Economics 101: Money, John Maynard Keynes, and Monty Python

In a couple weeks I'll be at the Idea Camp (you should come; it's free) facilitating a discussion about money. Now, as a caveat, it's worth saying that I don't have any right now. But what I do have are some hard-earned ideas about money, about our culture's relationship to money, and what we might do well to change about that relationship.

Over the next couple weeks I'll be working out some thoughts on this blog, so please feel free to join in the discussion and help me refine my understandings. For starters, a quick foundational discussion of values and economics.

Economics, more than being about money, is about how people make decisions. It's about how we decide what to invest our resources in -- our time, our money, our commitment, etc. The most influential economist of the last century, John Maynard Keynes, went further than to study and describe decision making, he prescribed it:

"For at least another hundred years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight."

The foulness of which he writes is the love of money, a vice known to many as the root of all kinds of evil. Keynes prescribes a subjugation of values such as generosity to this vice for at least 100 years, after which he says society will have become so rich as to throw off such "psuedo-morals" and see "the money-motive at its true value ... a somewhat disgusting morbidity."

Keynesian policy prescription became the basis for much economic thought and policy, including Roosevelt's New Deal. I believe his moral prescription has shaped our country as well.

When John Cleese (of Monty Python fame) first came to America, he says he was struck by the unabashed pursuit of excessive wealth. The British at the time were more reserved about money, he recalls, most being satisfied with a comfortable salary for an honest day's work. But not the Americans.

Keynes' prescription has been realized, with restraint and generosity being caged to let avarice and precaution work their dark magic on our economy. What Keynes did not realize, though, is that decades of economic wizardry would see several generations brought up seeing fair treated as foul and foul as fair, seeing excess praised over simplicity and selfishness rationalized as economical. His prescription for economic growth was also one for risky cultural engineering. As Shumacher asked, How can a system founded on greed ever lead to peace?

And Keynes also seems to have failed to ask the question, Where is the rich man who says, 'I have enough'? He is rare, and often so rich as to be statistically invisible. Bill Gates might fall into this category, and perhaps Buffet and his peers, though he keeps investing. But the millionaire down the street has not stopped his pursuit of wealth, though he lives like the kings of not long ago. I myself hover around the 90th percentile in world income, but I haven't found that financial peace of mind that Keynes promised.

My economic thoughts will buck Keynes and subjugate macroeconomic concerns to personal and (I'm stretching here) universal values. Where Keynes believed that economic development would solve the values problem, I suspect that values will guide us to a more sustainable economy.