Keynesians Represent Profits as Resulting From (1) A Difference between the Rate of Interest and the "Marginal Efficiency of Capital," and/or (2) Monopoly and High-Pressure Salesmanship

Keynesians usually represent profits as resulting from either or both of: (1) a difference between the rate of interest and the "marginal efficiency of capital," (2) monopoly and high-pressure salesmanship. In either case, the recipient of profits is given little or no credit for earning them by useful service.

This Keynesian antipathy or indifference to the qualities developed in free markets arises from the belief that free markets are economically undesirable (e.g., the capital markets) and politically impracticable (e.g., the labor market).

Moreover, as difficulties arise in carrying out their proposals for "socializing" saving and investment, economists of this persuasion usually advocate more restriction of markets rather than less. Thus Dr. Lawrence Klein, for example, favors government price control to prevent inflation that might result from Keynesian "loan expenditures," and he rationalizes this repudiation of freedom of exchange by the contention that "greedy profiteering" was the only liberty infringed by the Office of Price Administration in World War II.

--Vervon Orval Watts, Away from Freedom: The Revolt of the College Economists (1952; repr., Auburn, AL: Ludwig von Mises Institute, 2008), 89-90.