Two years later to the day, in a lecture delivered shortly after his arrival in the U.S., Mises described how the great experiment really looked like:
We are witnesses to the most frightful and phenomenal occurrence in human history: the decay of Western civilization. London, one of the centers of this civilization... is almost completely destroyed. The buildings of the Parliament of Westminster are in ruins; the House of Commons holds its assemblies in the catacombs. [...] The theater of war is spreading, and the day seems not distant when peace will have lost its last refuge. It is a moral and material collapse without precedent.
2016年4月1日 ... A. A. Home | Blog | Keynes in 1939: The Coming War Will Solve our Unemployment Problem ... Your job is secure only as long as the massive destruction lasts, which logically mean you would feel secure only if you foresaw no end to the war. A strange kind of job ... “If we can cure .”.
The British economist John Maynard Keynes argued that there is a role for government intervention when aggregate demand for goods and services drops, as it did during the Great Depression. Without increased public spending to make up for decreased private spending, he said, an economy will slide into a vicious circle of low demand and low output, ensuring a prolonged period of high unemployment. Government thrift at such times will only deepen the problem. “The boom, not the slump,” said Keynes, “is the right time for austerity.”
In 1939 dark clouds of war were gathering over Europe, but Keynes saw a silver lining: an opportunity to prove his theory correct. He believed that the massive government-funded war mobilization would finally give sufficient stimulus to end the Great Depression. On May 23 of that year Keynes gave his famous BBC radio address, “Will Re-armament Cure Unemployment?” He said, in part:
It is not an exaggeration to say that the end of abnormal unemployment is in sight. And it isn’t only the unemployed who will feel the difference. A great number besides will be taking home better money each week. (And with the demand for efficient labor outrunning the supply, how much more comfortable and secure everyone will feel in his job. ) The Grand Experiment has begun. If it works–if expenditure on armaments really does cure unemployment–I predict that we shall never go back all the way to the old state of affairs. ☆Good may come out of evil. We may learn a trick or two, which will come in useful when the day of peace comes.
邦訳全集25:612頁では☆に “If we can cure unemployment for the wasted purposes of armaments, we can cure it for the productive purposes of peace.”が入る。
When the day of peace did come, the Great Depression was over and England and America were embarked on a long period of rising economic prosperity. In these times of recession and government austerity, it may be good to remember something else Keynes said in his radio address: “If we can cure unemployment for the wasted purposes of armaments, we can cure it for the productive purposes of peace.”
Doing a little more reading on the war economy and post-war expectations. This was interesting - it's from a radio broadcast "Will Re-armament Cure Unemployment" (1939):
"What a difference all this makes! It is not an exaggeration to say that the end of abnormal unemployment is in sight. And it isn't only the unemployed who will feel the difference. A great number besides will be taking home better money each week. And with the demand for efficient labour outrunning the supply, how much more comfortable and secure everyone will feel in his job. There will be other reasons for plenty of anxiety. But on of the worst anxieties is anxiety about getting and keeping work. There should be less of that than for years past.
I have a special extra reason for hoping that trade unionists will do what they can to make this big transition to fuller employment work smoothly. I began by saying that the grand experiment has begun. If it works, if expenditure on armaments really does cure unemployment, I predict that we shall never go back all the way to the old state of affairs. If we can cure unemployment for the wasted purposes of armaments, we can cure it for the productive purposes of peace. Good may come out of evil. We may learn a trick or two which will come in useful when the day of peace comes, as in fullness of time it must."
“A great weight is lifted from us… There is no danger of the exchange falling too far. There is no danger of a serious rise in the cost of living. Meanwhile, British trade…”
This is the only known film of Keynes speaking. Its a broadcast about economics, how to share out the world’s resources. But for Keynes, this was no dry science. It was about changing the world for the better.
So often in the past 10 years, I have had prophesited evil.
But now, great weight is lifted from us, great tension retreats.
There is no danger of the exchange falling too far.
There is no danger of a serious rise in the cost of living.
The worst I had expected would be returned to the prices some two years ago.
