Keynesian Economics in the Sixties [1963]

Abstract

The most striking development in Keynesian economics in the last decade has been the retrogression in its general understanding and acceptance. Ten years ago it seemed as if the general theory of employment had almost completed the course through which all new ideas have to pass. From being considered something wrong and revolutionary it had become something right and natural and even “what we had known all along.” When a new theory has reached this degree of naturalization there is good hope of it being applied to practical problems since it is no longer regarded as “a theory” but as “common sense.” Keynesian economics is, however, now passing through yet another phase. So successfully has it been disguised as “what we have known all along” that the ancient fallacies have been able to creep back on the stage, pretending that they are the new “common sense.”