not only did he never take a degree in the subject, but the only economics course Keynes ever took was a single-term graduate course under Alfred Marshall.” [Source:Murry Rothbard's Keynes, the Manp.14]
 
Because of his father’s influence with him and his own passion for socialism (Marshall was the economic advisor of the Fabians and railed against ‘inequality’- see Joseph Schumpeter’s History of Economic Analysis, p. 765 – cited in Keynes at Harvard), therefore Marshall was taken in by Keynes and gave him a job. A case of nepotism at its worst
 
Murray Rothbard says it all: Was Keynes, as Hayek maintained, a “brilliant scholar”? “Scholar” hardly, since Keynes was abysmally read in the economics literature: he was more of a buccaneer, taking a little bit of knowledge and using it to inflict his personality and fallacious ideas upon the world, with a drive continually fueled by an arrogance bordering on egomania. … He possessed the tactical wit to dress up ancient statist and inflationist fallacies with modern, pseudoscientific jargon, making them appear to be the latest findings of economic science. Keynes was thereby able to ride the tidal wave of statism and socialism, of managed and planning economies.”[Keynes, the Man, p.32] 
 
Fraud perpetrated against von Mises
Keynes reviewed Ludwig von Mises’s German Treatise on Money and Credit in 1914, slandering it, but it later came out that he did not understand German! As Murray Rothbard notes, ‘This was Keynes to the hilt: to review a book in a language where he was incapable of grasping new ideas,and then to attack that book for not containing anything new, is the height of arrogance and irresponsibility.” [Murry Rothbard's Keynes, the Manp.12]]
 
Fraud against Pigou
“Keynes began his systematic campaign of destruction against Pigou when Pigou rejected his previous approach in the Treatise on Money, at which point Keynes also broke with his former student and close friend, Dennis H. Robertson, for refusing to join the lineup against Pigou. The most glaring misstatement in The General Theory, and one which his disciples accepted without question, is the outrageous presentation of Pigou’s views on money and unemployment in Keynes’s identification of Pigou as the major contemporary “classical” economist who allegedly believed that there is always full employment and that money is merely a veil causing no disruptions in the economy—this about a man who wrote Industrial Fluctuations in 1927 and Theory of Unemployment in 1933, which discuss at length the problem of unemployment! Moreover, in the latter book, Pigou explicitly repudiates the money-veil theory and stresses the crucial centrality of money in economic activity. Thus, Keynes lambasted Pigou for allegedly holding the “conviction . . . that money makes no real difference except frictionally and that the theory of unemployment can be worked out . . . as being based on ‘real’ exchanges.” An entire appendix to chapter 19 of The General Theory is devoted to an assault on Pigou, including the claim that he wrote only in terms of real exchanges and real wages, not money wages, and that he assumed only flexible wage rates (Keynes 1936: 19–20, 272–79).
 
“Thus, it is clear that Keynes seriously misrepresented Pigou’s position and that this misrepresentation was deliberate, since, if Keynes read any economists carefully, he certainly read such prominent Cantabrigians as Pigou. Yet, as Rutten writes, “These conclusions should not come as a surprise, since there is plenty of evidence that Keynes and his followers misrepresented their predecessors” (Rutten 1989: 14). [Murry Rothbard's Keynes, the Manpp.23-25]
 
Keynes should have been sued by Mises and Pigou. But these were gentlemen. 
 

Keynes, even at 55, advocated immorality as a philosophy of life

The following statement of Keynes summarises his immoral character: 
 
“In our opinion, one of the greatest advantages of his [Moore’s] religion was that it made morals unnecessary….We entirely repudiated a personal liability on us to obey general rules. We claimed the right to judge every individual case on its merits, and the wisdom to do so successfully. This was a very important part of our faith, violently and aggressively held, and for the outer world it was our most obvious and dangerous characteristic. We repudiated entirely customary morals, conventions and traditional wisdom. We were, that is to say, in the strict sense of the term, immoralists. (Essays in Biography. The Collected Writings of John Maynard Keynes. Vol. X. London: Macmillan, [1951] : 142–43) [Murry Rothbard's Keynes, the Manp.7]
 
Moore (- an active Fabian and , whose philosophy Keynes claimed to follow) was more than a mere philosopher: ”Lytton Strechey and J.M. Keynes … sought Moore’s advice in arbitrating sexual disputes relating to their claims for this, or that, male sweetheart. Moore was installed as unofficial mediator on these jurisdictional claims. Various accounts of Moore, Keynes and Lytton Strachey lying on a rug together, in different rural retreats, attest to Moore’s physical association among that homosexual coterie.” [Keynes at Harvard]
 

Keynes the megalomaniac

Keynes was unbelievably arrogant. E.g.: ”Keynes “had a clear idea of his role in the world; he was . . . the chief economic adviser to the world, to the Chancellor of the Exchequer of the day, to the French minister of finance, . . . to the president of the United States.” Pursuit of power for himself and a ruling class meant, of course, increasing adherence to the ideas and institutions of a centrally managed economy.” [Murry Rothbard's Keynes, the Manp.11]
 
“Johnson notes that Keynes’s “instinctive attitude to any new situation was to assume, first, that nobody was doing anything about it, and, secondly, that if they were, they were doing it wrong. It was a lifetime habit of mind based on the conviction that he was armed with superior brains . . . and, Cambridge Apostle that he was, gilled with superior sensibilities” (ibid.: 33).” [ibid]
 

Keynes engaged in insider-trading

 ”Whether Keynes used inside Treasury information to make such investment decisions is still unproven, although suspicions certainly remain (Skidelsky 1983: 286–88).” [Murry Rothbard's Keynes, the Manp.14] 
 
In my view, given what we know of Keynes’s character, he almost certainly must have used insider information to make money. It is virtually impossible, given his character, that he did anything honestly.
 
Keynes’s close association with communist Russians and Russian spies in the West.
 
His Russian wife, Lydia Lopokova, was deeply linked with the Russian communists: ”In the midst of such repressive conditions, Lydia and Maynard were allowed unrestricted privileges to visit relatives and to travel freely. Even foreign heads of Communist Parties and representatives of the Communist International could not secure such a broad Soviet indulgence”  [Keynes at Harvard]
 
–  ”[Harry] White served as a Soviet agent while doubling with Keynes as the architect of the World Bank and the International Monetary Fund” [Keynes at Harvard] (White remained close to Keynes, even at his deathbed. Keynes surely knew a of communists very closely). 
 

