Madmen, Markets, And Power

Old ideas never really vanish; they take new shapes, get new champions, and quietly steer the rules we live by. We open the vault on Keynes, mercantilism, and the intellectual currents that still drive modern trade, monetary policy, and the supply chains that bind our lives together. Along the way, we revisit the Irish famine and the Scottish clearances as stark reminders of what happens when conviction outruns care, and why today’s policy theater can still shift costs onto those with the least buffer.

From stimulus checks and green infrastructure to forward guidance and “animal spirits,” we break down how Keynesian tools stabilize demand—and how distortions turn them into engines of asset inflation and soft inequality. Then we zoom into the resurgence of neomercantilism: export-led playbooks, strategic subsidies, tariff walls, and the new gold of our age—chips, patents, and data. Tech sovereignty sounds like prudence, but it can harden into cronyism and compliance sprawl, especially when paired with nostalgic myths of national greatness.

For operators and strategists, the stakes are concrete. Demand swings reshape retail, autos, and construction. Rates force hard pivots from expansion to cash discipline. Supply chains regionalize, nearshoring accelerates, and critical inputs like semiconductors and batteries become leverage points. We offer a pragmatic framework: intellectual vigilance to avoid ideological capture, systems mapping to see interdependencies, coalition building to amplify signal, narrative ownership to earn trust, and scenario planning to move before policy whiplash hits.

If you want an edge in a world ruled by ideas, not just headlines, this conversation gives you the map and the mileage. Follow and subscribe for more clear-eyed takes on policy, power, and the real-world logistics behind them—and share your biggest insight or question so we can dig deeper next time.

Chapters

• 0:00 Welcome And Subscription Prompt
• 0:32 Framing The Stakes With History
• 2:06 Tyranny And The Cost Of Ideas
• 3:36 From Famine To Clearances
• 4:49 Preindustrial Trade Versus Today
• 6:22 Keynesian Influence And Misuse
• 8:21 Neomercantilism Resurges
• 11:20 Who Pays For Policy Choices
• 12:24 Business Strategy Under Policy Shifts
• 15:23 Nostalgia And Modern Mercantilism
• 17:54 A Framework For Vigilance And Resilience
• 19:02 Closing Thoughts And Sign Off

