III: AMERICAN FABIANISM

The permeation of the United States by British Fabian socialism proceeded primarily through the
universities. The main root of Fabian “permeation” was Harvard University. Fabian socialists as well as
Marxian socialists selected Harvard as the fount from which leftist ideology filtered through to other
educational institutions. Later the communists borrowed from the socialists the formula of incubating
revolutions through universities.(1) Among those who pioneered Fabianism in America (shortly after the
formation of the Fabian Society in England in 1883) were James Harvey Robinson (Harvard, 1887),
Oswald Garrison Villard (H’93), W.E.B. DuBois (H’90) and Harry Frederick Ward (H’98).

Professor Taussig and others at Harvard, allowed the Fabians to operate freely with the best of
intentions. Their cloak of “respectability” permitted Fabian socialists to carry on under “harmless”
colors. Fabians at Harvard and other universities were considered not as conspirators but as individuals
with whom one could have amiable disagreements.

With the aid of Taussig and other economists of the American Economic Association, Webb’s essay on
Socialism in England was circulated in 1889 throughout the academic world.(2) This essay was based on
Fabian Essays in Socialism (1889), which formed the basic platform for the growth of extremism in
England.(3) The American essay explained to its American readers that in England “Socialist lectures
have lately been given in several colleges by permission of the authorities, this part of the propaganda
being chiefly performed by the Fabian Society, which has a standing ‘Universities Committee.’ ”

British Fabian leaders Sidney Webb and Edward R. Pease came to the United States in 1888 for a long
visit to train Fabian groups in the art of socialism. Webb solidified his connection with the American
Economic Association whose editorial address was at Harvard University.

Bela Hubbard in Political and Economic Structures states; “By the close of the nineteenth century they
(Fabians –ed.) had made converts in the United States. Under Fabian influence and guidance, the
Intercollegiate Socialist Society was founded in New York City, in 1905.”(4)During this same period the
Rand School of Social Science was formed by Fabian Socialists and became the New York headquarters
of the Intercollegiate Socialist Society.

The pattern of operation in the I.S.S. was the same as that pursued by Fabians in England. During the
first two years (1905-1907) its activity was mainly that of distributing literature and giving lectures in the
universities. By January 1908, the first professional paid organizer went into action. His task was to
consolidate in organizational form the results of the previous propaganda. A chapter of the
Intercollegiate Socialist Society was formed in Harvard. Other chapters quickly followed in Princeton,
Columbia, Barnard, New York University and University of Pennsylvania. All these chapters were
organized in the first four months of 1908 at a cost of only 521 dollars.(5)

By 1914 the Harvard chapter of the I.S.S. had over 60 members. John Spargo, socialist leader, addressed
as many as 250 students at Harvard in a single meeting of the Intercollegiate Socialist Society.(6)
Active in the I.S.S. were Walter Lippmann, Felix Frankfurter, Roger Baldwin, Harry F. Ward and Stuart
Chase. The following I.S.S. supporters among many others became leaders in the communist apparatus:
Ella Reeves Bloor, Louis Budenz, Jay Lovestone, Alexander Tratchenberg, W.E.B. DuBois and Robert W.
Dunn.(7)

In the recent book Walter Lippmann and His Times, Carl A. Binger, the well known psychiatrist and the
leader of mental health movements, states:

The Fabian movement captured our imagination, and Graham Wallas. Wallas, then at the London School
of Economics, was all the more valued as a visiting lecturer at Harvard for having been part of it. Wallas
dedicated his book The Great Society to Lippmann, and since this book was published in 1914, four years
after the discussion course in government that Wallas conducted and in which Walter took part, one can
see what an impression this young student must have made on his teacher. But by that time (1913)
Lippmann had already written his Preface to Politics.

The Webbs—Sidney and Beatrice—also influenced Walter by their careful, tough-minded

By 1916 I.S.S. organizers lectured on socialism to over 30,000 students throughout the country. “They
addressed some 89 economic and other classes and spoke before over a score of entire college
bodies.”(9)

In the Socialist Review (formerly the Intercollegiate Socialist) the official organ of the I.S.S., the following
political position was published for all members to note:

Menaced by foreign miltary forces, the work of social and economic regeneration is now endangered.
The Russian revolution is the heritage of the world. It must not be defeated by foreign militarism. It
must be permitted to develop unhampered. It must live, so that Russia may be truly free and, through
its freedom, blaze the way for industrial democracy throughout the world. (1919)(10)

Walter Lippmann and Felix Frankfurter managed to attach themselves as special assistants to the
Secretary of War in 1917. While there, Lippmann and Frankfurter became closely associated with the
then Assistant Secretary of the Navy, Franklin D. Roosevelt.(11) F.D.R.later rewarded this friendship by
appointing Frankfurter to the Supreme Court and American Fabians capitalized on this connection by
grabbing hundreds of jobs in key Government positions.

Lippmann and Frankfurter, as socialists used their influence to aid left-wing conscientious objectors
during World War I. The “objectors” were extremists who refused to support “any war under the
capitalist system.” In the New York State Joint Legislative Inquiry in 1920 the following Frankfurter-
Lippmann collaboration was disclosed:

Considerable correspondence passed to and from Frederick Keppel, of the War Department, to Roger
Baldwin and Norman Thomas of the Civil Liberties Bureau, indicating the efforts of that organization to
influence the War Department with respect to its treatment of conscientious objectors. A letter from
Baldwin to Manley Hudson contains the following:
“Lippmann and Frankfurter are of course out of that particular job now, (war office) and I have to
depend entirely upon Keppel.”(12)

Roger Baldwin (Harvard 1905) during this same period outlined a Fabian device of capturing power by
stealth and deception.(13) In an advisory letter to a socialist agitator he wrote in part:

Do steer away from making it look like a Socialist enterprise . . . We want also to look patriots in
everything we do. We want to get a good lot of flags, talk a good deal about the Constitution and what
our forefathers wanted to make of this country, and to show that we are really the folks that really
stand for the spirit of our institutions.(14)

Late in World War I Lippmann “became one of a group working on the background material on which
Wilson was to base his Fourteen Points.”(15) Unfortunately, one of these Points was largely responsible
for the dissecting and break-up of Europe into mutually antagonistic political and economic segments.
American Fabians (Lippmann & Co.) and British Fabians (Keynes & Co.) played a considerable role in
promoting this policy, thereby laying the basis for the rise of Adolph Hitler. Lippmann personally
prepared a brief of thirteen of the Fourteen Points in order to sell them to the Prime Minister Lloyd
George. These “came to be accepted as the official American interpretation of the Fourteen Points.”(16)

John Maynard Keynes, in the meantime, sat at Lloyd George’s elbow trying to steer him in a Fabian
direction. Lippmann quit the Versailles Treaty proceedings after vainly trying to convince President
Wilson not to oppose the Bolshevik Revolution.(17) Keynes taking the identical position also walked out
on Lloyd George during this same period.