Keynes was a closet socialist

Keynes’s version of socialism was different to Marx’s but it had many elements in common. Not only was central bank not based on the gold standard a crucial part of his model – so that currencies could be debased – but he had this idea (along with Marx) that a smart set of people existed who could rule the rest of us. Keynes always tried to massage his language to pretend he was not preaching socialism, but that was consistent with the Fabian socialist strategy.
 
Keynes’s fascination with inequality and ‘classes’ in society
That Keynes was in favour of equality is obvious even in The General Theory(p.372) where he writes: “The outstanding faults of the economic society in which we live are its … arbitrary and inequitable distribution of wealth and incomes.” [Note how he calls the results of the market system – of voluntarily choice – as "arbitrary"]. Jealousy against the rich drives Keynes, as it drove Marx.
 
In The Economic Consequences of the Peace he wrote: “Europe was so organized socially and economically as to secure maximum accumulation of capital. While there was some continuous improvement in the daily conditions of life in the mass of the population, Society was so framed as to throw a great part of the increased income into the control of the class least likely to consume it. The new rich of the nineteenth century were not brought up to large expenditures, and preferred the power which investment gave them to the pleasures of immediate consumption.  In fact, it was precisely the inequality of the distribution of wealth which made possible those vast accumulations of fixed wealth and of capital improvement. . . Herein lay, in fact, the main  justification of the Capitalist System.  .If the rich had spent their new wealth on their own enjoyments, the world would long ago have found such a regime intolerable.”
 
Further: “. this remarkable system depended for its growth on a double bluff or deception.  On the one hand the laboring classes accepted from ignorance or powerlessness, or were compelled, persuaded, or cajoled by custom, convention, authority and the well-established order of Society into accepting, a situation in which they could call their own very little of the cake, that they and Nature and the capitalists were co-operating to produce.  And on the other hand the capitalist classes were allowed to call the best part of the cake theirs and were theoretically free to consume it, on the tacit underlying condition that they consumed very little of it in practice. The duty of “saving” became nine-tenths of virtue and the growth of the cake the object of true religion.  There grew round the non-consumption of the cake all those instincts of Puritanism which in other ages has withdrawn itself from the world and has neglected the arts of production as well as those of enjoyment. . . Saving was for old age or your children; but this was only in theory—the virtue of the cake was that it was never to be consumed, neither by you nor by your children after you.”
 
I can’t distinguish between this Keynes’s opinions and Marx’s, in his Communist Manifesto. Keynes had a strong socialist mindset, focused on class analysis, and inaccurate in many ways. [See this for more details]
 
Letter to his mother:
In 1917 at age 30 he wrote to his mother about his passion for communism: ”My Christmas thoughts are that a further prolongation of the war, with the turn things have taken, probably means the disappearance of the social order we have known hitherto. With some regrets I think I am on the whole not sorry. The abolition of the rich will be rather a comfort and serve them right anyhow. …Well, the only course open to me is to be bouyantly bolshevik; and as I lie in bed in the morning I reflect with a good deal of satisfaction that, because our rulers are as incompetent as they are mad and wicked, one particular era of a particular kind of a civilization is very nearly over.” [Keynes at Harvard
 
Socialism and “socialisation”
“Keynes’ book, End of Laissez-Faire, was his most pronounced and clearcut advocacy of socialism.” [Keynes at Harvard] In this book, “Keynes boldly declares: In fact, we already have in these cases many of the faults as well as the advantages of State Socialism. Nevertheless we see here, I think, a natural line of evolution. The battle of Socialism against unlimited private profit is being won in detail hour by hour.”[Keynes at Harvard]
 
Mrs. Joan Robinson (a well known economist and colleague of Keynes) herself noted that the differences between Marx and Keynes are only verbal (not real). She wrote; “The time, therefore, seems ripe to bridge the verbal gulf” between the two. [Keynes at Harvard]
 
Schumpeter, a socialist, was very pleased that Keynes’s work rivaled Marx’s in undermining capitalism. [Keynes at Harvard]
 
“Margaret Cole, English Fabian revolutionary, has stated: “We Socialists used Keynes and the U.S.S.R. as touchstones” (Circa 1923).” [Keynes at Harvard] Keynes and Marx were naturally seen as of the same piece by those who knew what socialism was all about.
 
Even the General Theory: “The State will have to exercise a guiding influence on the propensity to consume, partly through its scheme of taxation, partly by fixing the rate of interest, and partly, perhaps, in  other ways. Furthermore, it seems unlikely that the influence of banking policy on the rate of interest will be sufficient by itself to determine an optimum rate of investment.  I conceive, therefore, that a somewhat comprehensive socialization of investment will prove the only means of securing an approximation to full employment. . .It is not the ownership of the instruments of production which it is important for the State to assume. If the State is able to determine the aggregate amount of resources devoted to augmenting the instruments and the basic rate of reward to those who own them, it will have accomplished all that is necessary.  Moreover, the necessary measures of socialization can be introduced gradually and without a break in the general traditions of society. (p.378)
 
Also: “The central controls necessary to ensure full employment will, of course, involve a large extension of the traditional functions of government.” (General Theory, p.379)
 

Keynes’s deep relations with the Fabian society

Few people knew during his lifetime that Keynes was an active member of Fabian society. This was typical, being the standard approach of infiltration adopted by the Fabians. But his association with the society was very deep.
 
Through his father:
His father was an active member right through. Indeed, “The elder Keynes book was required reading among Fabian socialists and was listed for sale in the official organ of the American Fabian Society under the listing, “Recommended books on Socialism and Social Reform.”” [Keynes at Harvard]
 
Through George Bernard Shaw
“[George Bernard] Shaw was a chief patron and sponsor of Keynes in Fabian socialist circles in England and the United States. Keynes gave Shaw a full report of the progress he made in writing books over a period of seventeen years.” [Keynes at Harvard]
“In 1925 in an article entitled “The Future” Keynes declared rapturously, “What a debt every intelligent being owes to Bernard Shaw!” This statement was repeated by Keynes in 1932″ [Keynes at Harvard]
 
Sydney Webb:
“In 1926 Keynes emphasized his pro-bolshevik position by writing that he was on the “extreme left” as compared to Sidney Webb the head of the Fabian socialists in Britain.” [Keynes at Harvard]
 
Fabian society events:
“For many years editions of the Fabian News bore announcements of Keynes’ lectures at Fabian socialist functions.” [Keynes at Harvard]
Fabian society also re-published most of his works under its banner. That it also helped use its contacts to sell his books is outlined in Keynes at Harvard.  
 

