ŏ Ŕ ō Ŝ Š ő ŞȠĻe Keynesian Heritage
in Economics*
ŗőťŚőş ŠŔő şōŘőşřōŚ
What difference has theGeneral Ļeorymade? How do economic theory
and policy differ from what they would have been if Keynes had never
lived?
Keynes sold the economics profession on concern with the macro
problems of employment and demand. Ļis concern was not new.
Even—or especially—among Chicago economists in the early years of the
Great Depression, it had already led to policy recommendations sounding
remarkably Keynesian (DavisȀȈȆȀ). But understanding was far from gen-
eral, as one can verify by browsing through Joseph Dorfman’sEconomic
Mind in American Civilisation(ȀȈȄȈ) and by considering how experimen-
tal and eclectic anti-depression policy was. Keynes saw and provided what
would gain attention—harsh polemics, sardonic passages, bits of esoteric
and shocking doctrine. It helps a doctrine make a splash, as Harry John-
son (ȀȈȆȀ) suggested, to possess the right degree of difficulty—not so
much as to discourage those who would thrill at being revolutionaries,
yet enough to allow those who think they understand it to regard them-
selves as an elite vanguard.
If anyone should argue that pro-spending policies inspired by Key-
nesian doctrines contributed to general prosperity in the industrialised
countries for roughly two decades after World War II, I would concede
the point. It took roughly that long for expectations to become attuned to
what was happening, for the Phillips unemployment/inflation trade-off to
break down, and for expansionary policies to waste their impact in price
*FromKeynes’s General Ļeory: Fifty Years On, eds. John Burton et al. (London: Insti-
tute of Economic Affairs,ȀȈȇȅ),ȁȆ–ȃȃ; reprinted inA Critique of Keynesian Economics,
ed. Walter Allan (New York: St. Martin’s Press,ȀȈȈȂ),ȄȈ–ȆȀ.
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