The Fall and Rise of
Towards the end of 2008, with the world economy in the grip of an unprecedented financial crisis and entering into a deep recession, the name of John Maynard Keynes began to crop up with a frequency that would have been completely unimaginable only a decade or two earlier. The parallels with the economic circumstances of the 1930s—financial crisis, recession, and the threat of deflation—had apparently been lost on no one. But not since an image of Keynes had adorned the front cover of Time magazine in December 1965 was “Keynes” a name on everyone’s lips.1 Things had changed. In October 2008, the Financial Times carried an image with a column by Ed Crooks; on November 8, The Independent of London did the same with a Nick Fraser article; and on November 30, the New York Times carried yet another image, this time attached to an article by Greg Mankiw. Even Keynes’s face was popping up everywhere. Whether it was Richard Nixon or Milton Friedman who said, “We are all Keynesians now” (or, indeed, whether it was actually either of them), something like it could surely be said today of a raft of politicians, policymakers, financial journalists, opinion leaders, and even economists. They were all dusting the cobwebs off their old copies of his books.
Consider the changes that had taken place. Only a year or two after we learned of the death of Milton Friedman, whose name had been better known than that of almost any other economist for most of the last quarter of the twentieth century—and whose ideas had become the basis of the neoliberal consensus that swept to dominance in economic circles during those same years—the name of his arch adversary was back in