Keynes’s influence on Hitler’s economic policies

Fabian socialists and Keynesians actively supported communist USSR and the two main fascist dictators – Hitler and Mussolini. Note also that Keynes designed Russia’s currency – in his official capacity in the UK Treasury. “Soviet officials were effusive in their thanks to Keynes for designing the first Soviet currency for them” [Keynes at Harvard]
 
“In 1928 on his way back from the Soviet Union Keynes had a long conference with the German economist Hjalmar Schacht. Keynes reported that he and Schacht agreed on Keynesian policies. Thirty-four months later Schacht joined hands with Hitler and utilized Keynesian methods to socialize the German nation for a war economy. When World War II began Keynes declared, “that Britain would have to employ all of the weapons of Dr. Schacht.” Later Keynes reiterated that, “the various recipies devised by Dr. Schacht for Germany would have to be applied by Britain. . . .”” [Keynes at Harvard]
 
“Keynes once remarked that “in offering a theory of employment and output as a whole, which departs in important respects from the orthodox tradition,” he might expect “less resistance from German, than from English, readers.”For, his theory of output as a whole, he said, was “much more easily adapted to the conditions of a totalitarian state” than was the then reigning economics of laissezfaire. This disarming sentiment appears towards the end of the preface to the German edition of The General Theory.” [Keynes and Hitler, Narindar Singh, Economic and Political Weekly, Vol. 29, No. 42 (Oct. 15, 1994), pp. 2755-2757+2759-2766].
 
Mussolini was (at least indirectly) influenced by Keynes:
 
“Mussolini personally set his approval and signature over a book which proclaims: Fascism entirely agrees with Mr. Maynard Keynes, despite the latter’s prominent position as a Liberal. In fact, Mr. Keynes’ excellent little book, The End of Laissez-Faire (l926) might, so far as it goes, serve as a useful introduction to fascist economics. There is scarcely anything to object to in it and there is much to applaud.” [Keynes at Harvard]
 
Lenin was a fan of Keynes: “In 1919 Nicolai Lenin issued a wildly enthusiastic panegyric on Keynes book, The Economic Consequences of the Peace. He declared, “Nowhere has the Versailles Treaty been described so well as in the book by Keynes.””
(The fact that Keynes got unrestricted access to travel in USSR is also related to a long-standing and close relationship between the Fabians and Lenin – and Keynes’s direct relationship with Russian spies.]
 

Keynes the anti-Semitic racist

As a 17-year old Etonian Keynes wrote the following in an essay entitled, ‘The Differences between East and West: Will They Ever Disappear?’
“[W]hether these two branches of the human race [European and Oriental] will continue to live side by side, or whether the one will succeed in absorbing the other. We can best discuss this question by taking into consideration the characteristics of two oriental races…viz, the Chinese and the Jews [who]…have done their utmost to make themselves indistinguishable from Europeans and they have signally failed.
 
“It is not that the Jews are traditionally the accursed race that makes anti-semites, it is because they have in them deep-rooted instincts that are antagonistic and therefore repulsive to the European, and their presence amongst us is a living example of the insurmountable difficulties that exist in merging race characteristics in, making cats love dogs” [Keynes 1900:2]. ["Was Keynes Anti-Semitic?" by Anand Chandavarkar, Economic and Political Weekly, Vol. 35, No. 19 (May 6-12, 2000), pp. 1619.]
Now, this was when he was only 17. Did he change his mind at 42? No!
“Keynes, it can be noted, tended to explain away mass murder in large part on the “Russian and Jewish nature” rather than a logical development of socialism itself. The goal of socialism is clearly Keynes’ objective. It is interesting to note the undercurrent of anti-semitism in Keynes’ reference to “some beastliness” in “Jewish nature.” In the same article Keynes also observed that he had doubts “Russian
 
Communism” would “make Jews less avaricious.”(John Maynard Keynes, A Short View of Russia, Hogarth Press, London, 1925.) [Keynes at Harvard].
 

2  Conclusion

This was only the highlight of the material I’ve read in the last couple of days. There’s lot more in the references I’ve provided.
 
In brief, I’d suggest that Keynes’s work should be given the same stern look we use to analyse Hitler’s writings: a sociopath with deadly goals for society. We can’t forget the person where such extreme deviousness is involved. Indeed, we can’t forget the devious nature of the Fabian society itself while examining the work of any Fabian.
 
Keynes has undoubtedly managed to take the West well down the slippery slope that Hayek had warned against. Hayek has always been right (so have the classical liberals), but his message got lost in the glitter, showmanship, and shenanigans of Keynes.  Sociopaths have a way with people – and unless the people are very alert, they’ll be taken for a big ride.
 
It is time we take the world towards genuine freedom that was interrupted by the Marx and Keyenes (and so many of their confused followers), and push back the intrusive state till it is finally compatible with the level that ensures the optimal level of freedom for everyone.
 
In the end, I must note that while Keynes was a devious character, not all Keynesians deserve to be considered in this manner (though the Fabians should be watched very carefully). Many academic and government Keynesians might genuinely believe that Keynes was “saving capitalism”. They’ve got fooled big time, but they are to be considered as stupid, not evil. It is the intelligent socialists like Keynes that we must be wary of. 
 
My next blog post, from Murray Rothbard, should help remove the delusion of the Keynesians that he was in any way right.
 
ADDENDUM
Read also this anonymous but thoughtful piece: The Disaster of Keyenes.  
 
Continue Reading

The deceptive, murderous Fabian socialists

I accidentally came across a brilliant book (almost like the Wikileaks of socialism!) entitled, Keynes at Harvard – fortunately available free of cost online, in full. Have started reading it. [Download a Word version – I find that more convenient]

Here's chapter 2, below (about the Fabians).

The Fabians – of whom Bernard Shaw was one of the key  representatives – were a murderous lot. As this chapter notes (persuasively!) :"the basic difference between Bolshevik and Fabian totalitarianism is that under Fabianism, opponents of socialism would be “executed” in an amiable manner".

FABIAN SOCIALISM

The term Fabian keeps cropping up throughout this study. In most anti-capitalist endeavors whether at Harvard University, in Government Bureaucracy, in Socialism, Communism or Keynesism and even in Facism, Fabian personalities and Fabian policies manifest themselves.
 
Fabianism has been a much neglected, usually underrated and generally misunderstood movement.
 
In 1883 a Scottish-born American citizen, Thomas Davidson, joined with a friend, Edward R. Pease, in the latter’s apartment in London, to form a rather loose association to discuss, among other things, the question of spiritism. Pease was a member of the London Stock Exchange and an amateur psychical researcher. Among those present at the formative meetings was Havelock Ellis. (He later achieved notoriety through his major work Studies in the Psychology of Sex [7 vols. 1897-1928], which was frequently banned on charges of obscenity.)
 