After World War I the Intercollegiate Socialist Society changed its name to The League for Industrial
Democracy (L.I.D.). The parent Fabian Society in England had always urged that the word “socialist” be
pushed into the background. Socialistic policies were considered more important than the mere name
“socialism” itself. The League for Industrial Democracy openly boasted:

What the Fabian Society and Guild Socialist League have done in England, what Clarte is doing on the
Continent—this, making due allowance for American conditions and American needs, the L.I.D. seeks to
accomplish in the United States.(18)

Among the more prominent activists of the L.I.D. were such leftist luminaries as Stuart Chase, George
Soule, Norman Thomas, Alvin Johnson, Felix Frankfurter, Harry A. Overstreet, Thorstein Veblen and
Scott Nearing. The L.I.D. produced a host of pro-Soviet followers. Such notorious Sovieteers as Corliss
Lamont (Harvard 1924), Frederick Vanderbilt Field (H’27) and Owen Lattimore (H’31), were active in the
L.I.D.

In England a parallel development went on in the parent Fabian Society. Violent advocates of pro-
Bolshevik ideas such as Harold J. Laski (Harvard 1916) and John Strachey reflected a development known
as the New Fabianism.
Leading American Fabians activized several organizations as instruments to put over left-wing ideas. One
of the more important of these is the New School for Social Reserach.(19)Another such group was the
Bureau of Industrial Research.(20)

The New School for Social Research, which operates as an accredited educational institution, has been
sold to the general public as an independent and politically neutral institution. Actually the New School
was cited as: “established by men who belong to the ranks of near-Bolshevik Intelligentsia, some of
them being too radical in their views to remain on the faculty of Columbia University.”(21) When the
above characterization was made by the New York State Legislative Committee (1920), the New School
Fabian socialist nature was not too well defined but its extremism was recognizable even then. The list
of its faculty, lecturers and directors from its origin in 1919 to the present day, reads like a Who’s Who
of the socialist and communist movement. Keynes had also lectured there.(22)

The parent movement connecting the various Fabian “fronts” in America to this day is the League for
Industrial Democracy. An examination of the background of those associated with this Fabian network
indicates that they were the nucleus of the “Brain Trust” of the Washington bureaucracy. They have
been the fountainhead of big government and big spending philosophies.

Alvin Hansen, Seymour E. Harris and J. Kenneth Galbraith (all professors of the Harvard Economics
Department) and others of their ilk have not only served as administrators of huge Federal Bureaus but
have planted a swarm of their followers in government bureaucracies.(23)Hansen and Harris have both
been associated actively with the socialistic League for Industrial Democracy. Seymour Harris is a “big-
wig” in the Americans for Democratic Action (ADA). Galbraith has long been known as an extremist and
has recently graduated as a favorite of the Kremlin. An official Soviet magazine the New Times
(published by TRUD in Moscow in nine languages) features an article by Galbraith advocating greater
spending by the United States and agreeing with Khrushchev that this country should disarm.(24)

Hansen, Harris and Galbraith, besides being Fabian type socialists, are considered the leaders of
American Keynesism. The pattern is the same although the names and labels keep shifting. Fabian
socialism uses Keynesism as a political weapon. The Kremlin followers use the Fabian organizations as a
cover for their operations. Keynesism is used to snare the unwary and bring them by degrees into a
socialistic turn of mind. The communists then work hard to propel such socialistic converts further along
the road to Soviet socialism.

It is a confusing, constantly shifting and horribly intricate process. The left-wing political underworld
uses Fabian socialism with its “respectable covers” as a backdrop and sanctuary. The constant
movement in and out of the whole Fabian melange cannot be understood unless the Fabian process and
Fabian motives are dissected and shown up in their true nature. Without understanding the political
climate and function of the Fabian socialist camp a true evaluation of the communist conspiracy is not
possible. Fabian socialism and communism embrace each other, feed on each other and sometimes
engage in a family fight. The communists inevitably get the better of the bargain.

The Kremlin has found that it needs a socialistic environment in which it can hide and nurture its forces.
Operating in a tangled forest of socialistic organizations the communists find that they can venture forth
to attack society and then run back to shelter whenever the going gets too tough. An evaluation of the
left-wing needs an understanding of Fabianism on the one hand—no matter what its labels—and an
understanding of Communism on the other—also despite its camouflage.

Today Fabians use the teachings of John Maynard Keynes as their catechism of political economy. The
American Fabians have slavishly installed Keynesism as the new faith, both in the Universities and in
Government bureaucracy.(25) To lay bare and dissect these premeditated deceptions is the true task of
the political science of our day.

________________________________________

1 Some universities which were the early objects of Fabian infiltration were Pennsylvania, Chicago and
Wisconsin. Also chosen for concentration were Yale, Columbia and Princeton.

2 Sidney Webb, Barrister at Law, Lecturer on Economics at the city of London College
(England),Socialism in England, Publication of the American Economic Association, vol. IV no. 2, 1889, p.
40. See also Fabianism in the Political Life of Britain, p. 8.

3 Sidney Webb, et al., Fabian Essays in Socialism, Walter Scott, London, 1889.

4 Political and Economic Structures, p. 111

5 Intercollegiate Socialist, (Magazine) Sept., 1908.

6 Ibid., Dec.-Jan., 1913-14, p. 27.

7 Political and Economic Structures, p. 112.

8 Carl Binger, “A Child of Enlightenment” in Walter Lippmann And His Times, edited by Marquis Childs
and James Reston, Harcourt, Brace, N.Y., 1959, p. 34.

