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2 - Politics and markets: Keynes and his critics

from Part I - The changing fortunes of liberal democracy

Published online by Cambridge University Press:  28 March 2008

By
Wayne Parsons
Edited by
Terence Ball  and
Richard Bellamy
Terence Ball
Affiliation:
Arizona State University
Richard Bellamy
Affiliation:
University College London
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Summary

Introduction

John Maynard Keynes (1883–1946) is one of that small group of social scientists who may be said to have had a profound influence on the development of their subject as well as on the conduct of political argument and public policy. His work is accorded the singular accolade of having an entire branch of economics named after him, and his impact on the theory and practice of politics and public policy is such that we speak of ‘the Keynesian revolution’ and ‘the age of Keynes’. ‘Keynesianism’ came to prominence in the 1940s, 1950s and 1960s as an approach to economic policy which focused on the management of the demand side of the economy so as to secure full employment. However, by the 1970s, the dominance of Keynesian economics in government and academia faded in the face of persistent high inflation and unemployment (‘stagflation’, as it became known). James Callaghan famously confessed to the annual conference of the Labour Party in September 1976 that the option of ‘spending your way out of recession’ no longer existed. By the 1980s, as Robert Skidelsky observed, ‘Keynes, who was praised for having saved the world from Marxism, had joined Marx as the God that failed’ (Skidelsky 1996, p. 107). This chapter shows that Keynes, despite becoming an ‘ism’, was not as dogmatic a thinker as those in the vanguard of the counter-revolution against ‘Keynesian’ economics chose to depict him. Rather he fashioned his theories from his philosophy and beliefs in response to events and problems of the day.

Type
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The Cambridge History of Twentieth-Century Political Thought , pp. 45 - 69
Publisher: Cambridge University Press
Print publication year: 2003

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Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×