What started Keynes on the road to the Keynesian Revolution was the incomplete British recovery from the depression of 1920 to 1922. - Robert Skidelsky

The question remains: to what extent were the successes and failures of the golden age the result of Keynesian theory, however bastardized? The quick answer is: to a much greater extent in the former than in the latter. Keynesianism provided an analytical framework for organizing policy choices. It also provided ad hoc rationalizations for what governments wanted to do for other reasons. At the rhetorical level, these were important. They created the expectation that full employment would be maintained by policy. This reinforced the favourable background for business investment. To a more limited extent, Keynesian policy as practised in the 1 9 6os brought the golden age into crisis: but there were more profound reasons relating to the drift of social policy (sometimes called the 'revolution in entitlements'), the role of the United States in the world, and the weakness of the Bretton Woods system of international institutions. So the old coach did make a difference.

Keynes's politics of the Middle Way in the 1920s can be interpreted in two senses. It can be seen as an expression of an Aristotelian sense of balance, with both nineteenth-century individualism and twentieth-century communism being viewed as excesses of their virtues. Or Keynes can be seen as a prophet of individualism on the defensive. The institutions of society had become like rocks which required the most skillful circumnavigation if the ship of state were not to be smashed up. There was no margin left for stupidity, silliness or obsolete ideas in government. Only the most generous and disinterested spirit, equipped with high intelligence and scientific policies, could save the social order from shipwreck.

Keynes's idea was very simple. Monetary and fiscal policy should have a single goal, jointly pursued, of maintaining a full employment level aggregate demand.