The Lies of Keynesian Economics with Peter St Onge - WBD670

Peter St Onge is an Economist at the Heritage Foundation
and a Fellow at the Mises Institute. In this interview, we
discuss the differences between Keynesian and Austrian
economics, the role of marketing in shaping public opinion,
and the potential of Bitcoin to displace central banks and
cut off one of the main channels that governments use to
seize people's resources.


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Keynesian economics developed in the wake of the Great
Depression of the 1930s. Its aim was to stabilise the
volatility caused by market forces through the application
of government and central bank resources. Its critics state
it has opened up a range of tools that governments have
exploited for short-term gain, whilst building up ever
greater problems for future generations.


Keynes was mocked by major contemporary figures. Winston
Churchill, who didn’t believe that state borrowing and
expenditure could provide permanent additional employment,
famously once said “If you put two economists in a room,
you get two opinions, unless one of them is Lord Keynes, in
which case you get three opinions.”


And yet, governments, on both sides of the political
debate, seem to be currently addicted to greater monetary
and fiscal interventions in the economy than at any time
since the 1930s. Such actions started in 2008, but have
continued apace since. They are a major factor in why
global debt now stands at an eye-watering $305 trillion.


Hayek, the famous Austrian economist, foresaw the coming
crisis, concluding that monetary policy only does harm to
an economy. In 1976 he called for the denationalisation of
money. In a famous 1984 interview, he stated “I don't
believe that we should ever have a good money again before
we take the thing out of the hands of government… all we
can do is by some sly or roundabout way introduce something
they can't stop.” Hayek essentially foresaw Bitcoin.


Unsurprisingly, Bitcoin’s trajectory, as an incorruptible
digital hard money, started as the deflated global economy
was patched up with Keynesian policies in 2009. Over 14
years later, as these policies become ever more
unsustainable, it seems like we’re on the cusp of a swing
of mainstream opinion away from Keynesian policies, to
policies predicated on Austrian economic principles. And
Bitcoin could be the centre of this new paradigm.