9 American Labor Year Book, 1916, Rand School, N.Y., p. 157.

10 Alexander Trachtenberg, “Two Years of the Russian Revolution” in the Intercollegiate Socialist,April-
May, 1919, p.32.

Trachtenberg was a member of the Intercollegiate Socialist Society and a director of the Rand School of
Social Science. (Both the Rand School and the I.I..S. occupy the same headquarters.) Trachtenberg was
later exposed as a top Soviet agent and became a leader of the American Communist Party.

Isaac A. Hourwich was another prominent member of the I.S.S. He was later levealed as a top Soviet
agent and representing Lenin in the United States. (Intercollegiate Socialist, June 1914).

11 Arthur M. Schlesinger, Jr., “Walter Lippmann: The Intellectual v. Politics,” in Walter Lippmann and
His Times, p. 199.
12 Report of the Joint Legislative Committee Investigating Seditious Activities, April 24, 1920, Senate of
the State of New York, p. 1087. The Keppel mentioned above was F.P. Keppel, later President of the
Carnegie Corporation. Under his administration the Carnegie Corporation distributed considerable
financial support to various left-wing enterprises.

13 Roger Baldwin has pursued Fabian socialist methods in the United States for over 55 years. Baldwin
has one of the longest lists of association with Communist Party fronts on record.

14 Report, Joint Legislative Committee, p. 1088.

15 Walter Lippmann and His Times, p. 8.

16 Ibid., p. 199.

17 Ibid., p. 9.

18 News Bulletin (Official organ League for Industrial Democracy), vol. I, No. 2 Jan, 1923, p. 2.

19 Report, Joint Legislative Committee Investigating Seditious Activities, State of New York, April 24,
1920, p. 1119.

20 Ibid., pp. 1120-21.

21 Report, Joint Legislative Committee, p. 1121.

22 British Fabians such as Sir William Beveridge, J.M. Keynes, Graham Wallas, Julian Huxley, Bertrand
Russell, J.B.S. Haldane and Harold Laski lectured at the New School for Social Research. The American
counterparts of the British Fabians included such personages as: John Dewey, Clarence Darrow , Roger
Baldwin, Felix Frankfurter, Franz Boas, Wesley C. Mitchell, Harry A. Overstreet, Max Ascoli and Walter
Lippmann. Soviet partisans such as: Moissaye Olgin (later exposed as a top Soviet agent) also
participated in the New School activities.

23 John T. Flynn, The Road Ahead (America’s Creeping Revolution), Devin-Adair, N.Y. 1949, p. 68. An
example of this process has been clearly described by John T. Flynn when he wrote:

A group of men headed by Dr. Alvin Hansen appeared in Washington with an American edition of Mr.
John Maynard Keynes’ theories of spending and national debt. All the government planning involved
government spending. And that involved heavy taxation and debt. Taxes and debt were supposed to be
an evil and were certainly unpopular. But now came the new theory that governments could borrow
almost indefinitely, that government borrowing was a good thing, that government debt was not a
burden, did not have to be paid and was, literally, an unmixed blessing. A whole batch of Harvard and
other professors vouched for the soundness of this thoroughly cockeyed theory. Planning, now
equipped with the new engine of government borrowing, took on a new and vital form. And the whole
brood of Socialists and Technocrats and Fabians swarmed into Washington.
24 J.K. Galbraith, “Benefits of General Disarmament,” New Times, a weekly journal of world affairs
published in Russian, English, French, German, Spanish, Polish, Czech, Roumanian and Swedish by TRUD,
Moscow, U.S.S.R., No. 51, December 1959, pp. 14-15-16.

Galbraith’s article publicizes the fact that he is writing as “Professor of Economics, Harvard University,
U.S.A.” Thus the prestige of Harvard is invoked once again to aid communism.

25 The Road Ahead, passim.

IV: JOHN MAYNARD KEYNES

The Keynesian theory of economics has swept the academic world to an extent unprecedented in
modern times. The focal point of the Keynesian doctrine in the United States has been Harvard
University. From Harvard Keynesian influence spread to Yale, Princeton, University of Chicago,
University of Wisconsin, Massachusetts Institute of Technology and eventually into almost every College
and University in the United States.

From academic circles the Keynesian dogma percolated into government departments on all levels. Not
only those bureaus having to do with economic and statistical matters were affected but policy making
bodies such as the State Department, the Presidential office, the Treasury, the Department of
Agriculture, and the Department of Labor were dominated by Keynesian thinking.

Huge tax-free Foundations, such as the Ford, Carnegie and Guggenheim Foundations, backed by billions
of dollars, became the nesting places of Keynesism.

Elements in the banking world such as the Lamonts (and the late Benjamin Strong) became avid
supporters of the Keynesian thesis. Certain industrialists, particularly those depending on government
contracts and handouts, became enamored of this new philosophy.

The impression has been created that the Keynesian theory possessed such a force of scientific validity
that the greatest minds in the country succumbed to its logic. However, extensive research through the
Keynesian maze reveal many elements in this theory that contradict its claim to scientific objectivity.

A check of the outstanding representatives of Keynesism in America disclosed the fact that they are
largely the same people who had been leaders in the socialist movement for many years past. Further
examination shows that by adopting the Keynesian theory these socialists have no intention of
abandoning their socialist aims. It soon became obvious that these left-wingers see in Keynesism a
means of creeping into Socialism. The Keynesian camp is studded with the names of such time-hardened
Fabian Socialists as Stuart Chase, George Soule, Norman Thomas and Harry W. Laidler.

In Britain the Keynesian theories were the officially accepted creed of the Fabian Socialists for many
years. They became a standby of Fabianism throughout the world as early as 1919.(1)
The consistent support given to Keynesism by Fabians and other left-wing groups throughout the years,
requires an exhaustive examination of the background and associations of John Maynard Keynes as an
individual.

