Forum Post: Why not have people do something productive like build roads and schools rather than dig holes in the ground by j m keynes
Posted 2 years ago on Sept. 22, 2012, 6:02 a.m. EST by flip
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here is an explanation of keynes' money in bottles quote - a refutation of the gold standard (followed by the quotes themselves) - "Its particularly interesting to pull out the quote from Hume because he is not discussing the decision of a Central Bank to print more money but an increase in actual gold and silver.
Keynes is agreeing with this point and saying yes, if people were to discover more gold that would indeed boost employment through the same means that Hume describes.
However, the way one discovers gold is by digging holes in the ground. Which, in Keynes words, have no purpose other than the accumulation of gold which people intend to use a backing for money.
Why not then just bury money in the ground and let people dig that up?
This would have the same effect as the discovery of new gold deposits and would alleviate unemployment though the same means.
But, wait then he says. What in the world is the point of burying money in the ground just to dig it back up again?
Why not have people do something productive like build roads and schools rather than dig holes in the ground. In exchange you can give them money. It will work just like gold mining will but instead of having a hole in the ground to show for it, you have a road or a school."............. here is the quote from keynes - "If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing............For example, unemployment relief financed by loans is more readily accepted than the financing of improvements at a charge below the current rate of interest; whilst the form of digging holes in the ground known as gold-mining, which not only adds nothing whatever to the real wealth of the world but involves the disutility of labour, is the most acceptable of all solutions.