Since the Keynesian Revolution invented modern macroeconomics, all mainstream schools of economics have taught us that we should be happy if we are prosperous. But instead, we feel hollow and morally anxious – our economy feels empty. The Keynesian Revolution and Our Empty Economy: We’re All Dead by Victor Claar and Greg Forster calls us to restore the study and practice of economics to its roots in moral and cultural knowledge, reminding us that human beings are more than consumers. Drawing on paradigms from earlier historical periods while affirming modern market systems, this book encourages a return to a view of human beings as persons with the right and responsibility to discover, and do, the things in life that are intrinsically good and enduring.
Acton University Lunch Event
The Oikonomia Network is sponsoring a lunch event during the Acton University conference to highlight the release of The Keynesian Revolution and Our Empty Economy: We’re All Dead. Join authors Victor Claar and Greg Forster, as well as leading scholars Angela Dills and Lenore Ealy, for a conversation about this groundbreaking book on Wednesday, June 19 at 12:15pm in Ballroom D.
The first 20 people to arrive will get free copies of the book – a $100+ value! The next 20 to arrive can buy hard copies of the book at its lower Kindle price.
Below is an excerpt from The Keynesian Revolution and Our Empty Economy: We’re All Dead by Victor V. Claar and Greg Forster (Palgrave Macmillan, 2019).
America is haunted by a deep and growing anxiety about the structures of its economy. This anxiety crosses all lines of ethnicity, class, religion, party, and ideology; it has been an equally powerful force in the striking rise to power of former fringe figures Donald Trump and Bernie Sanders; in the Tea Party and Occupy Wall Street; and at the kitchen tables of millions of ordinary, apolitical Americans. It is not a mere selfish concern about who gets how much. It is a moral anxiety, a concern about what kind of people we are becoming. Is America still a country where it pays to “work hard and play by the rules,” in Bill Clinton’s famous phrase? Or have we become the kind of place where cheaters consistently get ahead and slackers get a free ride – where working hard and playing by the rules is for suckers?
The Empty Economy and Hollow Prosperity
America is a prosperous country – by historical standards, breathtakingly so. But we are not satisfied with our prosperity; it feels hollow. The richer we get, the more dissatisfied we seem to become. Where our ancestors were anxious to achieve affluence, we are anxious about our affluence. Our booming economy feels empty….
This change is also visible far beyond public policy debates. It runs much deeper. It goes down to the roots of who we are.
Taking an Uber ride through the streets of Omaha, heading to a seminar at Creighton University, one of the authors of this book noticed a building with an impressive glass dome. Hundreds of small windows fit together in an intricate pattern to form the dome. He remarked to the Uber driver on the building’s unusual and impressive architecture.
“Yup,” the driver responded. “I put in most of that glass.”
The driver, who looked about 75, explained that he had worked most of his life in window installation. Over the course of a long career, he had worked on most of the larger buildings in Omaha. Now that he was beyond the age for that kind of work, driving for Uber allowed him to stay connected to his professional legacy.
“I feel pretty good, driving around the city, seeing all the glass I put in,” he said.
But he said it in a bittersweet tone, one that reminded its hearer that it was not only in this driver’s personal history that such things felt like they were departing the present for the past. The world where people were allowed to care about that kind of thing – the world where your daily work amounted to something important, something whose worth could not be measured in dollars and cents – seemed to belong to America’s past, not just to this driver’s past….
What Causes Hollow Prosperity?
This book will argue that the underlying source of the anxiety that our prosperity is hollow is the indifference of our economic systems to moral categories. Our current economic system was not created with the intention that it would promote greed, envy, sloth, gluttony, vanity, and other selfish desires in our economic lives. But that is only because it does not even recognize the existence of these things. It does not see them as relevant to its design and functioning. Worse, as we will show, the conscious indifference of our economic thinking toward moral categories has facilitated an unconscious adoption of economic thought that is much worse than merely indifferent to morality; it actively promotes our worst instincts. Our refusal to think about virtue and higher purposes in economics has made it possible for us to unknowingly adopt economic structures that actively deform us (without our realizing it) into selfish, materialistic economic actors.
The result of this conscious moral indifference and unconscious moral deformation is visible all around us. We find it in business practices that extract money without creating value for the customer; in crony capitalism that uses illicit collusion or government favoritism to enrich big firms and political cronies at the expense of customers, investors, small businesses, and entrepreneurs; in able-bodied people at all levels of the socioeconomic spectrum living in long-term dependency on one-way subsidies from others (the state, churches, friends, and family); and countless other ways. Our conscious indifference to moral categories creates a culture in which we feel like those who have wealth generally don’t deserve it – that working hard and playing fair doesn’t pay. Our unconscious moral deformation creates a culture in which that perception is increasingly accurate….
We’re All Dead: The Keynesian Revolution
In this book, we argue that the moral deformation in our economic system is grounded in a revolutionary transformation in the discipline of economics in the first half of the twentieth century….
“In the long run we are all dead.” Nothing captures the dramatic clash between older moral views and the new one that now guides economics as perfectly as this famous rejoinder from John Maynard Keynes to the appeals of old-fashioned economists that we think in longer terms. Older views prioritized what we leave to our grandchildren; Keynes prioritized immediate gratification so completely that the good of future generations vanished from any present relevance….
Keynes moved the discipline from an older, broader set of moral presuppositions to a new and narrower set of moral presuppositions. Older views were robustly teleological – they had a more fully articulated understanding of what counted as a flourishing human life. They saw productive human work as the source of wealth; they prioritized giving people stewardship over their own lives for their own flourishing as well as the long-term stewardship of civilization for future generations. Keynes replaced this with shallow anthropology and a utilitarian moral ethic. He saw people’s desire to consume as the source of wealth, rather than their desire to create; he trusted that people could be so rational, and that reason itself could be so far-seeing, that control of the economy could be safely handed over to elite-educated, plenipotentiary technocrats; and he prioritized short-term gratification over long-term stewardship of civilization….
Beyond Chicago: Crafting an Effective Response
The Keynesian Revolution, like all revolutions, was followed by reactions. Chief among them were the critiques of Keynesianism from two great rival schools: the Chicago school and the Austrian school….We argue that the schools reacting against Keynesianism had limited success because they adopted many of the same inadequate moral presuppositions as Keynesianism itself. They were only a partial reaction. They reacted against Keynesianism’s policy conclusions, but not (or not fully) against its underlying anthropological assumptions, utilitarian morality, and social vision….
In the long run (if our Keynesian friends will forgive the expression) the universe always punishes moral indifference and deformation. We see the signs of that around us, in America’s growing anxiety about its affluence – and its growing skepticism that the solution can be found in the economic theories of any of the three major economic schools we consider here. As every entrepreneur knows, every problem is a potential opportunity, and the bigger the problem, the bigger the opportunity. America still has deep cultural wells of wisdom, out of which we can still draw the water we need. We see an entrepreneurial opportunity for a new conversation that speaks to America’s anxieties by finding our way toward moral coherence in our economic lives.