There is one propaganda claim that those subscribing to Keynesism possess in common. They all insist
that Keynes was a “capitalist economist,” who after following the classical school of laissez-faire began
to question the old economic concepts. They also endowed him with a pure scientific detachment which
inevitably led him to the conclusion that the system of private enterprise was doomed as such. These
same exponents also insist that Keynes wanted to save as much of the capitalist system as was possible.

To evaluate the true motives and teachings of Keynes it has been necessary to scrutinize his whole life. It
soon became obvious that the left-wing characterization of Keynes as a “capitalist economist,” who
finally saw the light of day, was a gross distortion, made out of the whole cloth, for reasons that will
become apparent as this study proceeds.

When John Maynard Keynes was seven years old, his father, John Neville Keynes, a don at the University
of Cambridge, wrote a book entitled The Scope and Method of Political Economy.(2) In this work the
elder Keynes attacked the principle of laissez-faire and dealt with socialist doctrines in a friendly light. In
the preface of this book he acknowledged the assistance of Professor Alfred Marshall, a Fabian socialist,
who many years later was responsible for influencing John Maynard Keynes to take up economics as his
life’s work.

Alfred Marshall’s economic theories were a main prop for the socialist teachings of the Fabian Society
both in England and in the United States.(3) Marshall privately admitted his belief in the Socialist ideal
but publicly vended his services by pretending to be an economist of the classic private enterprise
school.(4)

John Maynard Keynes as the son of a Cambridge professor was raised in the shadow of the Cambridge
campus. The ideas of his father and such academicians as Alfred Marshall made a profound impression
on his young mind. He quite naturally followed in his father’s footsteps.

As an undergraduate at Cambridge, John Maynard Keynes banded together with a group of radicals who
were destined to become the outstanding Socialist leaders of Great Britain. At the age of 19 his
associates included such Fabian Socialists as Bertrand Russell, Leonard Woolf and Ruppert Brooke. At
the age of 20 (1903) Keynes became a member of a Fabian group at Cambridge which was headed by
G.L. Dickinson, a prominent Fabian Socialist. Dickinson taught history and political subjects at the
University. As an undergraduate, Keynes, imitating his father, expressed strong opposition to the
principle of private enterprise (Laissez-Faire).(5)

R.F. Harrod, Keynes’ official biographer, describes his hero as having “within him the seeds of
rebellion.”(6) Keynes was a leader of radical students demanding separation of Cambridge University
from religious connections.(7) In his maiden speech as freshman, Keynes boldly declared “that the
British system of government by party is becoming a hindrance to useful legislation.” At this time (1902)
Keynes joined the Liberal Club. The Liberal Party had been “permeated” by the Fabian Society and at
that time was a chief vehicle for Fabian Socialist manipulations.(8)

In 1905, Alfred Marshall wrote to John Maynard Keynes’ father: “Your son is doing excellent work in
economics. I have told him that I should be greatly delighted if he should decide on the career of a
professional economist.”(9) Professor A.C. Pigou privately coached Keynes on economics. Pigou,
although posturing as a classic economist, has also been identified as a Fabian Socialist.(10)

During his University days Keynes had already developed a reputation for Machiavellian methods. His
friends dubbed him “pozzo.” This nickname stuck to him for the rest of his days.(11) Carlo Andrea Pozzo
di Borgo (1764-1842) was a Corsican who became notorious for diplomatic intrigue and was hired by
various European nations for such purposes.

From 1906 to 1908 Keynes worked for the Civil Service as a minor official in the British Government’s
India office. There, at the age of 24, Keynes expressed the Fabian concept that Civil Service
administrators are the rulers of the future. Elected and appointed heads, in his opinion, “showed
manifest signs of senile decay” and represented “government by dotardry.”(12) This was in line with the
general attitude of the Fabian Society, which favored government run by the Civil Service and not a
government responsive to the electorate.

In 1908 Keynes became a Cambridge lecturer, being supported in part by an annual stipend from Alfred
Marshall, who “was largely in sympathy with the aims of the Fabians.”(13)

Through Alfred Marshall’s backing in 1911 Keynes was made editor of the Economic Journal. This
publication was the official organ of the Royal Economic Society. As protege of Alfred Marshall and
Pigou the young man became the key outlet of Fabian Socialist articles on economic and political
matters. Ironically, this magazine bore the imprint “Patron—His Majesty, the King.”

By 1913 Keynes was installed as Secretary of the Royal Economic Society itself. There he joined hands
with the Fabian chief, Sidney Webb, along with Pigou and Marshall to exploit the prestige and
respectability of the Royal Economic Society for the benefit of socialism.

It was during this period (1913) that Keynes adopted the concept of eliminating gold as a standard of the
monetary system of the nations of the world.(14) His notion of a managed currency (that he sold F.D.
Roosevelt on twenty years later) was an old socialist catch-all, espoused by the Fabians since the turn of
the century.(15) It is a fundamental concept of State-Socialism.

With the entrance of Great Britain into World War I, Keynes, like many other young radical opportunists,
began to cast around for an appointment to Government service which might bring exemption from
military duty. Early in 1915, a few months after Britain’s entrance into the war, Keynes secured an
appointment with the British Treasury.

Many of Keynes’ left-wing friends became conscientious objectors. When his friends appeared before
British tribunals claiming this status, Keynes interceded on their behalf. He boasted of throwing dinner
parties for these left-wing objectors in order to “restore shattered nerves.”
Keynes himself had gone through the formality of filing as a conscientious objector. He did this,
however, in the rather roundabout way of first postponing action through various bureaucratic
subterfuges. Toward the end of the war the conscription office insisted on a decision of his status. At
that point he was forced to file as a conscientious objector, just as his friends in the Bloomsbury Socialist
circles did. Keynes’ mother was disturbed over the attitude of her son and his leftist friends and wrote to
him disapproving of such an unpatriotic stand.(16)

Keynes did not keep his Socialist convictions to himself in those days. His opposition to the private
enterprise system was well known to London society. Clarence W. Barron, then publisher of the Wall
Street Journal, while in London in 1918, made the following observation: “Saw Professor Keynes of the
British Treasury . . . Lady Cunard says Keynes is a kind of Socialist and my judgment is that he is a
Socialist of the type that does not believe in the family.”(17)

The end of the war found Keynes at the Peace Treaty negotiations in Paris. He was a key aid to Prime
Minister David Lloyd George.