Transcript

Tony Hines: 0:00

Hello, Tony Hines here you're listening to chain reaction all about supply chain advantage. Thanks for dropping by today Stick around, stay tuned, stay informed, and stay ahead with Chain Reaction. Subscribe to chain reaction. You'll be first to know when new episodes are out. And you'll never miss an episode. We're gonna talk about some of the contemporary issues that impact our lives and global supply chains, and I'm going to set it in the context of the history, our industrial history, our industrial heritage, and why the policies of today may be so wrong in how they're trying to tackle the problems we face. So let's see what we can learn from the past. The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men who believe themselves to be quite exempt from any intellectual influence are usually the slaves of some defunct economist. Madmen in authority who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. Well, this was written in nineteen thirty five. That's four years before the Second World War started, and it was written by John Maynard Keynes. He was one of the most influential economists in that century. It was a time set with turmoil and uncertainty with Adolf Hitler, Joseph Goebbels, and Joseph Stalin. It was an age when Stalin was oppressing the Russian nation, supposedly along socialist principles developed by Marx and Lenin. But of course, it was the age of imperialists too. Imperialism was rife, and did socialism in the USSR, as it developed, simply become authoritarianism? Well the path they took was the path they chose, shaped by the scribblers and academics, and shaped by the world around them and the forms they decided to follow. Tyranny prevailed, and it's to tyranny we turn because today we are returning to this tyrannic world, a world shaped by scribblers of the past, shaping our tomorrow. And there are madmen around us, and they are men who are shaping the world with their policies and their influence, which extends beyond borders, which can't contain them or their ideas of self righteousness. Their conviction, of course, may not have a personal cost to them, but it will have a cost to almost everybody else. We can think back to the potato famine in eighteen forty five when the first treasury minister in Britain at the time, Richard Trevelyan, decided not to send food to Ireland to eliminate and eradicate the starvation that was taking place, but rather decided it would be better to leave it to the markets. It was at the time when there were no potatoes available for consumption in Ireland, and of course grain was being exported out of Ireland, going elsewhere in the world, so food was in short supply. And previously there had been people of conviction who decided that they needed to be part of the wool trade in Scotland with the clearances, and so they cleared people off the land and replaced them with sheep, so they had enough wool for the trade for the market. And does this still go on today? Unfortunately, it does. It might not be the same track, but it's certainly of the type, of the form. Pre industrial trade was localized. It was slow and constrained by physical geography and political boundaries. Mercantilism dominated, with states hoarding gold and controlling trade through tariffs and monopolies. Guilds and feudal systems restricted innovation and market access, and colonial extraction created asymmetrical flows of goods and wealth, laying foundations for global inequality. Modern trade, by contrast, on the face of it, in our world of appearance, it's digitally accelerated with real time logistics, e commerce and financial flows, and it's institutionally scaffolded by the World Trade Organization, the International Monetary Fund and Trade Agreements, the institutions that have been put in place to keep that system in place. It's complex and it's interdependent, where disruptions in one node, for example in semiconductors, ripples around the globe at lightning speed. Yet the underlying power dynamics of who benefits, who bears the cost, remain eerily familiar. Caine's famous quote about madmen in authority, distilling their frenzy from some academic scribbler a few years back is more than poetic. It's a warning. Ideas shape policy, often long after their originators are gone. Caine's own work, the general theory, revolutionized economic thought by legitimizing state intervention during downturns. And Keynesianism influenced the New Deal, the post war reconstruction, and modern fiscal stimulus. But those ideas can be perverted. Authoritarian regimes have cherry picked economic theories to justify control. Neoliberal distortions of Keynes have led to debt fueled growth without the social safety nets he envisioned. So what's the cost of misappropriation? When academic ideas are weaponized, policy becomes performative, serving elites while claiming public benefit. Trade becomes extractive, not generative, outsourcing risk, environmental degradation, and labour exploitation. Global inequality widens as intellectual frameworks are used to rationalise austerity, deregulation or surveillance. And this is the cost Keynes warned of, not to the scribblers or the madmen, but to the millions caught in the machinery. Contemporary global economic policies, from stimulus packages to strategic trade interventions, are deeply rooted in Keynesian principles and pre industrial mercantilist logic. These frameworks continue to shape how nations manage crises, assert power, and distribute cost. We still have echoes of the past in today's fiscal and monetary policies. Modern governments routinely deploy Keynesian inspired tools to stabilize economies during downturns. Stimulus packages, for example, the US KERS Act of twenty twenty and DU recovery funds channelled direct payments, unemployment benefit, and infrastructure spending to boost aggregate demand. This is classic Keynesian counter cyclical intervention. Public works and green investment. Infrastructure spending remains central to fiscal strategy. The UK's Green Industrial Revolution and Biden's Infrastructure Investment and Jobs Act reflect Keynes' belief in government led productivity enhancement. Monetary policy coordination. Central banks like the Bank of England, the Fed, and the European Central Bank use interest rates and manipulate them, along with quantitative easing to stimulate borrowing and investment. These echo Cain's liquidity preference theory and his scepticism about monetary policy's limits during liquidity traps, and forward guidance and animal spirits are prevalent. Policymakers now actively manage expectations. Central banks signal future rate paths to stabilize markets, an institutionalization of Cain's insight into psychological drivers of investment. These policies reflect some of Cain's core ideas. Markets don't self correct quickly enough during crisis, so governments have to intervene and act decisively to restore equilibrium. Let's take a look at neomercantilism strategic trade in a globalized world. While free trade dominates rhetoric, neomercantalist strategies are resurging. We talk about export led growth models. China, Germany and South Korea prioritize trade surpluses, subsidize