Sister M. Margaret Patricia McCarran writes that at the fifth meeting this group “Adopting a socialist creed, they resolved to live in the world, pursuing their avocations and joining other societies.” Frank Podmore, a writer, suggested the name “Fabian Society.”(1) This appelation was to symbolize the use of the art of “penetration” into other social bodies in order to push through socialist objectives. From its very inception the use of stealth and deception was laid down as a fundamental procedure of the Fabian Society.
 
The Society was named after the Roman general Quintus Fabius Maximus (Cunctator, i.e. Latin-delayer), whose cautious strategy of “delay” after the disaster of Cannae in 216 B. C. thwarted Hannibal, the great Carthaginian.(2)
 
The Society adopted the name Fabian as a symbol of a plan “formulated to penetrate civic and social units and to find means to disseminate contemporary social ideas, concentrating on concrete objectives rather than on doctrines.”(3) The Fabians did not constitute themselves as a political party as such but developed the technique of “socialistic ‘permeation’ of existing political institutions.”(4)
 
Margaret Cole, leading Fabian socialist, gives interesting details of the character of the early Fabians:
. . . the handful who made up the Fabian society—only forty in 1885!—were as vaguely anarchistic and insurrectionist in their ideas and their expression of them as any group that had existed before them. They regularly denounced capitalists as thieves and talked about using dynamite, and they looked forward with confidence to an imminent social revolution, to take place somewhere about 1889.(5)
 
Incredible as it may seem, the Fabian Socialist Society began with only nine members, who chose an executive committee of three. Their organizational assets consisted of thirteen shillings and seven pence. ($1.89 in current monetary value.) Mrs. Cole, a former chairman of the British Fabian Society, in her book, The Story of Fabian Socialism, boastfully labelled this group as a “seeding” body busily sowing socialist schemes throughout society and then nursing them into full bloom.
 
Bernard Shaw joined the Fabian Society within the first year of its formation (1884). Another recruit at this time was Sidney Webb who, along with Bernard Shaw, dominated the Fabian movement for over 40 years. After Sidney Webb’s marriage to the very wealthy Beatrice Potter (Canadian Grand Trunk Railroad fortune) both he and his wife collaborated as a unit in Fabian activities.
 
Shaw contrasted the difference between other radical groups and his own by repeated references to “the highly respectable Fabian Society.”(6)
 
He illustrates the tactic of being “highly respectable” as follows:
The Fabian Society got rid of its Anarchists and Borrovians, and presented Socialism in the form of a series of parliamentary measures, thus making it possible for an ordinary respectable religious citizen to profess socialism and belong to a Socialist Society without any suspicion of lawlessness, exactly as he might profess himself a Conservative and belong to an ordinary constitutional club.(7)
 
The clever artifice of feigning “respectability,” while at the same time subverting society for revolutionary purposes, is a Fabian tactic that has had phenomenal success. It gave the Fabians easy entry into government, banks, stock exchanges and universities. This policy of conscious deception allowed Fabian Socialists to have their cake and eat it too. While extremists with a franker policy were barred from ordinary social intercourse the Fabians were welcomed because they had a velvet glove approach accompanied by fine intellectual manners.
 
The Fabians were more realistic than the Marxian socialists. They understood that it is much easier to subvert sons, daughters and wives of the prominent and well-to-do than it is to impress the laboring classes. They also understood, that socialist movements spring from the middle and upper classes—and not from the proletariat.(8)
 
Shaw thus describes the social composition of the Fabians:
Now the significant thing about the particular Socialist society which I joined was that the members all belonged to the middle class. Indeed its leaders and directors belonged to what is sometimes called the upper middle class: that is, they were either professional men like myself (I had escaped from clerkdom into literature) or members of the upper division of the civil service. Several of them have since had distinguished careers without changing their opinions or leaving the Society. To their Conservative and Liberal parents and aunts and uncles fifty years ago it seemed an amazing, shocking, unheard-of thing that they should become Socialists, and also a step bound to make an end of all their chances of success in life. Really it was quite natural and inevitable. Karl Marx was not a poor laborer: he was the highly educated son of a rich Jewish lawyer. His almost equally famous colleague, Friedrich Engels, was a well-to-do employer. It was precisely because they were liberally educated, and brought up to think about how things are done instead of merely drudging at the manual labor of doing them, that these two men, like my colleagues in The Fabian Society (note, please, that we gave our society a name that could have occurred only to classically educated men), were the first to see that Capitalism was reducing their own class to the condition of a proletariat, and that the only chance of securing anything more than a slave’s share in the national income for anyone but the biggest capitalists or the cleverest professional or business men lay in a combination of all the proletarians, without distinction of class or country to put an end to capitalism by developing the communistic side of our civilization until communism became the dominant principle in society, and mere owning, profiteering, and genteel idling were disabled and discredited.(9)
 
A fundamental principle of Fabianism is to collect a Brain Trust as an elite class to plan and direct all of society. Shaw pointed it out succinctly:
The Fabian Society succeeded because it addressed itself to its own class in order that it might set about doing the necessary brain work of planning Socialist organization for all classes, meanwhile accepting, instead of trying to supersede, the existing political organizations which it intended to permeate with the Socialist conception of human society.(10)
 
The principle of the specialist, the manager, the administrator, according to the Fabians represents an elite which the Fabians say will dominate society.(11) This elite concept attracted elements from the old English nobility who had been stripped of their former elite standing. Aristocratic elements began to crop up in the Fabian Society reflecting subconscious, and sometime conscious, attempts to recoup their old power via the socialist road (examples: Betrand Russell, the third Earl Russell, Percy D’Evelyn Marks, Lord Kimberly, etc.)(12)
 
The policy of hiding behind the skirts of respectability did not, however, prevent the Fabians from consorting with and helping their more violent brethren in the socialist movement. In fact, the Fabians aided and abetted Russian Bolsheviks long before the revolution in 1917.
 