The Socialists in Germany and Austria had taken power in a revolutionary coup against the monarchies
of each respective country. Immediately the Socialists of the victorious nations set up a hue and cry to
ease the claim of indemnity assessed against the vanquished Germans and Austrians. The underlying
motive of the British Fabians was to make things easier for their Socialist comrades who had grabbed
political power in the defeated countries.

Keynes argued vigorously for the Socialist position. He presented plans which watered down the
indemnity claims. When his pleas were turned down he resigned his position. In the space of two
months Keynes wrote his criticisms of the Peace negotiations in a book entitledThe Economic
Consequences of the Peace (Aug.-Sept. 1919).(18) This became a basic Socialist text and is used as such
to this very day.(19)

The Fabian Society made private arrangements with Keynes to publish a special edition of his book for
exclusive distribution among radicals throughout the British Empire.(20)

During this same period Keynes’ old Fabian Socialist teacher at Cambridge, G.L. Dickinson, supported
Keynes with a radical “front” called the Union of Democratic Control“which opposed retaliatory
measures against Germany and reparations.”(21)

In the United States, Fabian Socialists Felix Frankfurter and Walter Lippmann arranged to have The
Economic Consequences of the Peace published in a special American edition. Frankfurter brought the
manuscript over from England after consultation with Keynes. Graham Wallas, one of the pioneers of
the Fabian Socialist movement, consulted with Frankfurter and pronounced the Keynes manuscript a
“great work.”(22) Both Wallas and Frankfurter had been instructors at Harvard. Walter Lippmann, who
had joined the Fabian Society in 1909, had been one of Wallas’ students at Harvard.(23)

The Economic Consequences became a main prop in the arsenal of Socialist propaganda in the United
States. The League for Industrial Democracy and the Rand School for Social Science both urged the
Keynes book on their extremist following along with Bolshevik literature such as Lenin’s State and
Revolution and Trotsky’s In Defense of Terrorism. As has been noted before, the L.I.D. and the Rand
School were American Fabian entities.

As a corollary to the Bolshevik phase of Socialist movement Keynes went through an interesting
development. On February 22nd, 1918, Keynes wrote to his mother:

Oh! you’ll be amused to hear that I was offered a Russian Decoration yesterday, a belated one just
arrived from the Provisional Government. Being a Bolshevik, however, I thought it more proper to
refuse.(24)

It was a common condition during that period for left-wingers to seize on the Bolshevik example as a
harbinger of the “new order.” Keynes emotionally fell into the same pattern. At that time he was a high
official of the British Treasury and advisor to David Lloyd George on economic policies. Curiously, those
of the Provisional Russian Government (Kerensky) were themselves Socialists, but of the non-Bolshevik
variety. Like many other socialistic-minded young men, Keynes considered the Kerensky Socialists
“reactionaries” and the Bolsheviks “progressives.”

In The Economic Consequences Keynes vigorously opposed the policy of intervention by the allies
against the Bolshevik forces and criticized the economic blockade against Soviet Russia.(25)

In 1922 the reputation Keynes acquired through The Economic Consequences was responsible for his
employment by the Manchester Guardian to edit twelve supplements under the title of “Reconstruction
in Europe.” Keynes recruited left-wing and liberal opinion from all over the world for this series.
Contributors, who were primarily from the Socialist-Bolshevik camps, included Maxim Gorky from Soviet
Russia, Henri Barbusse from France, Walter Lippmann from the United States, Dr. Benes from
Czechoslovakia, and Harold Laski and G.D.H. Cole from England.

In 1924 Keynes gave a lecture at Oxford University which eventually , was published as a small book
under the title The End of Laissez-Faire. In this work Keynes eulogized his old master, Alfred Marshall,
for the “elucidation of the leading cases in which private interest and social interest are not
harmonious.”(26) This was an open admission by Marshall and Keynes that they considered private
enterprise as frequently an anti-social force.

Keynes proceeded to expound, in clear-cut terms, that private enterprise, as a general rule, was
historically finished and that socialized forms were a natural and progressive development of society.

Keynes’ attitude toward the free enterprise system was in all essentials the same as that of the Fabian
Socialists. The Fabian Socialist project of allowing private enterprise to operate while gradually chipping
away at its foundation until the government takes over all functions was identical with the Keynesian
concept. In End of Laissez-Faire Keynes advances the following preliminary softening-up stage as a basis
for a future socialism:

I believe that in many cases the ideal size for the unit of control and organization lies somewhere
between the individual and the modern State. I suggest, therefore, that progress lies in the growth and
the recognition of semi-autonomous bodies within the State—bodies whose criterion of action within
their own field is solely the public good as they understand it, and from whose deliberations motives of
private advantage are excluded, though some place it may still be necessary to leave, until the ambit of
men’s altruism grows wider, to the separate advantage of particular groups, classes, or faculties—bodies
which in the ordinary course of affairs are mainly autonomous within their prescribed limitations, but
are subject in the last resort to the sovereignty of the democracy expressed through Parliament.(27)

Keynes along with his Fabian cohorts considered that the large corporations had “socialized” themselves
to the point where the profit motive became secondary. Keynes boldly declares:

In fact, we already have in these cases many of the faults as well as the advantages of State Socialism.
Nevertheless we see here, I think, a natural line of evolution. The battle of Socialism against unlimited
private profit is being won in detail hour by hour.(28)

Keynes’ disagreement with what he calls “doctrinaire State Socialism” is not one of principle but one of
tactics. What he means by doctrinaire Socialism is the Socialism of Marxist groups.(29) These
expressions have been used to try to give Keynes an anti-socialist coloring, in order to sell Keynes to
non-leftists.

