America's Money Machine

The Keynesian Influence 175
The fact is, as is apparent to anyone who is willing to look behind the
facade of economic theory, the chief factor in employment is human
beings and their intelligence and morale. A well-managed enterprise can
produce many times the amount of goods as an inefficiently managed
one, and employees with good morale are more productive than employees
with poor morale.
Some day, we may hope, economists will abandon their efforts to explain
and to control the subject matter oftheir discipline by mathematical
formulae and their corollary, laws and regulations, and instead consider
it in the light ofa moral reality within which human beings act and react.
We may note briefly one further fallacy of Keynes' theory of employment.
In today's technology, investment is not made to create employment,
rather to create unemployment. That, at least, is the immediate and
direct purpose ofthe huge investment now going on in various processes
of automation to replace men with machines, which means of course
throwing men out ofwork. This was also a characteristic of the period in
which Keynes was writing-a characteristic which brought forth a school
of thinkers, the "technocrats," who proposed to solve this problem not
by monetary means but with the slide rule and the steam shovel.
The first task in the examination of any system of philosophy is to
analyze its basic propositions. These rest, in every case, upon certain
terms or concepts which require definition. This is peculiarly the case
where a theorist like Keynes treats concepts as solid, palpable quantities
or integers, which can be dealt with in mathematical formulae and equations,
and from which can be derived immaculate, unchangeable corollaries.
This has, of course, been the perennial failing of economists since
Adam Smith. Keynes himself is caustically derisive of the vagueness and
ambiguity of economic terminology.
Thus, speaking of capital formation, capital consumption, and capital
equipment, he says, "I have, however, been unable to discover a reference
to any passage where the meaning of these terms is clearly ex­
plained."4
Again with reference to the term "marginal efficiency of capital," so
common in economic literature, he complains, "But it is not easy by
searching the literature of economics to find a clear statement of what
economists have usually intended by these terms."5
Ofthe classical theory ofthe rate ofinterest, he says again, "Yet, I find
it difficult to state it precisely or to discover an explicit account of it in
the leading treatises of the modern classical school."6
There are others, but the foregoing suffice. Yet for one set ofambigui-