The Journal of Christian Reconstruction, Vol. 7, No. 1
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1 7PMVNF 4VNNFS /VNCFS ѮF+PVSOBMPG $ISJTUJBO 3FDPOTUSVDUJPO 4ZNQPTJVNPO *OëBUJPO "$)"-$&%0/16#-*$"5*0/ A Chalcedon Publication [www.chalcedon.edu] 3/31/07 COPYRIGHT The Journal of Christian Reconstruction Volume 7 / Number 1 Summer 1980 Symposium on Inflation Gary North, Editor ISSN 0360–1420 A CHALCEDON MINISTRY Electronic Version 1.0 / September 22, 2006 Copyright © 1980 Chalcedon Foundation. All rights reserved. Usage: Copies of this file may be made for personal use by the original purchaser of this electronic document. It may be printed by the same on a desktop printer for personal study. Quotations may be used for the purpose of review, comment, or scholarship. However, this publication may not be duplicated or reproduced in whole or in part in any electronic or printed form by any means, uploaded to a web site, or copied to a CD-ROM, without written permission from the publisher. Chalcedon Foundation P.O. Box 158 Vallecito, California 95251 U.S.A. To contact via email and for other information: www.chalcedon.edu Chalcedon depends on the contributions of its readers, and all gifts to Chalcedon are tax-deductible. Opinions expressed in this journal do not necessarily reflect the views of Chalcedon. It has provided a forum for views in accord with a relevant, active, historic Christianity, though those views may have on occasion differed somewhat from Chalcedon’s and from each other. A Chalcedon Publication [www.chalcedon.edu] 3/31/07 TABLE OF CONTENTS Copyright Contributors Editor’s Introduction Gary North . .7 1. SYMPOSIUM ON INFLATION Isaiah’s Critique of Inflation Gary North . .19 Inflation Is Immoral Tom Rose and Robert M. Metcalf . .44 Reflections on the Great German Inflation Donald L. Kemmerer . .55 The Second German Inflation and Destruction of the Mark (1933–1948) Hans Sennholz . .71 Ludwig Erhard and the German Economic “Miracle” Bruce Bartlett . .96 Self-Inflation: Inflation Anthropology and Confidence in the Marketplace Jim West . .105 The 100% Gold Standard: Framework for a Stable Economy Mark Skousen . .134 2. CHRISTIAN RECONSTRUCTION Historical Revisionism: Archaeology and the Conquest of Canaan Stan F. Vaninger . .144 3. CONTEMPORARY THEOLOGICAL TRENDS Berkouwer: The Evolution of a Twentieth-Century Theologian Carl W. Bogue . .175 4. DEFENDERS OF THE FAITH James Henley Thornwell Tommy Rogers . .226 A Chalcedon Publication [www.chalcedon.edu] 3/31/07 4 JOURNAL OF CHRISTIAN RECONSTRUCTION 5. BOOK REVIEWS The Golden Constant: The English and American Experience, 1560–1976, by Roy W. Jastram. Reviewed by Gary North . 266 CAPITALI$M: Sources of Hostility, edited by Ernest van den Haag. Reviewed by Tommy W. Rogers . 275 The Invisible Government, by Dan Smoot. Reviewed by Tommy W. Rogers . 278 The Ministry of Chalcedon A Chalcedon Publication [www.chalcedon.edu] 3/31/07 CONTRIBUTORS Bruce Bartlett, M.A., is staff economist for U.S. Senator Roger Jepson (R-Iowa). His articles and reviews have appeared in the New York Times, Wall Street Jour- nal, and the Libertarian Review. He is the author of The Pearl Harbor Cover-Up (1978). Carl Bogue, Th.D., is pastor of a Presbyterian Church in America in Akron, Ohio. He is the author of Jonathan Edwards and the Covenant of Grace (1976). Donald Kemmerer, Ph.D., is professor emeritus of economics at the University of Illinois (Champaign). He served as president of the Committee for Monetary Research and Education. He is the author of Economic History of the United States (1954). Robert Metcalf is the founder of the Christian Studies Center, Memphis, Ten- nessee. Gary North, Ph.D., is the president of the Institute for Christian Economics. He is the author of An Introduction to Christian Economics (1973) and How You Can Profit from the Coming Price Controls (1977). Tommy W. Rogers, Ph.D., is a lawyer in Jackson, Mississippi. His articles and reviews have appeared in the Freeman, Modern Age, and numerous other maga- zines. He is the author of A Demographic Analysis of Poverty in Mississippi, which did not become a best-seller. Tom Rose, M.A., is associate professor of economics at Grove City College, in Grove City, Pennsylvania. He is the author of Economics: Principles and Policy from a Christian Perspective (1977). Hans Sennholz, Ph.D., is chairman of the Department of Economics at Grove City College. He has had hundreds of articles published in magazines, including The Freeman, Private Practice, and the Individualist. He is the author of Age of Inflation (1979). Mark Skousen, Ph.D., served as editor of Personal Finance, the investment newsletter, and presently does private financial counseling. He is the author of Playing the Price Controls Game (1977), The 100 percent Gold Standard (1978), and Mark Skousen’s Complete Guide to Financial Privacy (1979). His