Keynes shows a strong prejudice against the risk capital that drives civilization into ever greater
technical progress. He opposes economic measures which result in new consumer tastes among the
public. He also sneers at private enterprise as “often a lottery,” from which “great inequalities of wealth
come about.”(30)

In this same work Keynes showed an early bias (1924) against savings and investments as economic
virtues. From virtues he transformed them into evils:

My second example relates to Savings and Investment. I believe that some co-ordinated act of
intelligent judgment is required as to the scale on which it is desirable that the community as a whole
should save, the scale on which these savings should go abroad in the form of foreign investments, and
whether the present organization of the investment market distributes savings along the most
nationally productive channels. I do not think that these matters should be left entirely to the chances of
private judgment and private profits, as they are at present.(31)

Fabian Socialists have long considered those who saved and invested as a stumbling block against the
march of Socialism.

Keynes’ concept of controlling society extends beyond political and economic matters. He even
advocates social control of the number of children per family:

The time has already come when each country needs a considered national policy about what size of
Population, whether larger or smaller than at present or the same, is most expedient. And having settled
this policy, we must take steps to carry it into operation. The time may arrive a little later when the
community as a whole must pay attention to the innate quality as well as to the mere numbers of its
future members.(32)
As mentioned previously (by Clarence W. Barron in 1918), Keynes “is a Socialist that does not believe in
the family.” Naturally, in order to control the birth rate the State must break up the family as an
independent and free unit. Private enterprise in running the family, in other words, must also be subject
to socialized control.

Keynes’ close friend and official biographer, R. F. Harrod, wrote: “He was not a great friend of the profit
motive; he found something unsatisfactory in the quest for gain as such, and came to hope that an
economic system might be evolved in which it was curtailed.”(33)

In views of Keynes’ opposition to “quest for gain as such,” it is interesting to note the extent to which he
had personally participated in speculations and trading on the international money market. Starting with
4,000 pounds in 1919, Keynes built up a personal fortune of 506,000 pounds (nearly 2½ million dollars)
up to the depression year of 1937.

In 1921 Keynes organized an investment company made up of his cronies who had been with him in the
British Treasury. The company was even called A.D. Company after the A Division of the British Treasury
in which Keynes and his partners had worked.(34) With access to inside information from the British
Treasury Department it was relatively certain that Keynes and his cohorts would be able to amass a
large fortune.(35) It is easy to see why Keynes considered Ivar Kreuger, the world’s greatest swindler, as
“the greatest financial intelligence of his time.” (N.Y. Herald Tribune, July 18, 1960, p. 15.)

Keynes’ continuous attacks against those who engaged in the honest pursuit of profits via private
enterprise are difficult to understand in view of his own most questionable financial dealings. However,
a check of several hundred of the more prominent Fabian Socialists in England, and their counterparts in
the United States, shows that with hardly an exception they manage to live in a high style either through
speculation, profit-making or draw high salaries in government, tax-exempt foundations, universities or
unsuspecting corporations. The publication of material on a lush royalty basis provides in itself a high
standard of capitalistic luxury for hundreds of left-wingers. Prominent agitators against “Capitalism,”
according to data in Who’s Who in America, have profited as individuals in all of the above categories.
Obviously, Keynes was not alone in maintaining such a double standard.

In 1925 Keynes published three articles which were issued by the Hogarth Press (Fabian Socialist) under
the title of A Short View of Russia.(36) These observations were gathered as a result of his visit to the
Soviet union during that year. Somewhat appalled by the mass terror and the extermination of millions
of people, he nevertheless refused to drop his belief in the Socialist goal. In speaking of the “mood of
oppression” he stated:

In part, no doubt, it is the fruit of Red Revolution—there is much in Russia to make one pray that one’s
own country may achieve its goal not in that way. In part, perhaps, it is the fruit of some beastliness in
the Russian nature—or in the Russian and Jewish natures when, as now, they are allied together.(37)

Keynes, it can be noted, tended to explain away mass murder in large part on the “Russian and Jewish
nature” rather than a logical development of socialism itself. The goal of socialism is clearly Keynes’
objective. It is interesting to note the undercurrent of anti-semitism in Keynes’ reference to “some
beastliness” in “Jewish nature.” In the same article Keynes also observed that he had doubts “Russian
Communism” would “make Jews less avaricious.”(38)

By 1929 Keynes’ teachings had became hardened into a full Fabian Socialist doctrine. He had supplanted
his old mentor, Alfred Marshall, as the official economist of Fabian Socialism. Since the British Labour
Party was an instrument of Fabian socialism the Keynesian theories formed the backbone of the Labour
Party’s economic platform.

When Ramsay MacDonald (a Fabian Socialist of longstanding) became Labour Prime Minister in 1929,
Fabians swarmed into control of key government positions. Philip Snowden became Chancellor of the
Exchequer and appointed Keynes to the key Committee of Enquiry into Finance and Industry. This was
the body which was to draw up plans for steering British economy from private ownership into
Socialism. In January 1930 Prime Minister MacDonald appointed Keynes to the Economic Advisory
Council.(39) Only the dislocation of economic life due to the world depression (1930) prevented Keynes
and his cohorts from instituting Socialist economic measures for all of Britain. Mass discontent drove the
Laborites from power.

In 1923 Keynes had acquired financial control of the British publication The Nation, This magazine had
been the leading voice of Fabian ideas within the Liberal Party. Keynes remained Chairman of the Board
of The Nation for seven years.(40) Under his direction this publication began to assume an even more
leftist character. Extreme radicals including even Bolsheviks from Soviet Russia, wrote feature articles.

In 1931 Keynes negotiated a merger of The Nation with the New Statesman.

The New Statesman had been founded by Bernard Shaw and Beatrice and Sidney Webb in 1913 to
expound Fabian Socialist views openly. It had been a conspicious outlet for Socialist and Communist
propaganda.

The new amalgamation was called the New Statesman and Nation. Keynes became a member of the
Board of the new entity “and he was delighted to welcome Mr. Kingsley Martin as its editor.”(41)
Kingsley Martin was a well-known Fabian Socialist leader.

During this period (1930) Keynes wrote a two-volume work entitled “A Treatise on Money,” which he
had considered his major life-time work and as “the best picture of his total contribution to
economics.”(42) This attempt proved to be a failure and even his left-wing friends did not see in this
work any good propaganda possibilities. Technically it was promptly dissected by prominent economists
and proved to be an inferior contribution.

