ABSTRACT
Keynes was the most influential economist of the twentieth century, and his doctrines reached out into the Ivory Towers and – less expectedly – also into the corridors of political power in most countries around the globe. It is difficult to find a book on the history of the period 1918-1945 published on either side of the Atlantic that does not contain some reference to his work, but he did not convert his many skeptics and make an impact on public policy overnight. Chapter 9 describes the prolonged warfare between Keynes and the traditionally minded Bank of England and the Treasury (the British government department that finances all the others), but by 1944, Keynes’s doctrines were widely enough believed to be embodied in British government policy; and many other countries followed. How was this accomplished? I shall look at three causes:
1 The inherent soundness of the doctrines themselves: the degree to which they diagnosed accurately and fully the causes of the world’s economic and social problems at the time and, if the ensuing policy prescriptions were effective, without producing toxic side effects. These problems were rooted in the painful amount of unemployment in most countries during the 1930s that most people thought to be a chronic characteristic of peacetime conditions in economically developed countries. Keynes as an analyst was concerned with diagnosis; then as a practical and humanitarian man, he wanted action.
