THE SUBTLE DEBAUCHERY: Keywords: Debauch the currency, inflation, Keynes, Lenin, Yellen, communism, Soviet Union, Jesuit guerrillas, straw-man fallacy, Ronald Reagan, Margareth Thatcher, St. John Paul II Pope, Centesimus Annus, Teilhard de Chardin, Henri de Lubac, Jacques Maritain, and the Germans Karl Rahner, and Paul Tillich. Tillich, Gustavo Gutierres of Peru, and Jesuits Juan Luis Segundo, Jon Sobrino, Ignacio Ellacuria,

 

Venezuelans with their last loaf from the bread line before leaving to the USA

THE SUBTLE DEBAUCHERY

 

                I began this search for answers by remembering how many people with good intentions embraced the ideas of communalism in the not distant past and failed.

                Life in a prosperous community where opportunity is open to everyone is based in respecting the right of people to decide what to create and what to do with it. This concept is the idea of property. When people freely exchange what they produce or own, the market economy emerges, and people prosper without a “common” plan. It is unnecessary to call it “private”. Tenancy in common is the term appropriate to managing any resource by a group. The larger the group, the more evident it becomes that is not as effective. State property or government property are empty phrases that can be best described as oxymorons.

                Strong communities, as extensions of groups of families, transcend time for many generations. Bureaucrats, technocrats and temporary politicians can only develop a short-term vision of the future they want to impose, and they do it with resources they don’t really own. Communist parties only plan in terms of five years, and they are always revising their plans for their failures to meet the “common” goals. The mask of “scientificism” hid the ignorant arrogance that empowered political leaders that no longer had good intentions. It seems we are only discovering that. What the early communes described as distress and hunger ended in their closing and most people went away searching for a better option. The modern communist regimes have been fatal. They are difficult to escape from. They used intentional famines in the last hundred years to subdue or eliminate an estimated 200 million people under their system of communal (communist) state farms.

                I continued this search for answers to the questions of why government officials and politicians in campaign are always acting empathetic and charitable with public funds (other people’s money). The key word is acting, from theatrics. In their private lives, they may be with their own money what they pretend as public officials. But they can’t be using the public resources as described in the anecdote of Davy Crockett. Government money is not theirs to give. Why do they get away with? Many people still have a lingering memory of when the powerful kings and lords, popes and bishops, were charitable at their pleasure simple because the right of owning ourselves, our labor, and property was not generalized. Our ancient languages and classic literature reflect this attitude that makes it easy for the new powerful to offer everything for free by the grace of the pork barrel. How we respond to the offers of “free” everything in our system of free people may very well be the force that destroys it.

          

1970 Prophecy

     

               Several decades ago, I used to read a comic strip named Pogo. On the occasion of the birth of Earth Day, Pogo (J. Madison and W. Kelly) looked in the mirror and exclaimed: “We have met the enemy, and the enemy is us”. Ecological hysteria seems to have followed as the substitute ideology-religion after communism and socialism failed. It is just another ploy to transfer the control of resources to the apparatus of the state. Instead of being charitable and empathetic, they have offered during the last fifty years a heroic vision of themselves saving the planet. Half a century later, the people seem to catch on to the fraud. Environmental hysterical catastrophism is waning. Communism ideology and its supporting pseudo-scientific construct died by the end of the XIX, but its political spell dissipated only after 100 years. It is still going around as the latest of a mutating virus, more infectious, and less lethal in appearance. If it is not the ozone hole caused by the gases used in spray deodorant, it is the new ice age caused by emissions from pollution caused by automobiles, only to be substituted by acid rain, or global warning, giant tsunamis, rising tides, or something mysterious and nebulous about the climate, all catastrophes impossible to fully comprehend, but always the accusing finger pointing to the market economy that many people still call capitalism. The government has decided what kind of vehicle you can drive, what can of energy you can use, what kind of lightbulbs, toilets, toasters, ovens, showers, windows, ceiling fans, air conditioners, leaf blowers…you can buy. It has closed mines and power plants, pipelines, refineries, manufacturing plants… It has forbidden pizza ovens, fireplaces and bbq grills and smokers because they use wood. All in the name of saving the planet. Did anybody ever ask why they don’t mention the ozone hole or the ice age anymore?

