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The Study of Man: Is Keynesian Economics Outdated?

- Abstract

THE major theoretical generalizations of economics have usually filled a felt need. This need generally rose from the dissatisfaction with conventional explanations which failed to answer important questions of public policy, and which still less adequately accounted for the decisions that men found it profitable to make in their daily lives. The message of individual initiative in Adam Smith’s Wealth of Nations fell upon the prepared ground of late 18th-century experience. In the English community of the period, increasing numbers of merchants were discovering how much more money they could make by ignoring than by obeying the nagging restrictions upon their buying and selling Which a fussy mercantilist state had imposed. At the same time a great many ordinary workers were finding it desirable to evade apprenticeship regulations and breach the laws of settlement which, in theory, prevented them from leaving places where wages were low and work was scarce and going where wages were higher and work more plentiful. In short, what was going on was a boom in individual initiative, an outburst of artistic, literary, commercial, agricultural, industrial, and scientific ingenuity seldom paralleled in human history. Naturally the state opposed its manifestations, and political economists were at a loss to explain its nature.

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