I have heard a lot, a great deal of labour propaganda about possible Keynesian solutions to the current economic woes. They believe the cuts are not only not essential but damaging as they will reduce the amount of money in circulation in the economy but because labour supporters are often ill read they do not put the argument so succinctly
The labour program of simply printing money or the so called programme of quantitative easing was solely target at the Keynesian ideals of increasing the supply of money in the economy. With this extra money the Bank brought Britain bonds (basically we printed fake money to by our own debt). Other nations also brought our bonds and we have to pay them for this and we also pay ourselves because we own our own bonds.
Anyway there our two upshots of this. One that the value of our bonds and the rate of interest on them our key to our long term survival and the value and interest charged on these bond is dependent of the confidence in our ability to repay our debts. Nothing more than this. It’s a delightful and complex cycle of debt and bound. Two all that money printed never reached the pockets of the public, as envisioned by Keynes but instead is floating in virtual banking vacuum doing nothing but service are incalculable debt and being virtual moved from faceless virtual bank to faceless virtual bank.
Both capitalism and Keynesian and even communism where developed well before the new virtual economy was born. In the days of Adam smith and Keynes and Marx capital or money was real. Only Keynes lived in an era when gold was not the deciding factor of the value of a currency and some could argue Keynes and Marx has enabled the move away from currency value being based on Gold or some actual physical resource to the value of a currency being based on largely baseless speculation and rumor. For those of you with short memories I remind you of the bankruptcy of Argentina caused largely by such baseless currency speculation.
Our economy has passed the point where the value of money is based on labor or Gold or even confidence, money now is meaningless collection of abstract numbers. Indeed the belief we have moved the economy beyond boom and bust is built upon the virtualization of money and of the movement of money being far more important than the money itself.
What is the value of one billion pounds, when it never truly existed, when no one ever used it or invested it? What is virtual monies true value?