The Keynesian Revolution

Abstract

The impact Keynes had on economics with his book The General Theory is what is known as the Keynesian Revolution in economic thought. This Keynesian Revolution is one of the most remarkable episodes in the entire history of economic thought; never before had the economics profession been won over so rapidly and so massively to a new economic theory, and nor has it since. Within the space of about a decade, 1936–46, the vast majority of economists throughout the Western world were converted to the Keynesian way of thinking. Many of those early converts felt themselves impelled to repudiate virtually the entire corpus of received economic doctrine, taking up the Keynesian system with an ardour that is more commonly associated with religious conversions. Moreover, it was the younger generation who proved most susceptible to the Keynesian infection; criticism of Keynes came almost solely from the older members of the profession. In short, the Keynesian Revolution comes close to conforming to a ‘scientific revolution’ as defined by Thomas Kuhn, involving a sense of theoretical ‘crisis’, the emergence of a radical new ‘paradigm’, and a pronounced generation gap in the response of scientists to the clash of the old and new paradigms.