Meanwhile, British trade will recieve an enormous stimulus much more investors have yet realized.
It is a wonderful thing for our businessmen and our manufacturers and our unemployed to taste hope again. But they must not allow anyone to put them back in the gold cage, where they have been paining out their hearts all these years.
The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (Council on Foreign Relations Books (Princeton University Press)) Kindle版 Benn Steil (著)
This was “a wonderful thing,” Keynes said in rare still-available filmed footage from October 1931. Now, he insisted, British businessmen and unemployed workers “must not allow anyone to put them back in the gold cage, where they have been pining their hearts out all these years.” 74 Britain had, “at one stroke … resumed the financial hegemony of the world,” he offered, somewhat optimistically. 75
“It is a wonderful thing for our business men and our manufacturers and our unemployed to taste hope again. But they must not allow anyone to put them back in the gold cage, where they have been pining out their hearts all these years.” (News broadcast quoted in Backhouse and Bateman, 2006, p.11)
Backhouse, R.E. and Bateman, B. W. (2006), ‘A cunning purchase: the life and work of Maynard Keynes’, in Backhouse and Bateman (eds), The Cambridge Companion to Keynes, Cambridge: Cambridge University Press.
The Cambridge Companion to Keynes (Cambridge Companions to Philosophy)Kindle版
Thus, in a news broadcast on the occasion of Britain's departure from the Gold Standard in 1931, he focused on the psychological importance of the change: ‘ It is a wonderful thing for our business men and our manufacturers and our unemployed to taste hope again. But they must not allow anyone to put them back in the gold cage, where they have been pining their hearts out all these years.’ 10
In this rare film of him from October 1931 after the UK abandoned the interwar gold exchange standard (on September 19, 1931):
The Eurozone and EU are the new “gold standard” and “gold cage” of today. If he were here today, I’d like to think Keynes would have been pro-Brexit.
There is also an amusing footnote to this 1930s piece of history.
Ludwig von Mises, prize buffoon of the Austrian school, made a prediction about what would happen after the UK abandoned the gold shackle:
“In September 1931, Ursula Hicks (wife of John Hicks) was attending Mises’ seminar in Vienna when England suddenly announced it was going off the gold exchange standard. Mises predicted the British pound would be worthless within a week, which never happened. Thereafter, Mises always expressed deep skepticism about the ability of economists to forecast.” (Skousen 2009: 286, n. 2).
Mises’ prediction was falsified. By contrast, Keynes was vindicated in predicting that British trade would benefit from abandoning the gold exchange standard and from the currency depreciation that resulted.
Now this secondary expenditure will be much better spread and easier to meet than the initial expenditure. For the extra ... state of affairs. If we can cure unemployment for the wasted purposes of armaments, we can cure it for the productive purposes of peace. Good may come out of evil. We may learn a trick or two which will come in useful when the day of peace comes, as in the fullness of time it must.
Source: British Movietone Dateline: Date: 01/10/1931 00:00 AM
Famous economic expert predicts great future for Britain as result of gold standard suspension.
Close shot of Mr Keynes sitting at desk. CU of same.Says:
"There really seems to be some providence that watches over this country. Two months ago we were in an impossible position. For years passed our industry had been strangled by the exchange value of our money being to high, with the inevitable results that the cost of our goods was also to high for foreign markets. How on earth were we to get lose in an honourble way? For our bankers who had accepted foreign money at high exchange value felt that it would be wrong to change the value of our money voluntarily.
As events have turned out , change has been forced on us under circumstances exordinarily fortunate and favourable. We have nothing to fear, honestly nothing. So often in the past ten years I have had to proficy evil but now a great weight is lifted from us, the great tension relieved.There is no danger of the exchange falling to far, there is no danger of a serious rise in the cost of living. The worse I shall expect will be a return to the prices of some two years ago. But meanwhile British trade will have received an enormous stimulous, much more than most of us have yet realised.
it is a wonderful thing for our business men and our manufacturers and our unemployed to taste hope again, but they must not allow anyone to put them back in the gold cage where they have been pining their hearts out all these years."