strategic industries, and manage currency valuation, echoes of mercantilist gold hoarding logic. Industrial policy and tech sovereignty, the US Chips Act, and the EU's strategic autonomy push reflect mercantilist aims, control key technologies, reduce dependence and secure national advantage. And then we have protectionism and tariffs. Trade wars, for example, the US and China, and reshoring initiatives revive pre industrial instincts to shield domestic markets and assert geopolitical leverage. These policies mirror the pre industrial belief that trade is a zero sum game, where national power is built by controlling flows of goods, capital and innovation. Let's look at the cost. Who pays for these policies? Whether Keynesianism or Macantalyst in spirit, these policies often shift burdens. Debt and inflation. Stimulus spending can inflate asset bubbles and saddle future generations with debt, especially when not matched by productivity gains. Global inequality, export led models and strategic subsidies distort competition, marginalizing weaker economies and exacerbating trade imbalances. Ideological capture as Keynes warned, madmen in authority may misuse academic ideas to justify authoritarian control or crony capitalism, seen in regimes that deploy state led economics to entrench power, rather than uplift citizens. Let's trace how these historically rooted policies directly shape business strategy, risk and resilience in today's world. Well let's take a look at the impact of Keynesian inspired policies. Demand side stimulus drives sectoral booms. Consumer facing industries such as retail, hospitality, and the auto industry might benefit from stimulus checks and tax rebates. Construction and infrastructure firms gain from public works programs, and green tech and renewable energies attract investment through climate linked fiscal packages. Interest rate manipulation alters the capital strategy. We might see cheap borrowing, which fuels expansion, mergers and acquisitions, and stock buybacks. High rates, which were seen post 2022, force deleveraging, there's margin compression and strategic pivots towards cash flow discipline, and a psychological signaling that shapes business confidence, central bank guidance and government's rhetoric, influence hiring, investment and inventory decisions. Kane's Animal Spirits in Action If we look at neomecantilist logic in business strategy, we have strategic reshoring and supply chain realignment. Firms reevaluate global sourcing to reduce geopolitical risk, seen in semiconductors, pharmaceuticals, and DV batteries. Regionalization replaces globalization, near shoring to Mexico, Eastern Europe or Southeast Asia, all happening as a result of the neomecantalist logic in play. Then there's export incentives and subsidies. Businesses in favoured sectors, for example, AI, clean energy, and defense tech receive direct support, mirroring that mechantalist favouritism, the cronyism. And then there's trade barriers, tariffs, quotas, which create artificial advantage for domestic producers. But they'll get pushback too, and pushback means it might not work. Tech sovereignty and intellectual property protection. Companies align with national strategies to secure patents, data and innovation pipelines, and then of course compliance burdens. They rise as governments enforce digital sovereignty and cybersecurity mandates. The strategic cost and risk for business, as policy volatility, businesses face whiplash from shifting fiscal and trade regimes, especially in election cycles or geopolitical tensions. There are uneven playing fields. Small and medium sized enterprises often lack access to subsidies or lobbying power, while multinationals navigate complex regulatory arbitrage. And then there's ideological capture. Firms may be pressured to align with national narratives or risk reputational and operational backlash, especially in authoritarian contexts. Yeah, make America great again? Hmm Well, there we go. I think we can conclude that Keynes was right. Yes, I would say academic scribblers shape our world profoundly. Ideas from economists, historians and theorists often outlive their authors, but quietly steering policy decades later, even centuries later. Keynesian interventionism underpins modern stimulus, infrastructure and monetary policy. Mechantalist instincts resurface in strategic trade and tech sovereignty. Neoliberal distortions of academic work have justified austerity, deregulation, and privatization. Even supply chain strategies are shaped by these intellectual currents from just in time, lean thinking to circular economy models rooted in systems theory. Yes, madmen adopt ideas to serve power. History is littered with examples. Authoritarian regimes cherry pick economic theories to justify control. Populist leaders weaponize fiscal tools for short term popularity and to ensure they get voted back in. Corporatist alliances use academic legitimacy to mask extractive practices. The danger isn't just misuse, it's selective appropriation, where ideas are stripped of nuance and deployed for expedience. Yes, we're rehearsing mechantilism, but the bygone age was never golden. The nostalgia of national greatness often ignores colonial exploitation, not mutual prosperity, trade imbalances, not fair exchange, protectionism, not innovation. Today we push for resuring, tech sovereignty and export dominance, echoes of mechantilism, but with digital tools and global independence. It's a romanticized past, repackaged for modern anxieties. So what can we mere mortals do? Here's a framework for managing risk, resilience and influence. Let's take the following different strategies. First of all a strategy of intellectual vigilance. Track the origin and evolution of ideas, shaping policy in our world today. Avoid ideological capture and false narratives because there's plenty of those around. Systems thinking is important. Map interdependencies across trade, tech and regulation. Build resilient adaptive strategies. Own the narrative, create public phasing content that explains the truth on all of these matters, influence discourse, and democratize insight, build coalitions, engage professional networks and thought leaders in discussion, amplify, impact and shape policy from below, and scenario planning, model the future based on policy shifts and trade dynamics, prepare for volatility and strategic pivots. Well, hope you've enjoyed today's episode, and I hope you've found it thought provoking. But we'll remember we're in a world which is shaped not always by what we can do, but by how others are constructing the political narrative, the geopolitical interdependencies, the policies and the regulations that constrain business activity. So if you want that advantage, you have to search for nuggets of leverage that you can employ to generate advantage for your business, your organization in this difficult terrain. Thanks for joining us on Chain Reaction. I hope you've enjoyed the episode, hope you've learned something new, and I hope you'll come back next time when we'll have another edition of Chain Reaction. Until then, take care. I'm Tony Hines, I'm signing off, and I'll see you next time. Bye for now.