Economic Evolution: Darwin's Idiot Speaks

Part 4 of 6

One of Say’s Laws holds that “we produce to consume”.  This is certainly the underlying theme of the Industrial Revolution with its accompanying exponential growth in production of technology, communication, and energy utilization.  While private financial capitalism grew in capacity and sophistication enough to rescue the U.S. economy from the 1907 financial crisis, by the next crisis adjacent to WW I the “leverage” had become too large, and our Federal Reserve system and income tax was invented out of whole cloth.  So, government achieved a seeming complete control of our economic well-being as noted in the prior paragraph.  Our feeling of economic omnipotence fueling the Roaring Twenties was dashed by the onset of the Depression.  Despite the clear failures abetted by the Federal Reserve system our government and others used the principle of “if a little is good more must be better”.  John Maynard Keynes turned Say on his head, effectively pronouncing that “we consume to produce”. …