In 1907, the Fabians played host to Lenin and his Bolshevik followers while they were holding a revolutionary conference in London. Alan Moorehead in his The Russian Revolution writes:
In the usual way the conference got off to a slow and ragged start. The delegates assembled first in Copenhagen, but were soon ousted by the police and eventually straggled across to London. Here Ramsay MacDonald, the British socialist leader, (Fabian –ed.) was of some help to them; he managed to obtain the use of the Brotherhood Church in Whitechapel in the east end of London. It belonged to a severe religious sect known as the Christian Socialists, and the agreement was that the Russians should hold their meetings in this odd place for a period of three days. Three weeks later the Christian Socialists were still pleading with their guests to leave the building just long enough for them to get in for their Sunday prayer meeting. Gorky meanwhile kept some of the more needy delegates going by raising funds from his English friends; he had one sum of 3,000 pounds from a wealthy soap manufacturer.(13)
 
George Lansbury (a leading Fabian and member of Parliament for the Labour Party for ten years), described the Fabian efforts to aid the Bolsheviks in the same 1907 London conference and identified the “soap manufacturer” as Joseph Fels, an American industrialist and head of the huge Fels Naphtha enterprises in the United States. Fels, as a member of the Fabian Society, was a well-known financial angel of revolutionary groups. Both Lenin and Trotsky, who headed this Bolshevik conference, later showed their gratitude by repaying the loan officially through the Soviet government in 1921.(14)
 
The connection between Fabianism and Lenin harks back to the early days of the Fabian Society (1897) when Lenin translated Sidney Webb’s Fabian publication History of Trade Unionism. Margaret Cole writes:
. . . the name of Webb had an almost mystical prestige in the Russian Communist Party, since it was their History of Trade Unionism which Lenin had read and translated during his exile and which he had recommended to all Party members.(15)
 
Bolsheviks were considered “comrades” by the Fabians. George Lansbury wrote that:
It is, of course, true that none of our Russian comrades from Lenin onwards really understands the mentality of British trade unionists, but I believe Lenin knew enough to know that in Britain we can be persuaded but cannot be forced into any course of action of which we disapprove . . . Russia, Britain and the world need thousands more like him (Lenin –ed.) if Socialism is ever to become into its own.(16)
 
One of the tremendous accomplishments of the Fabian Society was the creation of the British Labour Party. The Fabians had “permeated” the Liberal and Conservative parties. However, the maneuvers to use these parties for implementing the Fabian Socialist program met many obstacles. The main concentration had been in the Liberal Party. Fabians held key positions in the Liberal Party but after the formation of the Labour Party their main tactic was to destroy the Liberal Party’s effectiveness.
 
Bela Hubbard in his Political and Economic Structures writes:
Starting out with a mere handful, the British Fabian Society prospered and grew. By 1930, it had attained a membership of more than fifteen hundred. Its purpose, announced in 1883 and never subsequently modified, was the conversion of the British economy from a capitalist to a socialist structure. Among its accomplishments were the infiltration, corruption, and final destruction of England’s great Liberal party. While a futile and unrecognizable remnant of the Liberal party remains today, the party has been effectively destroyed. In its place has arisen the so-called Labor party— actually a socialist party, created and guided to its present power by this small group of intellectuals, the Fabian Society.(17)
 
Fabian leader Margaret Cole writes:
The modern Labour Party was born at its Nottingham Conference in January 1918, and Sidney Webb, with Henderson, was the architect of its constitution and the framer of its first political programme.(18)
 
The Labour Party policies have since been continuously determined by the Fabian Society. In this matter a small elite exerts a power that controls the remnants of the British Empire.
 
The Fabian Society was international in content. It recruited members from France, Italy, Austria, Germany, India, Canada, Australia, New Zealand and the United States.(19) As will be shown subsequently, Fabian influence in the United States has been tremendous.
 
The Fabian Society regularly sent delegates to meetings of the Second (socialist) International. Fabians were represented at various international conclaves which were dominated by such revolutionaries as Friedrich Engels (Karl Marx’s alter ego), Lenin and Trotsky.
 
Fabians were pioneers in projecting the concept of the League of Nations even before World War I.(20) Fabians have continuously held prominent positions in the International Labour Organization (I.L.O.) since the organization of that body by the League of Nations.(21)
 
Sister McCarran reports:
After 1919, through the date span of this study there was always a Fabian in the person of Stephen Sanders, C. Delisle Burns, or Philip Noel-Baker in the International Labor Organization or in the League of Nations secretariat at Geneva.(22)
 
She also writes that: “Shaw developed principles later embodied in the League Mandates and the United Nations Trusteeships.”(23) The influence of Fabianism in setting up the structure of the United Nations, UNESCO, etc. is so extensive that it would require a separate study to develop the subject properly.
 
The sinister deviousness of the Fabian technique is almost unbelievable. Basic Fabian operating characteristics are:
 
(1). A cover of respectability and good manners as a means of gaining entry into all social activities, while avoiding use of the label “socialism,” promoting socialism continuously by coloring such activities with new terms so as to attain socialism by stealth.(24)
 
Through schools, forums, deceptive “fronts” and infiltrated universities (Oxford and Cambridge in England, and Harvard in the United States, are notable examples) the Fabians create both conscious and unconscious socialists. The father of Fabianism, Sidney Webb, even before the turn of the century (1889) described the technique of creating large numbers of latent socialists who give a “socialist tone of thought” to whatever field they touch:
The difficulty in describing the English socialist organization is their constant fluidity. Their programmes and principles remain, and even their leaders, but their active membership is continually changing. A steady stream of persons influenced by socialist doctrines passes into them, but after a time most of these cease to attend meetings, the subjects of which have become familiar, and gradually discontinue their subscriptions. These persons are not lost to the movement: they retain their socialist tone of thought, and give effect to it in their trades unions, their clubs and their political associations. But they often cease to belong to any distinctly socialist organization, where they are placed by newer converts.(25)
 
(2). The Fabians early developed the propaganda technique of shouting down as “reactionary,” “anti-democratic,” and “dictatorial” those who own and operate private enterprises while at the same time these same Fabians conspire to impose a one party dictatorial control over society operated by an elite of specialists, managers, and socialist politicans.
 
(3). Fabians, like all socialists, claim to represent a progressive form of society whereas they are actually a throw back to ancient tyranny which dates back:
. . . to prehistoric times, and practiced today by savage tribes as yet practically untouched by civilization. The truth of this statement can be demonstrated both by reference to historical records and by direct observations. This is known to students of the subject, yet practically unknown to the general public.
Viewing this “modern” socialism in its historical perspective, it appears to represent, in the domain of social psychology, an example of what the biologists refer to as atavism, in the field of heredity. It is a mental “throwback” to the Stone Age.(26)
 
(4). The Fabians, along with the entire Marxist movement, have been perpetrating a gigantic propaganda hoax against the world, the illusion that socialism is a “science.” Not only the outside public but the rank and file of the socialist movement have been victims of this deception. For years some economists and social thinkers have been pointing out that in spite of socialists’ criticisms of the capitalist system they have carefully avoided presenting a detailed outline of the kind of system they intend to install in the place of free enterprise.
 
To this day socialists have not published an exhaustive economic theory of the socialist system. Neither Marx nor any of his followers produced such a work.
 
