The Demoralizing Trap of Keynesianism

Journal of Markets & Morality, Forthcoming

18 Pages Posted: 3 Apr 2016 Last revised: 26 Jan 2017

See all articles by Daniel J. Smith

Daniel J. Smith

Middle Tennessee State University - Department of Economics and Finance

Sean Patrick Alvarez

Troy University - Manuel H. Johnson Center for Political Economy; Troy University

Date Written: March 31, 2016

Abstract

Classical economists since the days of the Scottish Enlightenment thinkers held that one of the primary arguments for capitalism, in addition to its superior economic efficiency and its grounding in robust political economy, was its civilizing role. They recognized that commerce channels self-interest into voluntary, mutually beneficial pursuits. The cooperative pursuit of profit thus encourages the development of tolerance, honesty, and manners even among diverse people. Keynesianism, however, undermines the civilizing role of commerce by promoting wide-spread government control and direction of the economy. Because big government undermines the market and fosters cronyism, commercial virtues are dampened, and they are often replaced with dishonesty, distrust, and intolerance.

Keywords: Keynes, Keynesian economics, cronyism, rent-seeking, doux commerce thesis

JEL Classification: E12; B00

Suggested Citation

Smith, Daniel J. and Alvarez, Sean, The Demoralizing Trap of Keynesianism (March 31, 2016). Journal of Markets & Morality, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2757161 or http://dx.doi.org/10.2139/ssrn.2757161

Daniel J. Smith (Contact Author)

Middle Tennessee State University - Department of Economics and Finance ( email )

MTSU Box 27
1301 E. Main St.
Murfreesboro, TN 37132-0001
United States

HOME PAGE: http://www.danieljosephsmith.com/

Sean Alvarez

Troy University - Manuel H. Johnson Center for Political Economy ( email )

Bibb Graves Hall
Troy, AL 36082
United States

Troy University ( email )

Troy, AL
United States

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