We’re in the position Lawrence Dennis found himself in during the Great Depression of the Thirties. Dennis possessed a unique understanding of politics & economics. He diagnosed the economic problems of the Great Depression and announced that the ‘old rules’ wouldn’t apply any more.
The analysis Lawrence Dennis made showed more depth than either Murray Rothbard or Milton Friedman. Accordingly, he was more radical.
Lawrence Dennis saw that the Great Depression was due to overproduction or underconsumption. To combat this, there had been a credit expansion which began with World War I and continued into the 1920s. However, installment purchases and high interest rates couldn’t be absorbed forever. The collapse of the credit expansion was inevitable.
When the ‘inflation bubble’–Dennis’s term–exploded, it covered more people than any previous depression in US history.
Dennis then suggested there had to be a planned economy to prevent this kind of bubble manufacturing from re-occurring. Consumers could not and would not pay high interest rates forever. Which is why the previous economic expansion had to be halted by the FED. This goes over the head of Rothbard.
Going against the economic orthodoxy of his time, Dennis said increased savings would not necessarily lead to increased investment in a stagnant economy with high unemployment. This is akin to our situation today.
Though he didn’t use the term, Dennis was a populist. Populism was the unique American tradition which offered resistance to the excesses of capitalism and the evils of communism. Plus, populism was for a nationalist and not an internationalist foreign policy. And they mounted the opposition to the New World Order schemes of the elite.
Populism and the thinking of Lawrence Dennis may be thought of as a ‘middle way’ between those of socialism and unrestrained capitalism. Indeed, herein lie the origins of the Third Position, at least on the American scene.
Dennis asked disturbing questions about the nature of capitalism in particular. He questioned whether the current system of liberalism plus democracy could handle depression and adequately deal with problems of underconsumption and unemployment.
He charged that current system could get rid of excess production either by adopting socialism or through war. One could say that partisans of the Ayn Rand ilk actually prepare the groundwork for the hated socialism.
With the loss of the frontier and with the system of debt, Dennis believed planning became a necessity. The form of planning Dennis offered as an alternative to socialism was fascism.
Dennis also spent a great deal of time arguing against the debt-system and usury. In so doing, he presents the Alternative to both Obama AND the Tea Party!