                Pogo had it right. There is an enemy within; an infection festering inside the scientific/ academic/educational establishment that serves the state. The recent public health crisis caused by the COVID epidemic exposed what has been happening across the educational system, public or private, from elementary to doctoral levels. It is no accident the ideas and actions being promoted as health measures have the same origin as the deteriorating economic and social conditions: Socialism in disguise. It is an error of reason and science.

Great Depression era food line. Photo by D. Lange

                It begins with the fallacy called “the straw man”. The description is simple. You construct a scarecrow with all the ugly adjectives you know, and you give it a name. Then, you beat it to a pulp and declare victory. The enemies of the free and open society saw at the beginning of the XIX century an emerging industrial economy in Europe. They could see the changes in labor that technological change was bringing. Smokestacks were the most popular image of the new era. They saw institutions struggling to emerge out of the government controls of mercantilism. They suffered the horrors of the many senseless wars between royal cousins, and a process of massive emigration from the rural areas that stressed urban growth. They called it “capitalism”. The picture was ugly. Was it what we now understand as capitalism? Was it the same system that has taken a more defined form a century later as an open society with a market economy? The transformation from the “ancien régime” into what we now may call modern times did not happen overnight, like turning on an epoch of history with a light switch. How a free and open society has begun to take shape does not conform to their images that are trapped in their times. Marx, Comte, Popes Pious IX and Leon XIII, C. Bronte, E. Gaskell, C. Dickens, Victor Hugo and the emergence of “realism” in literature describe this period. Marx’s elucubrations about the forces of history had plenty of supporting evidence that he projected into a linear future. The history of human progress has proved him wrong.

It is easy to beat on a straw man fallacy
Everything falls apart

                The observations and criticisms of the literati and intellectuals were turned into the punches that beat the straw man. They were describing a decaying European society and giving something novel for academics to study under the spell and enthusiasm of an infant scientificism. The XIX century political convulsions consumed a decaying Europe, and many alternatives for the future were proposed as a substitute to the capitalism they had imagined. The XX century’s period between world wars provided what they called “the end of capitalism”.

Young J. M. Keynes, 1919
Author of The Economic Consequences of the Peace

                On the other side across the ocean was America suffering the same transformation, but without the chains of the legacy of the old order; capital, ideas and entrepreneurs fled the old world; masses of impoverished war refugees brought their skills and dreams; together they accelerated the maturity of the new order for the centuries. They created the “middle class” that proved the anti-capitalist prophets wrong. By the birth of the XX century, Europe was in ashes and the United States of America had become the most prosperous and powerful nation in the world. America saved Europe from its own errors in WW I at great costs. It did it again in WW II and has been doing it since. But the anti-capitalism mentality was never corrected. Instead, the infectious virus took hold of American institutions with the arrival of many ungrateful academic refugees still fighting with their European legacy. This is how we now have enemies within.

                Reason, confirmed by the facts of history, point to what should have been the end of the argument about the “straw man”. If it is a fallacy, an error in logic, all the intellectual construct that was built upon it is an error too. Remember the parable of the foolish builder who built his house on sand. It rained, floods came, and the winds blew on the house; and it fell. This explains why I continued my search for answers analyzing the alternative that was discreetly used to cover the errors with more errors. Indifferently called Keynesianism or New Economics, and more recently Neo-Keynesianism, these damaging errors have been legislated and empowered governments further in the artful illusionism of free public charity. I have not been alone in this concern, and I mention many original critics and contributors to the science that supports the economic system of free people for those interested in turning the tide of free loafers.