The Fabians, under the leadership of such economists as Sidney Webb, J.A. Hobson, Alfred Marshall, A.C. Pigou and John Maynard Keynes have dissected, analyzed, charted and evaluated statistically (with their own particular slant) every facet of private enterprise. They insist that society inevitably leads to socialism as a replacement of our present economic and political systems. Even the Soviet Union and its satellites with their forty-year experience in socialism have not produced one single work outlining a definitive economic theory of socialism.
 
It remained for Ludwig Von Mises, an economist advocating private enterprise, to goad the left-wing into taking public notice of the incredible lack of a socialist economic theory.
 
Oskar Lange, a communist who posed as a reform socialist, tried his hand at formulating such a theory.(27) To keep up the pretense of scholastic objectivity Lange even criticized (mildly) some of Karl Marx’s observations.
 
In his work On the Economic Theory of Socialism, Lange’s opening paragraph declared:
Socialists have certainly good reason to be grateful to Professor Mises, the great advocatus diaboli of their cause. For it was his powerful challenge that forced the socialists to recognize the importance of an adequate system of economic accounting to guide the allocation of resources in a socialist economy. Even more, it was chiefly due to Professor Mises’ challenge that many socialists became aware of the very existence of such a problem. And although Professor Mises was not the first to raise it, and although not all socialists were as completely unaware of the problem as is frequently held, it is true, nevertheless, that, particularly on the European Continent (outside of Italy), the merit of having caused the socialists to approach this problem systematically belong entirely to Professor Mises.(28)
 
Lange’s claim to have published, at long last, an economic theory of socialism is slightly ridiculous in face of the fact that the entire presentation is only pamphlet size (85 pages) and is buttressed by a contribution on Guidance of Production In A Socialist State by the economist Fred M. Taylor consisting of 13 pages. An examination of this thin volume shows that it is an obvious attempt to beg the question.
 
The failure of socialist and communist leaders to publish an economic theory of socialism cannot, however, be ascribed to mere oversight. A comprehensive work outlining the economic functions of socialism would give away the real plot.
 
For over a hundred years socialists of all stripes have been denouncing “capitalist tyranny” and have been assuming the role of champions of “freedom,” “democracy” and a “better life.” A definitive work on socialist economic theory would expose the falsity of such premises.
 
Such a work would have to outline the restrictions, compulsions and oppressions of the people required to make socialist planning possible. The fact that the socialist form must be a closed, “stationary” system operated by a rigid control apparatus could not be divulged too publicly because of propaganda considerations. Incentives, which are responsible for fundamental technological improvements, would continually upset national planned balances. Incentives mean rewards. Such rewards would set up a separate class which would constitute a threat to the political bureaucrats who intend to run the socialist state.
 
Top socialist leaders have known for years that the only feasible society that they could operate would be one under a closed economy hostile to drastic and sudden technological changes.
 
Fabian socialist economists like Sidney Webb, R.H. Tawney and Harold Laski have assiduously avoided dealing with the economic forms under socialism for fear of disgusting their followers. Benjamin E. Lippincott, professor of political science at the University of Minnesota, reflects the puzzlement of many observers when he writes:
If Marxist economists are largely responsible for failing to show how the every day economics of socialism might be worked out in practice, socialist writers other than economists must share some of the responsibility. Writers on history, sociology, and political science like the Webbs, Tawney, and Laski have done admirable work in constructing institutions for a socialist state, but they have not pressed for an inquiry into the economics of such a state, even though the economics might vitally affect what they have constructed. They have not sufficiently considered the economic conditions that must be satisfied if a socialist state is to equal or to improve upon the standard of life provided by capitalism. Nor have they given adequate attention, from the technical point of view, to the economic advantages and disadvantages of socialism as compared with capitalism.(29)
 
(5). Fabian Socialist overall aims are international and imperialist in character. Starting in England as home base they have extended their “permeation,” influence and control to the entire British Empire. Fabian branches in numerous parts of the world have expanded their power to fantastic proportions. There have been Labour socialist governments in Australia and New Zealand as well as in England itself. These were founded and led by members of the Fabian Society. India is pursuing a socialist course set by the precedent of Fabian trained Jawaharlal Nehru and Krishna Menon. Intervention by British and American Fabians in the affairs of the United States has decided major policies and has largely molded the course of government control of the economic life of the United States. (A more detailed account of this process is dealt with in the next chapter.) The injection of Fabian socialist influence into the United Nations, UNESCO and the International Monetary Fund is so extensive that it would require a separate study.
 
Early Bolshevik connections with the Fabian socialists, as noted previously, inevitably allured the Fabian mind. Bernard Shaw and Beatrice and Sidney Webb, founders and leaders of Fabianism, became disillusioned with the principle of “gradualness” of reform socialism.(30)Fabian leader Margaret Cole reports:
Bernard Shaw who had visited Russia during the summer of 1931 in company with Lady Astor and others, came home bubbling with excitement and delivered a lyrical address to the members of the Fabian Summer School, (31)
 
The Webbs went to the Soviet Union in 1931. Margaret Cole writes:
The Webbs, however, were visitors of a very special kind. In the first place, they were people of a very much higher calibre and standing than the majority of the flock of tourists; to convince them of the rightness of the Soviet system would be well worth while.
 
The Webbs were royally entertained and adulated, according to Mrs. Cole:
They were met and welcomed by representatives of the Soviet Foreign Office, the consumer’s cooperatives, and the Soviet of Leningrad. Sidney commented: “We seem to be a new type of royalty.”(32)
 
Actually, the above account by Margaret Cole is misleading. The Webbs were already thoroughly wedded to the Kremlin and apparently they were assigned the task by the Russian Foreign Office of perpetrating a huge deception on the unsuspecting Free World.
 