Insider’s Banking & Credit Almanac is published annually. A Chalcedon Publication [www.chalcedon.edu] 3/31/07 6 JOURNAL OF CHRISTIAN RECONSTRUCTION Stan F. Vaninger, M.S., University of Missouri, M.A., Covenant Theological Seminary, is employed by the McDonnel Douglas Astronautics Company. Jim West, M.Div., is a pastor in San Jose, California. A Chalcedon Publication [www.chalcedon.edu] 3/31/07 EDITOR’S INTRODUCTION Gary North Inflation is one of the major scourges of the twentieth century. Nation after nation has been plagued by inflation in this century, yet the blight continues. In fact, the blight gets worse, since the division of labor in the world economy keeps increasing, and the threat to this interna- tional division of labor which inflation poses increases right along with it. The problem is now a worldwide phenomenon. It is no longer con- fined to nations in wartime or the defeated nations immediately after a war. It is now a universal phenomenon of peacetime economies. Why should this be the case? The obvious answer is the growth of the welfare State. The welfare State is messianic. It hopes to save men through legislation. It is necessarily parasitic, for it must rely on the confiscated money of its citizens, or its satellites, in order to expand its services. At zero price, there is greater demand for scarce economic resources than there is supply. Hence, the welfare State cannot possibly meet all the demand generated by its offer of free services. The welfare State is inherently self-destructive, for it operates in terms of a presup- position that nature is fundamentally productive, that it is not under the curse of God (Gen. 3:17–19). The welfare State is supposedly able to overcome the problem of scarcity because nature is inherently boun- tiful, and it is only the existence of evil human institutions that restrains nature’s basic productivity. Therefore, statists conclude, by restructuring the institutions of modern capitalism, the planners can overcome the God-imposed limits on nature. But the planners find that their programs never catch up with demand. They always want to define poverty as the bottom one-third of the nation, and try as they will, they can never collect enough taxes to fund sufficient programs to lift everyone in the nation to the top two-thirds. There is always a bottom one-third. If any single individual must be honored with the medal, “Inflation- ist of the Twentieth Century,” it has to be the English economist and homosexual, John Maynard Keynes. (His name is pronounced CANES. A Chalcedon Publication [www.chalcedon.edu] 3/31/07 8 JOURNAL OF CHRISTIAN RECONSTRUCTION Some low-brow conservatives have referred to him as Sugar Keynes or Candy Keynes, but I’m a scholar and would never dream of stooping to such crass tactics.) Keynes always said he was a defender of the market. He was convinced that the market would enable people to buy many of the things they liked. For example, an unregulated free market allowed him to travel {2} to Tunisia on vacation to buy the sexual favors of Arab boys at remarkably reasonable rates.1 But Keynes was not convinced that the free market could provide full employment to all those who were willing to work at a competitive wage. He was convinced that the State had to intervene to make capital inexpensive enough for all men to be employed. In fact, he actually believed that State intervention could reduce the cost of capital to zero. In his most influential work— the most influential economics book of the twentieth century—The General Theory of Employment, Interest, and Money (1936), Keynes wrote these words in the concluding chapter: Interest today rewards no genuine sacrifice, any more than does the rent of land. The owner of capital can obtain interest because capital is scarce, just as the owner of land can obtain rent because land is scarce. But whilst there may be intrinsic reasons for the scarcity of land, there are no intrinsic reasons for the scarcity of capital.... But even so, it will still be possible for communal saving through the agency of the State to be maintained at a level which will allow the growth of capital up to the point where it ceases to be scarce. I see, therefore, the rentier [lending] aspect of capitalism as a transitional phase which will disap- pear when it has done its work. And with the disappearance of its rentier aspect much else in it besides will suffer a sea-change. It will be, moreover, a great advantage of the order of events which I am advocating, that the euthanasia of the rentier, of the functionless investor, will be nothing sudden, merely a gradual but prolonged con- tinuance of what we have seen recently in Great Britain, and will need no revolution.2 Here is the religion of the messianic State. Keynes knew exactly what he was saying, although his followers would prefer to think he was just 1.