The Keynesian Revolution and the Theory of Countervailing Powers

Abstract

John Maynard Keynes keeps returning, like an ageing diva giving farewell performances. What does this tell us? First, that in economics there are no final victories or defeats; rather, there are ebbs and flows obedient to changes in consciousness and the world. Second, it tells us that the world changes and so do the structures of power. The rise and fall of different schools of economics is related, undoubtedly, as was said this morning, to shifts in the balance of social and economic power. Marx understood that. I want to consider the passage of Keynes’ ideas from acceptance to rejection to the modest revival of 2008–2009.