Debemos temer a ser esclavos de las viejas ideas que tienen nuestras autoridades que,
sin darse cuenta de la imposibilidad de volver al viejo patron oro, nos quieren llevar tan cerca de él como puedan.
Esto no es lo que deberiamos estar pensando.
Deberiamos asegurar el valor futuro de nuestra moneda en mercados extranjeros, de manera de ser estables y al mismo tiempo, realizar un ajuste sobre nuestros salarios, nuestra deuda nacional y demâs cosas.
Es algo maravilloso para nuestros comerciantes.
We must free ourselves from the bondage of old ideas, without realizing the impossibility of returning to the old gold standard , we want to bring as close to him as possible . This is not what we should be thinking. We should ensure the future value of our currency in foreign markets , so as to be stable and at the same time , make an adjustment on our wages , our national debt and other things . It's a wonderful thing for our merchants .
We must free ourselves from the bondage of old ideas,
that I hard qualittize whose those recognize the impossibility of restoring to the old gold standard ,
we would like get it back near to close as I can .
This is not what we should be thinking. We ought to fix the future value of our money in foreign markets ,
so as to be stable and at the same time , right adjustment on our wages , our national debt and so on.
In the early days of the war, when all sources of comfort to our spirits were at a low ebb, there came into existence, with the aid of the Pilgrim Trust, a body officially styled the'Council for the Encouragement of Music and the Arts', but commonty known from its initial letters as CEMA It was the task of CEMA to carry music, drama and pictures to places which otherwise would be cut off from all contact with the masterpieces of happier days and times : to air-raid shelters, to war-time hos- tels, to factories, to mining villages. ENSA was charged with the entertainrnent of the Services the British Council kept contact with other countries overseas the duty of CEMA was to maintain the op- Portunities of artistic performance for the hardpressed and often exiled civilians. With experience our ambitions and our scope increased. I should explain that whilst CEMA was
started by private aid, the time soon came when it was sponsored by the Board of Education and entirely supported by a Treasury grant. We were never given much money, but by care and good housekeeping we made it go a long way. At the start our aim was to replace what war had taken away but we soon found that we were providing what had never existed even in peace time. That is why one of the last acts of the Coalition Government was to decide that CEMA with a new name and wider opportunities should be con- tinued into time of peace. Henceforward we are to be a permanent body, independent in constitution, free from red tape, but financed by the Treasury and ultimately responsible to Parliament, which will have to be satisfied with what we are doing when from time to time it votes us money. If we behave foolishly, any Member of parliament will be able to question the Chancellor of the Exchequer and ask why. Our name is to be the Arts Council of Great Britain. I hope you will call us the Arts Council for short, and not try to turn our initials into a false, invented word. We have carefully selected initials which we hope are unpronounceable. I do not believe it is yet realised what an important thing has happened. strange patronage of the arts has crept in. It has happened in a very Enghsh, informal, unostentatious way-ha1Fbaked if you like. A s e mi-independent body is provided with modest funds to stimulate, comfort and suppoft any societies or bodies brought together on pfivate or local
initiative which are striving with serious purpose and a reasonable prospect of success to present for public enjoyment the arts of drama, music and painting. At last the public exchequer has recognised the support and encouragement of the civilising arts of life as part of their duty. But we do not intend to socialise this side of social endeavour. Whatever views may be held by the lately warring parties, whom you have been hearing every evening at this hour, about socialising industry, everyone, I fancy, recognises that the work of the artist in all its aspects is, of its nature, individual and free, undisciplined, unregimented, uncontrolled. The artist walks where the breath of the spirit blows him. He cannot be told his direction he does not know it himself. But he leads the rest of us into fresh pastures and teaches us to love and to enjoy what we often begin by rejecting, enlarging our sensibility and purifying our instincts. The task of an official body is not to teach or to censor, but to give courage, confidence and opportunity. Artists depend on the world they live in and the spirit of the age. There is no reason to suppose that less native genius is born into the world in the ages empty of achievement than in those brief periods when nearly all we most value has been brought to birth. New work will spring up more abundantly in unexpected quarters and in unforeseen shapes when there is a universal opportunity for contact with traditional and contemporary arts in their noblest forms.