For upon their return the Webbs issued a two-volume work entitled Soviet Communism—A New Civilization. This presumably was written as an unbiased Fabian view. However, on April 7th, 1952, Igor Bogolepov appearing before the United States Senate sub-committee on Internal Security, as a former high official of the Soviet Foreign Office, testified as follows:
MR. MORRIS. Through the Foreign Office you had people in other countries write books favorable to the Soviet point of view.
MR. BOGOLEPOV. One British and one American. You certainly remember the British labor leaders, Sidney and Beatrice Webb, very reasonable people. They visited the Soviet Union in about 1935 or 1936, and the result of their visit was a two-volume work, Soviet Communism and New Civilization.
MR. MORRIS. That is, after the Webbs got back to England, having been in Soviet Russia—
MR. BOGOLEPOV. Yes.
MR. MORRIS. They wrote a two-volume work on Russia or the Soviet?
MR. BOGOLEPOV. That is right.
SENATOR FERGUSON. Now give us an example of Americans.
MR. BOGOLEPOV. I didn’t finish it yet.
SENATOR FERGUSON. Pardon me. Go ahead.
MR. BOGOLEPOV. The materials for this book actually were given by the Soviet Foreign Office.
SENATOR FERGUSON. Given to the Webbs.
MR. BOGOLEPOV. Yes. They had only to remake a little bit for English text, a little bit criticizing, but in its general trend the bulk of the material was prepared for them in the Soviet Foreign Office.
SENATOR FERGUSON. In the Soviet Foreign Office.
MR. BOGOLEPOV. In the Soviet Foreign Office, and I participated myself in part of this work.
SENATOR FERGUSON. So you were really preparing it under the Soviet, giving it to the Webbs so they might write it in English so it could be distributed in English.
MR. BOGOLEPOV. That’s right; yes.(33)
 
This testimony brought cries of “lies” and “fraud” from liberal intellectuals. However, 16 years after Bogolepov’s testimony, the niece of Beatrice Webb reported that every page ofSoviet Communism was “checked for errors by the Soviet Embassy.” Among those involved in this “impartial and scientific” account was the Soviet press secretary, the chief of the Soviet Trade Mission and the Soviet Ambassador to England.* Thus, even the Webb’s slight emendations of an original Soviet manuscript were carefully refurbished to meet the strict Soviet party line.
 
The book Soviet Communism was distributed in huge numbers by bookshops throughout the world. It was falsely presented as a work written by respectable and solid British citizens merely recording honest observations. Such deception is typical of Fabian methods.
 
Today the British Fabian pronouncement in favor of recognition of Red China and the demand that the United States stop atomic testing, are a logical extension of the traditional Fabian Socialist sympathy with Kremlin policy.
 
Fabians who claim that they advocate only peaceable socialist objectives are given the lie by their frequent defense of Stalin’s bloody mass murders.
 
On the last page of Intelligent Woman’s Guide to Socialism, Bernard Shaw declares:
I also made it quite clear that Socialism means equality of income or nothing, and that under Socialism you would not be allowed to be poor. You would be forcibly fed, clothed, lodged, taught, and employed whether you like it or not. If it were discovered that you had not character and industry enough to be worth all this trouble, you might possibly be executed in a kindly manner; but whilst you were permitted to live you would have to live well.(34)
 
Apparently the basic difference between Bolshevik and Fabian totalitarianism is that under Fabianism, opponents of socialism would be “executed” in an amiable manner.