Prime Minister Margareth Thatcher and President Ronald Reagan
Two champions of the Cold War meeting at the White House

                Three people are responsible for exposing the fallacy of socialism/communism. Their message was like the storm that blew the house built on sand until it fell. Prime Minister Margaret Thatcher, President Ronald Reagan, and Saint John Paul II Pope, with their clarity of thinking brought the Berlin Wall down, and with it the Soviet Union that was the head of the Comintern (The Communist International). The intellectual work and influence of St. John Paul II has received less attention in the English-speaking world, where a lingering medieval anti-Catholic bias persists. The most extraordinary admission that a century and a half of beating the straw-man was in error came from the Vatican in 1981. In his message to the more than one billion Catholics and the world titled “Laborem Exercens” (1981), he corrected a century of errors of previous popes caused by the fallacy of “the straw man”. He clearly distinguished “early nineteenth century capitalism” from the recent and evident progress made by free markets. Ten years later, he went further with an instruction of hope to all those countries that had gotten rid of the soviet chains. In “Centesimus Annus” (1991) he stated: “If by ‘capitalism’ is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a ‘business economy’, a ‘market economy’ or simply a ‘free economy’.”

President Ronald Reagan meeting Pope John Paul II
Two champions of the Cold War at the Vatican

                Unfortunately, the intellectual rot was already inside the Vatican, but particularly, in many of the 1,340 Catholic universities around the world, all of them operating as “seminars” for future clerics. The radicalization of the Christian churches, the Catholic Church included, was led by the radical Jesuit theologians that preached anti-capitalism, anti-Americanism, and frankly, an anti-Christ message who was portrayed as a revolutionary. This had given rise to what became known as “Liberation Theology”, but the seed was planted during the French revolution’s aftermath. Joseph de Maistre (1820) and Félicité Lamennais (1829), lamenting the excesses of the French Revolution’s anti-clerical and secular violence, were critical of “extreme individualism”. They associated it, not only with the emergence of biblical Protestantism, but with England and the Germanic northern regions, traditional enemies of anything French. The seed grew into a new theology championed by Teilhard de Chardin, Henri de Lubac, Jacques Maritain, and the Germans Karl Rahner, and Paul Tillich. Tillich once said, “Any serious Christian must be a socialist”. In the usually enigmatic Jesuit talk, the attack on “extreme individualism” leads invariably in the minds of the listener to its opposite: collectivism.

                The new theology was Marxist in its methodology and emphasized the "liberation of the oppressed". It became the urbane and tolerated ally of the radical guerrillas that had already been linked to the Soviet expansionism in Latin America. It replicated later in Africa, and finally in India. In Latin America, it took control of Jesuit universities and even of the CELAM, the Conference of Latin American Bishops. The better-known intellectual leaders were Gustavo Gutierres of Peru, and Jesuits Juan Luis Segundo, Jon Sobrino, and Ignacio Ellacuria. A disproportion of the liberation theologians of Latin America were really European expatriates, many from Spain and the Vasque country. Sobrino is credited with the phrase “preferential option for the poor”. The Jesuit Province of Central America became the recruiting and training ground, not just of priests and nuns, but of guerrilla commanders and medics. The civil wars of the 1960s to the 1980s in Central America are directly linked to their activism. It is no coincidence that St. John Paul II made several extended visits to this area, even to Nicaragua, where the new revolutionary government of the Sandinistas was directed by Jesuit priests. They were promptly expelled from the order and defrocked.

Pope John Paul II reprimanding Fr. R. Cardenal
upon landing at Managua´s Airport.
On the left, the still dictator Daniel Ortega

                The position of Saint John Paul II could not have been clearer to the Catholic gray than when in 1981 he intervened the Jesuit order. Time reported it as “…a move interpreted as a warning to all religious orders, he suspended the normal workings of the Jesuit Constitutions, removed the acting leader of the organization and replaced him”. It was the greatest blow to the Society of Jesus since the order was supressed in 1773 by Pope Clement XIV. The Polish pope did not allow the election of a new Superior General for years, and his successor Pope Benedictus XVI continued the effort to reform the Jesuits. Unfortunately, when pope Ratzinger retired, they came back with a vengeance and managed to elect an Argentinian Jesuit that has been undoing what his two predecessors had done. Pope Francis is woke, has fallen for all things environmental, caved under pressure from Xi by accepting Xi’s appointing a bishop for Shanghai, and negotiated with Secretary of State Blinken the censorship of the United States Conservative Bishops who wanted to excommunicate Biden and Pelosi for promoting abortion without limits while pretending to be “faithful Catholics”. He even pardoned and reinstated the communist priests St. John Paul II had defrocked. The reform St. John Paul II begun failed.

