Advocates of big government often tout ideas popularized by 20th-century British economist John Maynard Keynes — ideas such as government stimulus. As historian Paul Johnson notes in his latest Forbes column, though, Keynesian acolytes often pay less attention to the factors that would help boost the “animal spirits” that Keynes labeled as essential to economic growth.
A capitalist economy hums when leading businessmen are bubbling with animal spirits and are prepared to sink their money into risky ventures.
Sadly, the world today is a place in which animal spirits are frowned upon. It would be difficult to imagine anywhere less conducive to the concept than Brussels, from which the economies of nearly 30 nations are directed, or misdirected. It is the first bureaucratic megalopolis, and its bureaucrats look after themselves generously, having just gobbled up salary raises well in excess of the rate of inflation. But these people spend their loot discreetly; otherwise, they wouldn’t last long. Meanwhile, their aim is to make businessmen feel unhappy.
Their latest move is to cap bankers’ bonuses. But the compulsory limits on what people can earn in big business, sure to be followed by similar moves all the way down the food chain, will lower spirits and make entrepreneurs keep their heads down.
In fact, big spenders all over the world, not just in Brussels, are being bullied. The media spot one or two and hugely magnify their iniquity. Politicians then take up the cries of outrage, and before long their parties are competing to come up with punitive legislation. In deed, “punish the rich” is now the chief motivating force in political activity all over the globe. One finds recent examples of it in Australia, Argentina, South Africa and Chile. In China big spending, when it peeps through the curtains of censorship, is taken as a sign of corruption. It is rampant in Russia, where it’s identified with the “oligarchs”–though the biggest spenders of all, Vladimir Putin and his family, are protected by state oppression of the media.
Adding to this mournful atmosphere is the current low-quality crop of world leaders. Mr. Obama would be a disheartening President even during a superboom, with his grim demeanor and empty rhetoric, as well as his obvious hatred of business bravado.