Keynes during this period developed a keen interest in the United States. As previously noted, he had
long been in touch with American Fabians such as Walter Lippmann and Felix Frankfurter and kept up a
regular correspondence with them. During the summer of 1931 he made a trip to America. Through
prominent financiers Keynes met some of the leading men of business in New York City. He also had
interviews with the heads of Federal Reserve System and with President Herbert Hoover. On returning
to England, Keynes submitted a lengthy report on American conditions to Ramsay MacDonald, who was
then Prime Minister of a coalition government. MacDonald circulated this report as a Cabinet Paper.(43)

American Socialist elements began to see in the economic crisis an opportunity to put across some of
their planning devices. The fact that the Republicans were in power under Herbert Hoover was no
deterrent to the left-wing. Under the pretense of “economic emergency,” pressure was being brought to
bear by leftists, in respectable guise, for building of strong executive powers and creation of special
agencies which could act as nuclei for future Socialist operations.

With the defeat of Hoover and the election of Franklin D. Roosevelt Keynes’ American left-wing friends
climbed into positions of great power. The campaign began to build up Keynes in America as the modern
economic messiah. During June, 1933, Walter Lippmann and Keynes, by arrangement with the British
Broadcasting Company, participated in a radio broadcast of their telephone conversation on political-
economic matters to listeners on the two continents. “This was stated to be the first broadcast of a
conversation between two individuals across the Atlantic.”

When Roosevelt went off the gold standard Keynes wrote an article in the London Daily Mail (June
1933). The headline declared, “President Roosevelt is Magnificently Right.” Keynes was exultant in his
belief that the Roosevelt policies “lead to the managed currency of the future.”(44)

For years it had been a point of Socialist strategy that complete government control of currency and all
money and currency values is a chief lever in moving society toward redistribution of wealth and
complete Socialism.

The New York Times (Sunday, December 31st, 1933) featured an article entitled “From Keynes to
Roosevelt.”(45) This article, which was embellished with a portrait of Keynes, covered a complete half
page. Dubbed “An open letter to the President,” it was a political tip-off to the left-wingers, in and out of
government, as to the line of action to follow.

Walter Lippman in writing to Keynes on April 17th, 1934, stated that: “. . . I do not know whether you
realize how great an effect that letter (viz. that in the New York Times) had, but I am told that it was
chiefly responsible for the policy which the Treasury is now quietly but effectively pursuing of
purchasing long-term government bonds with a view to making a strong bond market and to reducing
the long-term rate of interest.”(46)

Keynes made another trip to the United States in June, 1934. His old friend Walter Case, head of the
investment trust firm of Case Pomeroy & Company, New York City gave a huge banquet for Keynes so he
could meet many influential people. Felix Frankfurter, “gave him a batch of letters of introduction to
personages in Washington who had important influence in the New Deal, members of the ‘Brains Trust,’
as it was then called. He had an interview with President Roosevelt.”

F.D. Roosevelt, in a personal letter to Felix Frankfurter, June 11, 1934 wrote, “I had a grand talk with K
and liked him immensely . . .”(47)
Keynesian measures in the United States proceeded at full speed. Keynes’ influence was tremendous. A
swarm of those who had been associated with the Socialist Party and its various divisions (League for
Industrial Democracy, Rand School for Social Science, etc.) and theirsympathizers entered various
government agencies by the thousands. Keynesism was a respectable cover for emergency measures
that were really designed for socialist purposes, as was realized by Frankfurter, Lippmann and their
associates who could count on the help of Fabian minded persons like the President’s wife and Labor
Secretary Frances Perkins.

Keynes’ official biographer gave a clear thumb nail sketch of the New Deal process when he wrote:

Keynes soon had followers in America who meant business, and by the time that the slump of 1937-38
came, some of these were already in a position where they could exert influence on presidential policy.
Even in 1934 his views may have affected the course of events in the United States, not through the
President, but through the clever back-room boys who had their ears to the ground.(48)

Keynes consistently busied himself in undermining private enterprise. In the Yale Review(1933) Keynes
wrote:

The decadent international but individualistic capitalism, in the hands of which we found ourselves after
the war, is not a success. It is not intelligent, it is not beautiful, it is not just, it is not virtuous—and it
does not deliver the goods. In short, we dislike it and are beginning to despise it.(49)

However, in spite of prejudice against “international capitalists,” Keynes during this same period
speculated in United States securities. He had received inside information on those securities which
were depressed far below their true long range value. Keynes’ official biographer refers to these
speculations:

He paid special attention to public utilities, which, in his view, were suffering from vague fears induced
by the New Deal, taking trouble to enlarge his knowledge of particular bonds and stocks. And then he
went deeply in, following his maxim now of taking long views as an investor. His American public utility
holdings made the most important contributions to the great increase of his fortune in the ’thirties.(50)

This curious dualism in Keynes merely followed the pattern of other wealthy revolutionaries like Bernard
Shaw, Joseph Fels, (Fels Naphtha) and Karl Marx’s alter ego Friedrich Engels.

Bernard Shaw in his Fabian socialist book the Intelligent Woman’s Guide to Socialism and Capitalism
(1928) wrote:

At last their duties (the capitalist –ed.)have to be taken out of their hands and discharged by Parliament,
by the Civil Service, by the War Office and the Admiralty, by city corporations, by Poor Law Guardians,
by County and Parish and District Councils, by salaried servants and Boards of paid directors, by societies
and institutions of all kinds depending on taxation or on public subscription.(51)

Six years later Keynes echoed the same Fabian concept when he wrote:
Thus, for one reason or another, Time and the Joint Stock Company and the Civil Service have silently
brought the salaried class into power. Not yet a Proletariat. But a Salariat, assuredly. And it makes a
great difference.(52)

The concept of Salariat as the new ruling elite of socialism, instead of the old Marxist concept of working
class or proletariat, is the distinguishing feature of the Fabian Socialist thinking. The word Salariat is
obviously a semantic construction based on the Marxist termproletariat. Actually the principle of the
Salariat as exemplified in the Soviet bureaucracy is looked upon by Fabian theoreticians as a living proof
of their thesis.

