Politicians are prone to making errors when trying to look familiar with something about which they know very little.
In 2010, Barack Obama embarrassed himself by claiming to be a Chicago White Sox fan, even as he found it impossible to name one player, bounded into “also” liking the Cubs, and then flubbed the name of the Sox home stadium, calling Comiskey Park “Cominsky Park”.
But this might just take the proverbial cake. Recently livestreaming an extemporaneous monologue promoting government-mandated wealth redistribution, Congresswoman Alexandria Ocasio-Cortez (D-NY) decided to boost her blather with, well, some wisdom from one of the 20th Century’s best-known economists, “Milton Keynes”.
Thing is, there isn’t an economist named “Milton Keynes”.
There’s a town northwest of London called Milton Keynes, but there’s never been an economist by that name.
The great “Milton Keynes” is AOC’s fantasy beast, a unicorn hybrid of hardcore socialist, inflationist, and “full employment” British economic theorist John Maynard Keynes (whose ideas heavily influenced FDR and numerous Presidents after him, almost brought the American economy to its knees, and are still being peddled in maudlin economics courses like those AOC must have taken) and the legendary “semi-free”-market economist, icon of the “monetarist” Chicago School of economics, Milton Friedman.
By suffering through her vide-ode to collectivism, money-pumping, and economic ignorance, one can tell AOC meant so-called “economist” JMK, because the gist of her classist, Marxist claptrap is that this great Keynes of a century ago predicted that productivity would grow in the US (duh), but that this higher productivity – yeah, you can predict it – hasn’t really “helped the poor”:
The problem is that those advancements (in productivity) have not been enjoyed by the very people who are actually producing the goods in our society.
Which, as I recently reported, reiterates her erroneous, implied assumption that the owners of businesses don’t work or invest workplaces with multitudinous contributions that are essential to the production of the product or service being sold.
Such a notion is so false it’s insulting. If one wants to play the Marxist game of “only physical laborers” matter, one had better wake up to the fact that if it weren’t for “wealthy” business owners offering employees things that only savings and invested capital can offer -- tools, power, heat, workplaces, distribution methods, research funds, loans, and more – the employees would have far fewer opportunities to utilize their skills, or even acquire any skills at all.
Additionally, one of the most fundamental laws of economics is that of productivity gains. Free market competition for the consumer interest incentivizes business owners to refine their processes, find ways to conserve, reduce production costs and be more productive: to make more for less because the consumer wants to get more for less, not less for more.
That’s why the first lecture I offer any new class discusses the ancient simple machines like the inclined plane. Like us, ancient people tested devices that could help them work. By creating the inclined plane, ancient humans were able to lift heavy objects along the angle, rather than straight up, extending the distance, and, thus, decreasing the amount of work per unit of distance. This allowed one man to raise a heavy object when it previously required two, allowing each man to do more, freeing up the second man to take on a new project.
Economics is about how humans act to better their lives in a world of challenges and scarcity, and the market itself is a simple machine, allowing for division of labor, focus of skills, trade, and greater productivity. Studying this lets one see how AOC’s claim that the “worker” has not benefited from greater productivity is one of the most absurd falsehoods in the history of economics.
The entire structure of human endeavor and peaceful trade is predicated on bettering lives through greater productivity. That’s why DVD players that once cost $1,500 dollars were soon supplanted by DVD players that cost $240, why it takes far less arable land to grow food for a bigger population, and why, as Reason Editor-in-Chief Katherine Mangu-Ward and John Stossel have reported, American life is better, health is better, and work is safer for the vast majority of people.
As W. Michael Cox and Richard Alm, co-authors of the book, “Myths of Rich and Poor: Why We’re Better Off Than We Think” wrote for the Foundation for Economic Education in 2001:
In the early 1970s, it took a month of work to afford a color television. Now, it’s just three days. In a quarter century, the work-time price of a cellular telephone plunged 97 percent. A hand-held calculator now costs 45 minutes on the job, down from 31 hours in 1972.
The need of those so-called “exploiters” to cater to the consumer desire of “more for less” has driven them to compete and be more productive. So, who’s exploiting whom? Perhaps the entire nature of economics is peaceful trade based on mutual benefit, and it always, always, leads to greater productivity because THAT’S WHAT PEOPLE WANT.
Ironically, the only thing that can stand in the way of this better life through productivity gains is… government. Regulations and taxes hamper productivity. And, more specifically, the invisible enemy of lower-prices through productivity is inflation, and it was Keynes’s fantastical suggestion that a government or its licensed banking monopoly engage in constant inflation of the money supply.
It is this expansion of the money supply – this inflation – that erodes the buying power of every unit of money in circulation, weakening the incredibly beneficial power of productivity.
It’s this expansion of the money supply that AOC has openly embraced as a core of her economic fiction called “Modern Monetary Theory”.
So is it any surprise that she should get it wrong when talking about the two most popular economic figures (Keynes wasn’t a degreed economist) of the last century?
Not at all.
And we ought to expect that she’ll keep getting economics wrong as long as she looks to the state to control people’s lives.