1  Sister M. Margaret Patricia McCarran, Ph.D., Fabianism In the Political Life of Britain, 1919-1931,Heritage Foundation, 74 East Wacker Drive, Chicago I, Ill. pp. 3-4.
Sister McCarran’s book is a monumental research on the Fabian Society during its most fruitful period. It is indispensable as a reference authority on this question. In this study hundreds of items were checked for correctness and in every case the figures, quotations and references in this work were found to be completely accurate. It is an indispensable work for all students and researchers on the subject.
2  “Fabius,” “Fabian Society,” “Hannibal,” Columbia Encyclopedia, Second Edition, Columbia University Press, 1950.
3  Fabianism In The Political Life of Britain, p. 4
4  “Fabian Society,” Columbia Encyclopedia, 2nd Ed.
5  Margaret Cole, Beatrice Webb, Harcourt Brace, N. Y., 1946, p. 49.
6  Bernard Shaw, Intelligent Woman’s Guide to Socialism and Capitalism, Brentano’s, N.Y., 1928, p. 94.
7  Ibid., p. 220.
8  Sidney Webb, in his Socialism in England, 1889, pp. 26-27, wrote:
The Fabian Society occupies a different sphere as a Socialist Society from that of the two larger bodies. It was founded in 1883 as an educational and propagandist centre, and includes members of all the other organizations, with a number of active workers chiefly of the middle class, and “literary proletariat.” It furnishes lecturers in considerable number to all meetings where Socialism, in any guise whatsoever, can possibly be introduced, and its own fortnightly discussions have been useful in formulating and adapting socialist principles in relation to actual contemporary conditions. Two of its members were recently elected on the London School Board. The Society exercises a considerable influence, more real than apparent, by the personal participation of its members in nearly all reform movements, as well as by their work at the Universities and in the fields of journalism and the teaching of Political Economy. It is not, however, a numerous body, and makes no attempt to increase its numbers beyond a convenient limit.
9  Intelligent Woman’s Guide to Socialism and Capitalism, p. 185.
10  Ibid., p. 186.
11  G.D.H. Cole, a leader of British Guild Socialism in 1919 (later a Fabian leader), was horrified over the Fabian concept of “expert manipulator” as the coming elite. L.L. Price, Economic Journal, June 1919, No. 114, Vol. XXIX, p. 189, wrote:
For that stout believer (S. Webb –ed.) in the necessity and advantage of a trained, informed bureaucracy, vested with full authority to direct our every movement and supply all needs, is admonished by Mr. Cole because in one of his most recent comprehensive hand-books of final instruction—that on “The Works Manager Today”—he “believes” and “assumes” that “manipulation” of men is a “science to be learnt and controlled by the expert manipulator.”
12  Fabianism in the Political Life of Britain, p. 464.
13  Alan Moorehead, Russian Revolution, Harper, N. Y., 1958, p. 81.
14  George Lansbury, My Life, London, 1928, p. 246. (Lansbury lectured on socialism at Harvard University in 1913, Ibid., p. 106.)
15  Beatrice Webb, p. 193.
16  My Life, p. 247.
An example of the connection between Lenin and the Fabians is the fact that Lenin’s Imperialism(International Publishers), was largely based on J.A. Hobson’s Imperialism (1902). J.A. Hobson was a prominent leader of the Fabian Society. (Facts on Communism, vol. 1, Committee on Un-American Activities, House of Representatives, December, 1959, p. 43, Also Fabian News, September, 1893, p. 30.)
17  Bela Hubbard, Political and Economic Structures, Caxton Printers, Caldwell, Idaho, 1956, p. 111.
Mr. Hubbard, a retired geologist, has written a most lucid account of the twisting of economic theories by political ideology in recent world history.
A frank exposition of the Fabian permeation of the Liberal Party (as well as other parties) was printed in the Fabian Essays in Socialism, 1889, p. 215.
This permeation of the Radical Left, undoubted fact though it is of present day politics, is worth a little further attention; for there are two possible and tenable views as to its final outcome. One is that it will end in the slow absorption of the Socialist in the Liberal Party, and that by the action of this sponge-like organism the whole of the Rent and Interest will pass into collective control without there ever having been a party definitely and openly pledged to that end. According to this theory there will come a time, and that shortly, when the avowed Socialists and the much socialized Radicals will be strong enough to hold the balance in many constituencies, and sufficiently powerful in all to drive the advanced candidate many pegs further than his own inclination would take him. Then, either by abstention or by actual support of the reactionary champion at elections, they will be able to threaten the Liberals with certain defeat. The Liberals, being traditionally squeezable folk (like all absorbent bodies), will thus be forced to make concessions and to offer compromises; and will either adopt a certain minimum number of the Socialistic proposals, or allow to Socialists a share in the representation itself. Such concessions and compromises will grow in number and importance with each successive appeal to the electorate, until at last the game is won.
18  Beatrice Webb, p. 152.
19  The Fabian News from 1892 to the present is studded with members from countries all over the world. The United States leads in the number of foreign Fabian applications.
20  Leonard S. Woolf, International Government, N.Y., Brentano’s, 1916, quoted in Fabianism In The Political Life of Britain, by Sister McCarran, pp. 32-33. Sister McCarran observes: “The plan in Woolf’s book bears comparison with Wilson’s League of Nations and with the present United Nations organization. Possibly it has a greater likeness to the latter.”
L.S. Woolf is a veteran leader of the Fabian Society and was a life-long colleague of J.M. Keynes.
21  William L. McGrath, President of the Williamson Heater Company, Cincinnati, Ohio, The Communist Issue in the 38th International Labor Conference of the International Labor Organization, Geneva, Switzerland, June, 1955 (mimeographed), p. 2.
Mr. McGrath has made an exhaustive study of the I.L.O. as a delegate to that body for a number of years. The following are some of his observations:
The I.L.O. originated with the League of Nations, continued in existence after the abandonment of the League, and is now an agency of the United Nations. It is therefore an international body having an official standing with Governments the world over, including our own.
In its earlier years the I.L.O. devoted its efforts to matters dealing directly with Labor, and did excellent constructive work. Its objective was that on endeavoring to raise living standards of employees all over the world; helping to get the workers better working conditions, fuller recognition of their rights, etc.
However, as State Socialism came into the ascendancy in Europe and the concept of the Planned Economy and the Welfare State gained broad political acceptance, the I.L.O. stepped beyond the field of labor proper, into the field of government itself; and under the pretext of “helping the working man,” has put forward a whole series of proposals, in the form of conventions and recommendations, which, if adopted by member countries, might of necessity force their Governments into a socialistic mold.
22  Fabianism In The Political Life of Britain, p. 33.
23  Ibid., p. 23n.
24  Fabian News, London, June, 1892, p. 19, “Local societies are requested to note that it is not desirable to make any change in the name by the addition of the word ‘Socialist’ to ‘Fabian.’ ”
25  Sidney Webb, Socialism In England, London, 1889, pp. 20-21.
26  Bela Hubbard, Political And Economic Structures, pp. 116-117.
27  Oskar Lange is a classic example of how a Kremlin agent can operate in Fabian socialist circles and capitalize personally on the cloak of respectability such an affiliation gives him. A chronological account of his career includes: student London (Eng.) School of Economics, 1929; traveling fellow, U.S. Rockefeller Foundation, 1934-36; lecturer on economics, University of Michigan, 1936; lecturer on economics, University of California, 1936-38; Professor of economics, University of Chicago, 1939-43; (reference—Who’s Who in America, 1948-49).
Lange, with his background as graduate of the London School of Economics, had no difficulty in passing himself off as a Fabian socialist. (The London School of Economics was founded by Sidney Webb, head of the Fabian Society.)
While in the United States, Professor Lange accumulated a record of activity in a score of Communist fronts. Attempts to expose him were shouted down by “liberals” and “leftists” as “red baiting” and “witch hunting.” Lange’s Fabian comrades supported him unstintingly and used his books and articles as authoritative sources to prove left-wing claims. (Lange invokes as his authorities such fellow Fabians or Socialists as J.M. Keynes, G.D.H. Cole, Bertrand Russell and A.C. Pigou in his On the Economic Theory of Socialism.)
Lange’s disguise as a “mild socialist” was so well performed that he even attacked the Leninist doctrine of world revolution. He wrote: “I have not the slightest illusion about the Soviet Union being a ‘Socialist’ state . . .” The Modern Quarterly, Summer 1940, p. 20.
With the invasion of Poland by Soviet armies and the installation of the communist government in that country, Oskar Lange suddenly blossomed out as Ambassador from red Poland to the United States. In Congressional testimony the charge was made that Lange, while Ambassador, had clandestine meetings with Gregory Silvermaster, head of a Soviet espionage cell in Washington, D.C. Web of Subversion, by James Burnham, p. 184. Lange is still invoked as an authority on economic matters and his booklet, On the Economic Theory of Socialism, is required reading at Harvard’s economic department today. (Spring term 1959-60.)
History of Economic Analysis, J.A. Schumpeter, p. 986.
As we know, Marx himself had not attempted to describe the modus operandi of the centralist socialism which he envisaged for the future. His theory is an analysis of the capitalist economy that is no doubt geared to the idea that this economy, by means of the inevitable “breakdown” and of the “dictatorship of the proletariat” resulting from this breakdown, will give birth to the socialist economy; but there is a full stop after this and no theory of the socialist economy that deserves the name follows. Most of his disciples, as we also know, evaded the problem instead of meeting it. . . .
28  Oskar Lange, et al., On the Economic Theory of Socialism, University of Minnesota Press, Minneapolis, 1956, p. 57.
29  Benjamin C. Lippincott, introduction to On the Economic Theory of Socialism, p. 4.
30  Margaret Cole, Beatrice Webb, p. 190.
31  Ibid., p. 191.
32  Ibid., pp. 193-194.
33  Sub-Committee to Investigate the Administration of the Internal Security Act and other Internal Security Laws of the Committee on the Judiciary, Chairman, Senator Pat McCarran; (Institute of Pacific Relations Hearing, Part 13, April 1952, p. 4509).
An interesting corollary to this question was the fact that the Communist publishing firm, Workers Library Publishers, advertised the Webb book, Soviet Communism, as a free bonus along with a subscription to the Soviet magazines, The Communist International and The International Press Correspondence (Inprecorr). It was also offered as a free bonus with the magazine, The Communist.Reference, an advertisement in the Communist magazine, New Masses, May 18, 1937, p. 27).
*  Kitty Muggeridge and Ruth Adam, Beatrice Webb—A Life, Alfred A. Knopf, New York, pp. 241-2.
34  Intelligent Woman’s Guide to Socialism and Capitalism, p. 470.
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