It’s wonderful when the granular details of why things are they way they are emerge.

John Maynard Keynes.

Developer of the stimulus by govt, and permanent debt ideas now so popular they are accepted by a VERY large percentage of those in govt and out. In academia. In those businesses from which the leaders of academia and govt spring and then traverse back and forth.

In Keynes’s essay, capitalism is a degrading, but necessary way-station on the road to nirvana. Until we reach the coming golden age of prosperity, “We must go on pretending 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 the daylight.” Keynes decries deferred gratification—what he disparaged as “purposiveness”—a failure to live in the present, a dishonest attempt to achieve a “spurious and delusive immortality.”

Remember, he was writing this during the Great Depression. But he understood, correctly, that it would pass and good times would return.

Keynes published in 1930 [an essay], “Economic Possibilities for our Grandchildren.” It’s a fascinating essay. Keynes argues that because of growth, there will come a day when our grandchildren will be much much richer than we are. And when that day comes, we won’t have to work so hard, we’ll be able to enjoy life in all kinds of way that we can’t now.

Keynes associated the quest for immortality and the willingness to defer gratification with the Jews. “Perhaps it is not an accident that the race which did most to bring the promise of immortality into the heart and essence of our religions has done the most for the principle of compound interest and particularly loves this most purposive of human institutions.”

Yikes.

In the podcast, I remarked that I assumed that Keynes was talking about the Jews when he mentioned “the race which did the most to bring the promise of immortality into the heart and essence of our religions…” What I did not explain is the reason for why I assumed he was referring to the Jews. It wasn’t because Keynes was something of an anti-semite. He was, but that’s not the reason. It’s the story Keynes quotes just before this passage. It’s a story about a tailor who never collects his fee for a suit because the customer always offers to double the fee if the tailor waits another year to collect. The customer explains to his children that he’ll never have to pay because the tailor will never be able to resist the higher payment coming in the future.

Here’s the whole passage from Keynes’s essay that puts the quote in context. Sylvie and Bruno is a Lewis Carroll novel that was surely better known in Keynes’s day than in ours:

Let me remind you of the Professor in Sylvie and Bruno: “Only the tailor, sir, with your little bill,” said a meek voce outside the door. “Ah, well, I can soon settle his business,” the Professor said to the children, “if you’ll just wait a minute. How much is it, this year, my man?” The tailor had come in while he was speaking. “Well, it’s been a-doubling so many years, you see,” the tailor replied, a little gruffly, “and I think I’d like the money now. It’s two thousand pound, it is!” “Oh, that’s nothing!” the Professor carelessly remarked, feeling in his pocket, as if he always carried at least that amount about with him. “But wouldn’t you like to wait just another year and make it four thousand? Just think how rich you’d be! Why, you might be a king, if you liked!” “I don’t know as I’d care about being a king,” the man said thoughtfully. “But it dew sound a powerful sight o’ money! Well, I think I’ll wait—” “Of course you will!” said the Professor. “There’s good sense in you, I see. Good-day to you, my man!” “Will you ever have to pay him that four thousand pounds?” Sylvie asked as the door closed on the departing creditor. “Never, my child!” the Professor replied emphatically. “He’ll go on doubling it till he dies. You see, it’s always worth while waiting another year to get twice as much money!” Perhaps it is not an accident that the race which did most to bring the promise of immortality into the heart and essence of our religions has also done most for the principle of compound interest and particularly loves this most purposive of human institutions.

Being a tailor was once a stereotypically Jewish profession. I think there is little doubt that Keynes was referring to the Jews as lovers of compound interest and its role in purposiveness. What intrigued about Keynes’s attitude is the possibility that Keynes’s dislike of savings may have been tied to his anti-semitism or at least tied to his attraction for living in the moment and refusing to defer gratification. Six years after this essay was published, Keynes published The General Theory where he blamed inadequate spending and excessive saving for the economic malaise of the day. Were his social attitudes part of the reason he crafted a theory that condemned living for tomorrow and deferring gratification?