Peter Boettke has been interested in a topic that has also interested me: why and how was Keynesianism so successful in the United States. We've come to very different conclusions, some more thinking on his are here.
I think there are major blindspots to his approach, and one of the big one is a lot of problems with his take on what Keynesianism is exactly. Some of that is fleshed out in this interview that he also posted recently where he suggested that Keynesianism is outside of the "mainline" of economic thought that emphasizes the price mechanism, market efficiency, etc. If that's your starting point, then I can see why the history of American economic thought in the early twentieth century can be somewhat puzzling!
The understanding that has been stewing in my head for a while is that proto-Keynesianism economics has been American economics for quite a long time. It's been in both our popular and our academic understanding of economic science. One of the best examples of this is Jefferson himself in his letters to J.B. Say, and also to Madison. Benjamin Franklin and Irving Fisher both anticipated the liquidity preference theory of interest. What Grampp called the "liberal elements of English mercantilism" pervaded the economic thought of the colonial period and the early republic (this is covered well by Joseph Dorfman). Opening the West was all about lowering the marginal efficiency of capital (albeit not through the interest rate or fiscal policy) and Keynesian concerns about effective demand pervaded that effort. Bimetallists and populists of the late twentieth century all understood this too. Most of this tradition even managed to avoid the crudeness of "underconsumptionism" because it recognized that the real concern is investment demand, not consumption. America was fertile for Keynesianism long before modern progressivism and it would have done well here even if progressivism never came to pass, I think. This isn't to say that progressivism wasn't particularly consistent with Keynesianism - certainly it was. But I don't think it's the ultimate facilitator that Boettke seems to think it was. The roots go considerably deeper.
This is what living in a frontier society does. A frontier society has a strong disposition to embrace Smithian-Keynesian economics, which understands that the world is dynamic, that the division of labor is limited by the extent of the market, that we are neither pinned down to a production possibilities frontier (Smith) nor are we guaranteed to reach our full potential (Keynes).
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