                What about Thatcher’s Conservative Revolution and Reagan’s New Federalism? England just elected again a Labor (Socialist) government, and the United States seems to be transitioning from an extreme Keynesian government (Fabian socialism) to the first communist government and the end of the representative constitutional republic that stood for nearly 250 years.

Meeting of communist dictators
Miguel Diaz-Canel of Cuba; Daniel Ortega, of Nicaragua; Nicolás Maduro, of Venezuela; and Luis Arce, de Bolivia. Met in Caracas to commemorate the 10th anniversary of Dictator Hugo Chaves death.
They all consolidated their power by debauching their currency with hyperinflations

                 It is obvious to me that what we clearly see happening now in the United States is not an isolated regression, and it did not just happen overnight. In previous pages I devoted a lot of attention to what a “compromise” means when opposing principles and fundamentals are at stake. I refer to Keynesianism as an effort to produce the image of a mixed economy. It can supposedly combine the best the free market can offer with a supposed efficient centralized management the state experts can provide. I compared it to an oil and vinegar salad dressing. To combine it requires a lot of agitation. As soon as agitation stops, the two parts separate naturally because they are not compatible. Keynesianism requires agitation to be justified. It is invited when economic anxiety, a slowdown, and unemployment are forecasted. Then, there is political agitation and Keynesianism gets into the market as an intruder and causes a correction by causing a boom with low interest rates and inflation. More agitation comes as real wages drop and scarce capital is misdirected. Another correction comes and a recession is caused raising interest rates that result in unemployment, and a new correction is needed… The logical conclusion is simple. There is no end to the cycle because agitation is always needed. Agitation is more than a word on paper. It means social convulsion; it means a public state of anxiety and anomie; it means massive transfers of wealth from some groups to others, destruction of scarce capital, price controls, rationing at times and excessive inventories at others. It also means an ever-growing increase in the controls the state has over the lives of the people. It requires the growth of the state apparatus and a growing dependence on the state’s handouts. The list of consequences ends my comments about the Illusionists of Inflation.

                The erosion of the wealth of the people and of the soul of the nation is gradual and difficult to perceive until it is too late. Compromising and negotiating becomes an endless series of crisis. In their error in science, they called it “the business cycle”. The name is a misdirection that evades all responsibility in those that believe that the government should be in absolute control of money, banking and credit. They blame business, who is us, We the People. We are the victims, not the perpetrators.

                I began these meditations remembering how the ideas of living in a perfect and happy community of well- intentioned people start by eliminating the institution of individual and separable ownership of resources. What if there are no good intentions involved?

                What if Keynesianism never had the intention of correcting what they identified as inherent deficiencies of the market economy? What if they have always known of the required agitation and growing controls? What if they use it to lubricate the path towards their goal avoiding the violent revolution their previous models required?

                In “The Illusionists of Inflation” I gave enough evidence to conclude that John Maynard Keynes was always a socialist, albeit of the Fabian kind. He preached his visions from a comfortable oversized leather armchair while smoking a cigarette and sipping expensive scotch whisky. I also included the following quote about inflation he published in the book that brought him initial notoriety. “The Economic Consequences of the Peace” (1919) became a bestseller with a warning that went unheeded. Keynes had participated as part of the British delegation in the discussions that led to the Treaty of Versailles that ended WW I. He resigned before the treaty was concluded in despair over the extreme reparations and conditions the Allies were imposing on Germany. He had concluded that trying to meet those conditions would inevitably create such internal crisis that Germany would resort to war again. Time proved him correct. He illustrated this point thus:

“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction and does it in a manner which not one man in a million is able to diagnose.”

Keynes predicted the rise of Hitler and other dictators
that would lead to WW II due to hyperinflations

                What I did not indicate is that Keynes attributed this terrifying dictum to the founding father of state terrorism, Lenin. It is usually shortened as “The best way to destroy the capitalist system is to debauch the currency.” A hundred years later, there is still controversy as to its origin as it does not appear in the collected works and documents of the Lenin archives. Critics claim Keynes made it up. In the Journal of Economic Perspectives of the Spring 2009, Michael V. White and Kurt Schuler report their findings on the issue, “It is now possible to show that Keynes based his remark on a report of an interview with Lenin published by London and New York newspapers in April 1919. Keynes’ discussion of inflation in the Economic Consequences can then be read as an extended commentary on the remarks attributed to Lenin in the interview”.

