ABSTRACT
John Maynard Keynes’s explanation, as he expressly intended, rapidly became accepted by many economists and by 1939 few academics could claim not to have at least seriously questioned the assumptions they held about the way the economy operated. Thereafter, economic policy came to be run very much on Keynesian lines by both major political parties. Since 1979, Keynes and Keynesian policies have been abandoned and the maintenance of full employment has been formally dropped from the government’s list of specific policy objectives. The major reason for the abandonment of Keynesian economic policies in Britain was their association with unacceptable levels of wage inflation and successive balance of payments crises. Formal incomes policy is seen by Keynesians as a necessary component of any remotely realistic alternative to Thatcherite economic policies. The chapter also presents an overview of the key concepts discussed in this book.