But do not think of the Arts Council as a schoolroaster. Your enjoyment will be our first aim. We have but little money to spill, and it will be you yourselves who will by your patronage decide in the long run what you get. In so far as we instruct, it is a new game we are teaching you to play-and to watch. Our wartime experience has led us already to one clear discovery the unsatisfied demand and the enormous public for serious and fine entertainment. This certainly did not exist a few years ago. I do not believe that it is merely a war-time phenomenon. I fancy that the BBC has played a big part, the predominent part, in creating this public demand, by bringing to everybody in the country the possibility of learning these new games which only the few used to play, and by forming new tastes and habits and thus enlarging the desires of the listener and his capacity for enjoyment. I am told that today when a good symphony concert is broadcast as many as five million people may listen to it. Their ears become trained. with what anticipation many of them look forward if a chance comes their way to hear a live orchestra and to experience the enhanced excite- ment and concentration of attention and emotion, which flows from being one of a great audience all moved together by the surge and glory of an orchestra in being, beating in on the sensibilities of every organ of the body and of the apprehensi on. The result is that half the world is being taught to approach with a livelier appetite the hving perform ef and the work of the artist as it comes from his own hand and body, with the added subtlety of actual flesh and blood.
https://www.coe.int/t/dg4/cultureheritage/culture/Completed/STAGE/DGIV_CULT_STAGE(2003)4_EN.pdf “I do not believe it is yet realised what an important thing has happened. State patronage of the arts has crept in. …. At last the public exchequer has recognised the support and encouragement of the civilising arts of life as part of their duty” said John Maynard Keynes, the first Chairman of the Arts Council of Great Britain, and he continued describing the purpose of the Arts Council: “The purpose of the Arts Council of Great Britain is to create an environment, to breed a spirit, to cultivate an opinion, to offer a stimulus to such purpose that the artist and the public can each sustain and live on the other in that union which has occasionally existed in the past at the great ages of a communal civilised life.” John Maynard Keynes, in a radio broadcast quoted in the Report of the Royal Commission on National Development in the Arts, Letters and Sciences.1949-1951, at http://www.nlc-bnc.ca/2/5/h5-400e.html
In 1942 Keynes was elevated to the peerage and took his seat in the House of Lords, where he sat on the Liberal benches. Around the same time he became chairman of the newly formed Committee for the Encouragement of Music and the Arts which, before the end of the war, was renamed the British Arts Council. Keynes described the purpose of the Arts Council in a radio broadcast:-
The purpose of the Arts Council of Great Britain is to create an environment, to breed a spirit, to cultivate an opinion, to offer a stimulus to such purpose that the artist and the public can each sustain and live on the other in that union which has occasionally existed in the past at the great ages of a communal civilised life.
［アーツカウンシル：その政策と希望］ 「私たちの最初の目標は戦争が私たちから奪い去ったものを取り戻すことでした。しかし程なく、私たちは平和な時代にすら存在したことのなかったものを提供しようとしている、ということに気がついたのです。だからこそ、C.E.M.A.（訳注：Council for the Encouragement of Music and the Arts音楽・芸術振興評議会、Arts Council of Great Britainの前身）は、新しい名前とより幅広い機会を与えられ、平和の時代にも存続し続けるべきだ、という決定が、連立政権の最後の決議の中に含まれていたのです。これから、私たちは、憲法で独立が保障され、官僚主義に束縛されず、しかし国庫から資金提供を受ける恒久的な機関となるのです。英国議会が私たちへの予算配分を議決する時はいつも、英国議会は私たちの活動に満足していなければなりません。つまり結局のところ、私たちは英国議会に対する責務を有しているのです。もし、私たちが愚かな振る舞いをすれば、国会議員は誰もが財務大臣に問うことができるでしょう、なぜ（訳注：アーツカウンシルに予算配分をすべきなのか）と。私たちの名は、Arts Council of Great Britainとなるのです。