                White and Schuler explain what was happening in 1919 and the consequences that Keynes predicted, “Old governments clinging to power or revolutionaries trying to seize power found, either by design or effect, that inflation was the quickest way to supply their spending wants. By the time Keynes wrote The Economic Consequences of the Peace, events were in train that by 1923 would lead to hyperinflations in Austria, Germany, Hungary, Poland, and Russia. All fit the definition of a hyperinflation as a period where inflation exceeds 50 percent a month for at least three consecutive months”.

                The famous quote appears in Chapter 6 of Keynes’ book, at the end of the following paragraph, “Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers’, who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery. Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose”.

 

V. U. Lenin
Father of modern state sponsored
terrorism through inflation

                The interview with Lenin while he was in Geneva was published on April 23, by The New York Times and in London by the Daily Chronicle. One of the interviewer’s notes describes Lenin’s obsession with a plan to destroy the power of money in the capitalist system. Within a rambling series of attacks, Lenin describes his personal experience as to how to weaponize monetary inflation describing what he had been doing in the recently created Soviet Union.

 

Keynes leading discussions of the Treaty of Bretton Woods
in 1944 to set new rules of international monetary exchanges
after most monetary systems had been destroyed 

                “Hundreds of thousands of rouble notes are being issued daily by our treasury. This is done, not in order to fill the coffers of the State with practically worthless paper, but with the deliberate intention of destroying the value of money as a means of payment. There is no justification for the existence of money in the Bolshevik state, where the necessities of life shall be paid for by work alone. Experience has taught us it is impossible to root out the evils of capitalism merely by confiscation and expropriation, for however ruthlessly such measures may be applied, astute speculators and obstinate survivors of the capitalist classes will always manage to evade them and continue to corrupt the life of the community. The simplest way to exterminate the very spirit of capitalism is therefore to flood the country with notes of a high face-value without financial guarantees of any sort. Already even a hundred-rouble note is almost valueless in Russia. Soon even the simplest peasant will realize that it is only a scrap of paper, not worth more than the rags from which it is manufactured. Men will cease to covet and hoard it as soon as they discover it will not buy anything, and the great illusion of the value and power of money, on which the capitalist state is based will have been definitely destroyed. This is the real reason why our presses are printing rouble bills day and night, without rest”. The reason why Lenin was announcing this policy to the world followed, “…this simple process must, like all the measures of Bolshevism, be applied all over the world in order to render it effective. Fortunately, the frantic financial debauch in which all Governments have indulged during the war has paved the way everywhere for its application...”

 

                I am sure Secretary of the Treasury Janet Yellen is a good grandmother even if she eats hallucinogenic mushrooms when she goes to China to bow to the officials of the CPC. I am sure she has good intentions every time she orders the printing presses to print more dollars. I am sure the attorney and Wall Street banker Fed Chair Jerome Powell had good intentions every time he raised the interest rates in his efforts to reduce the inflationary effects caused by Grandma Yellen. I am sure he noticed he was burning the brakes at the same time Grandma was pushing the accelerator even more. I am sure they know what they are doing.

 

                     Are you sure? Are the next ones going to have good intentions too?

Chilean President Salvador Allende hosting Fidel Castro during
his state visit. Allende was deposed when inflation reached 170% per year

Citizens in Caracas line up to buy scarce groceries at government control stores
 It could be Denver, or El Paso, or Provo, or Santa Fe, or Riverside...

             

           Think about this announced strategy when you analyze how the firm takeover of Cuba, Nicaragua, and Venezuela happened. Allende’s Chile reached 170% annual inflation. Argentina has had several periods of socialist control and subsequent destruction of their currency. The list should include many countries in Africa and Asia that are still struggling to rid themselves of their socialist or communist heritage, such as: Angola, Chad, Congo, Ethiopia, Ghana, Sierra Leone, Zimbabwe, and Laos. The previous list includes the countries with the highest double-digit current rates of inflation in the world, excepting Turkey, Iran and Syria that have similar inflationary rates under different forms of one-party systems.