America's Money Machine

178 PART III / DEBACLE OF AN IDEA
true key to economic production, or output, which has nothing to do with
monetary demand and everything to do with human morale-by which
is meant the skill and intelligence of management, the skill and intelligence
of workmen, together with their common understanding of their
task, its importance, and their own importance and significance as human
beings. It is well known that where plant morale is good, productivity can
be increased with little reference to added capital investment. Some of
the best equipped factories have the lowest output.
Until the 1930S Keynes was regarded in Great Britain as an orthodox
economist of brilliant if eccentric tendencies, but he never was admitted
to the inner circle of policy advisers. His star began to shine when the
world grew dark with the credit crisis of 1932. In 1929 he had championed
Lloyd George's proposal for public spending to stimulate employment,
and in a visit to this country he had met and expounded his views
to Franklin D. Roosevelt. They found fertile soil here. An administration
that was then grasping at any flotsam that would hold the economyafloat
after the 1932 debacle seized upon his theories as the framework of the
New Deal. To these developments, as they turned upon Federal Reserve
policy, we may now give our attention.