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The Journal of Christian Reconstruction ISSN 0360-1420 VOL. VII Summer, 1980 No. 1 The Journal of Christian Reconstruction Symposium on Inflation THE JOURNAL OF CHRISTIAN RECONSTRUCTION This journal is dedicated to the fulfilment of the cultural mandate of Genesis 1:28 and 9:1—to subdue the earth to the glory of God. It is published by the Chalcedon Foundation, an independent Christian edu­ cational organization (see inside back cover). The perspective of the journal is that of orthodox Christianity. It affirms the verbal, plenary inspiration of the original manuscripts (autographs) of the Bible and the full divinity and full humanity of Jesus Christ—two natures in union (but without intermixture) in one person. The editors are convinced that the Christian world is in need of a serious publication that bridges the gap between the newsletter-magazine and the scholarly academic journal. The editors are committed to Chris­ tian scholarship, but the journal is aimed at intelligent laymen, working pastors, and others who are interested in the reconstruction of all spheres of human existence in terms of the standards of the Old and New Testa­ ments. It is not intended to be another outlet for professors to professors, but rather a forum for serious discussion within Christian circles. The Marxists have been absolutely correct in their claim that theory must be united with practice, and for this reason they have been success­ ful in their attempt to erode the foundations of the non-communist world. The editors agree with the Marxists on this point, but instead of seeing in revolution the means of fusing theory and practice, we see the fusion in personal regeneration through God’s grace in Jesus Christ and in the extension of God’s kingdom. Good principles should be followed by good practice; eliminate either, and the movement falters. In the long run, it is the kingdom of God, not Marx’s “kingdom of freedom,” which shall reign triumphant. Christianity will emerge victorious, for only in Christ and His revelation can men find both the principles of conduct and the means of subduing the earth—the principles of Biblical law. The Journal of Christian Reconstruction is published twice a year, summer and winter. Each issue costs $5.00, and a full year costs $9.00. Subscription office and editorial office: P.O. Box 158, Vallecito, CA 95251. Copyright by Chalcedon, 1980. ISSN 0360-1420 THE JOURNAL OF CHRISTIAN RECONSTRUCTION V o l . VII Su m m e r , 1980 No. 1 A CHALCEDON MINISTRY GARY NORTH Editor Table of Contents I. Symposium on Inflation E d ito r’s I ntroduction ...........................................................................................1 I saiah’s C r it iq u e o f I n fl a t io n Gary N o r t h ........................................................................................... 10 I n fl a t io n Is I m m o ra l Tom Rose and Robert M. Metcalf..................................................... 31 R e f l e c t io n s on t h e G rea t G erm a n I n fla tio n Donald L. Kemmerer...........................................................................40 T h e Seco n d G e rm a n I n fl a t io n and D estru ctio n o f t h e M ark Hans Sennholz ......................................................................................53 L u d w ig E rhard and t h e G erm a n E co n o m ic “M ira cle” Bruce Bartlett ......................................................................................72 Se l f -I n f l a t io n : I n fla tio n A nthropology and C o n fid en c e in t h e M ark et P lace Jim W e s t.................................................................................................79 T h e 100 P e r c e n t G o ld Standard: F ram ew ork fo r a St a b l e E co n o m y Mark Skousen......................................................................................... 103 II. Christian Reconstruction H isto rica l R e v is io n ism : A rchaeology and t h e C o n q u est o f C anaan Stan F. Vaninger....................................................................................110 III. Contemporary Theological Trends B e r k o u w e r : T h e E v o lu tio n o f a T w e n t ie t h C e n t u r y T heologian Carl W. B o g u e .................................................................................... 135 IV. Defenders of the Faith J a m e s H e n l e y T h o r n w e l l Tommy Rogers .................................................................................... 175 Continued on next page Continued V. Book Reviews The Golden Constant: The English and American Experience (by Roy W. Jastram) Gary North, reviewer................................. 206 CAPITALISM: Sources of Hostility (ed. Ernest van den Haag) Tommy W. Rogers, reviewer............................................................ 213 The Invisible Government (by Dan Smoot) Tommy W. Rogers, reviewer............................................................ 215 Editor's Introduction 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 international di­ vision of labor which inflation poses increases right along with it. The problem is now a worldwide phenomenon. It is no longer confined 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 con­ fiscated money of its citizens, or its satellites, in order to expand its ser­ vices. 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 presupposition 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 bountiful, and it is only the existence of evil human institutions that restrains nature’s basic pro­ ductivity. 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, “Inflationist of the Twentieth Century,” it has to be the English economist and homo­ sexual, John Maynard Keynes. (His name is pronounced CANES. 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 1 2 JOURNAL OF CHRISTIAN RECONSTRUCTION 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 to-day 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 disappear 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 continuance 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 using hyperbolic language. He was using very precise language. He was calling for fascism, in the name of “responsible” free enterprise. “The central controls necessary to ensure full employment will, of course, involve a large extension of the traditional functions of government.”3 Why is this necessary? Why, to save capitalism from itself! He also called for decentralization and the reign of self-interest.
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