When the Fabian leader George Lansbury visited the Soviet Union in the early twenties he wrote:

When I suggested he (Lenin–ed.) should ask Sidney and Beatrice Webb to go out and teach his friends
how or organize administration, he smiled and said he did not mind me suggesting that the Bolshevik
scheme of things was a glorified kind of Fabianism.(53)

As Bernard Shaw and Keynes outlined above, the Salariat is the administrative vehicle designed to
operate the Socialist society. The problem of administration even in the early days of Bolshevism already
involved the Salariat as the key to the Soviet bureaucracy.

________________________________________

1 John Maynard Keynes, Economic Consequences of Peace, Harcourt, Brace, N.Y. 1920.

2 John Neville Keynes, Scope and Method of Political Economy, Fourth edition, Kelley & Milman, N.Y.
(first published 1890).

Especially interesting is the fact that the elder Keynes vigorously attacked the principle of private
enterprise (Laissez-Faire). See pp. 67-74.

Thirty-six years later his son, John Maynard Keynes, published a book under the title The End of Laissez-
Faire (1926).

3 Fabianism in the Political Life of Britain, McCarran, p. 20.

4 History of Economic Analysis, J.A. Schumpeter, pp. 765, 833, 888.

5 The Life of John Maynard Keynes, R.F. Harrod, p. 192.

6 Ibid., p. 88

7 Ibid., p. 93

8 Ibid., pp. 60-61.

9 Ibid., p. 107.
10 Fabianism in the Political Life of Britain, p. 61.

11 Life of John Maynard Keynes, p. 180. A good analysis of the career of Carlo Andrea Pozzo di Borgo
can be found in the 12th Edition of the Encyclopedia Britannica.

12 Ibid., p. 123.

13 History of Economic Analysis, J.A. Schumpeter, p. 833n.

14 Life of John Maynard Keynes, p. 164.

15 Some references on this topic are:

Fabian Essays in Socialism, 1889 passim.

A Guide Through World Chaos, G.D.H. Cole, p. 220. (Mr. Cole is a prominent Fabian leader.)

Fabianism in the Political Life of Britain.

Sister McCarran brings out the fact that the Fabians believed “The departure from the gold standard had
rendered it easier to attack the rentier class by stabilizing the pound at a level below its old parity.”

Also some Fabians believed that the pound “should be allowed to drop until the rentier class should be
despoiled.” (1913) p. 545.

16 Life of John Maynard Keynes, pp. 213-216.

17 They Told Barron, The notes of Clarence W. Barron, Harpers, N.Y., 1930, pp. 188-189.

18 Life of John Maynard Keynes, p. 254.

19 John Maynard Keynes, The Economic Consequences of the Peace, Harcourt, Brace, N.Y., 1920, p.
294.

20 Fabian News, London, March 1920, p. 17.

21 “G.L. Dickinson,” Columbia Encyclopedia, 2nd ed.

22 Life of John Maynard Keynes, p. 290.

23 Fabian News, Oct. 1909, p. 78.

24 Life of John Maynard Keynes, p. 224.

25 Economic Consequences, p. 294. As noted previously, Walter Lippmann quit the United States staff
at the Peace Conference over the identical question during the same period.

26 John Maynard Keynes, The End of Laissez-Faire, Hogarth Press, London 1926, p. 27. (A Fabian
publishing house.)
27 Ibid., p. 41.

28 Ibid., p. 44.

29 Ibid., p. 45.

30 Ibid., p. 47.

31 Ibid., pp. 48-49.

32 Ibid., p. 49.

(Keynes had no children.)

33 Life of John Maynard Keynes, p. 333.

34 Ibid., p. 299.

35 Ibid., p. 300.

Here R.F. Harrod, Keynes’ chief disciple, writes:

It is clear that in the early rapid build-up of his private fortune he cannot have relied upon long-term
considerations or even upon business-cycle movements; in this case it was quicker changes that he had
to take into account; he traded very actively, moving in and out continually.

In the management of his own capital and in these small companies, the aim in early days was to get a
quick enlargement of capital, and the method one of extreme boldness, decisions being taken on an
economic appraisal of the general situation.

Keynes knew that his own father would disapprove of his speculative practices. In a letter to his mother
on September 3, 1919 Keynes wrote: “My diversion, to avoid the possibility of tedium in a country life, is
speculation in the foreign exchanges, which will shock father but out of which I hope to do very well.”
(p. 288)

Since the British Treasury had the inside track on future monetary fluctuations of a far flung Empire it
was relatively easy for the “AD” gang to make profits in this field.

Keynes even wrote an involved theory, full of economic double-talk, to show that his speculations did no
harm to the consumer or to society; whereas speculations of others could do great harm. (p. 303)

36 John Maynard Keynes, A Short View of Russia, Hogarth Press, London, 1925.

37 Ibid., p. 27.

38 Ibid., p. 15.

39 Life of John Maynard Keynes, p. 397.

41 Ibid., p. 397

42 Ibid., p. 403.

43 Ibid., p. 437.

44 Ibid., p. 445.

45 John Maynard Keynes, “From Keynes to Roosevelt.” New York Times, Sunday, December 31, 1933, p.
2xx.

46 Life of John Maynard Keynes, p. 450.

47 Ibid., p. 448.

Frankfurter was not the only Harvard Professor in Keynes acquaintance. As early as 1927 Keynes was in
close contact with other Harvard professors through the agency of the “Harvard Economic Service.” p.
394.

48 Ibid., p. 450.

49 John Maynard Keynes, “National Self-Sufficiency.” Yale Review, (Summer, 1933) p. 760, quoted
inScience & Society, Winter 1947, vol. XI, no. 1, p. 63. (Science & Society is cited as a communist
publication by government bodies.)

50 Life of John Maynard Keynes, p. 448.

51 Intelligent Woman’s Guide, p. 32.

52 John Maynard Keynes, “Mr. Keynes Replies to Mr. Shaw,” Stalin-Wells Talk, New Statesman and
Nation, 1934, p. 35. (Printed as a separate volume.)

53 My Life, George Lansbury, p. 243.

G.D.H. Cole, Guide to World Chaos, p. 489 ff. Cole deals extensively with the salariat concept.