The Keynesian Revolution in Context

  • Gordon A. Fletcher
Part of the Keynesian Studies book series (KST)


Though the Keynesian Revolution was a revolution of theory, it was a revolution with a purpose in the real world. Its purpose was to resolve a contradiction in orthodox economics which had been exposed and brought into focus by a particular set of economic circumstances. This is not, however, to argue that Keynes had been misled into advocating egregiously reckless expedients by a ‘very exceptional and almost unique’ episode, as claimed by Hayek;1 or that it was the ‘history-bound analysis’ as pictured by H. G. Johnson.2


Public Choice Public Expenditure Government Expenditure Money Supply Socialise Economy 
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Notes and References

  1. 1.
    F. A. Hayek, New Studies in Philosophy, Politics, Economics and the History of Ideas (London: Routledge & Kegan Paul, 1978) pp. 199, 200.CrossRefGoogle Scholar
  2. 2.
    H. G. Johnson, Further Essays in Monetary Economics (London: Allen & Unwin, 1972) p. 57.Google Scholar
  3. Generally dismissive, Johnson has described Keynes’s vision of the stationary-state role of the entrepreneur as a ‘Victorian fin-de-siècle intellectual period piece’. See H. G. Johnson, ‘Keynes and the Developing World’, in R. Skidelsky (ed.) The End of the Keynesian Era: Essays on the Disintegration of the Keynesian Political Economy (London: Macmillan, 1977) pp. 93–4.Google Scholar
  4. 5.
    It answers, for example, S. H. Frankel’s charge that the economy was to be made to pursue goals that Keynes thought were appropriate for it. See Frankel, Money: Two Philosophies (Oxford: Blackwell, 1977) pp. 6, 84.Google Scholar
  5. 6.
    D. E. Moggridge, Keynes 2nd edn (London: Macmillan, 1980) p. 32. The reference is to Keynes, General Theory, p. 20n. See also the reference to Keynes, CW, XIV, p. 259.Google Scholar
  6. 7.
    Lord Robbins, Autobiography of an Economist (London: Macmillan, 1971) p. 153. See also pages 133 and, in particular, 152–5.CrossRefGoogle Scholar
  7. 8.
    The proposals were drawn up by (Sir) Harold Nicolson. His chagrin on hearing of Churchill’s decision is recorded in his diary: ‘all those days of work have led to nothing’. See N. Nicolson (ed.), Harold Nicolson: Diaries and Letters 1939–1945 (London: Collins, 1967) p. 139. See also pages 101, 102, 130, 143–4, which refer to the purpose and content of the proposals.Google Scholar
  8. 9.
    Sir George Clark, English History: A Survey (Oxford: Clarendon Press, 1971) p. 533.Google Scholar
  9. 11.
    W. Beveridge, Full Employment in a Free Society (London: Allen & Unwin, 1944). It is interesting that this very ‘moral’ document made the achievement of full employment in a free society conditional on the maintenance of a proper attitude of restraint on the part of wage negotiators and price setters.Google Scholar
  10. 13.
    Argued by M. Peston, The British Economy: An Elementary Macroeconomic Perspective (Deddington, Oxford: Philip Allan, 1982) pp. 67–8. Peston points out that the rise in the natural rate may also be associated with structural changes that were taking place.Google Scholar
  11. 14.
    Under the reforms of Competition & Credit Control, 1971. For an account, see G. A. Fletcher, The Discount Houses in London: Principles, Operations and Change (London: Macmillan, 1976) chapters 13, 14.CrossRefGoogle Scholar
  12. 17.
    V. Chick, Macroeconomics After Keynes: A Reconsideration of the General Theory (Oxford: Philip Allan, 1983) p. 338.Google Scholar
  13. 23.
    Samuel H. Beer, Britain Against Itself: The Political Contradictions of Collectivism (London: Faber & Faber, 1982).Google Scholar
  14. 29.
    A generally held conclusion, recently given support in Michael D. Bordo and Anna J. Schwartz (eds), A Retrospective on the Classical Gold Standard, 1821–1931 (Chicago & London: The University of Chicago Press, 1984) pp. 16–20. As an alternative, Hayek has argued for free choice in currencies for transactors: New Studies, pp. 223–9.Google Scholar

Copyright information

© Gordon A. Fletcher 1989

Authors and Affiliations

  • Gordon A. Fletcher
    • 1
  1. 1.The University of LiverpoolUK

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