It was his sense of the precariousness of capitalist civilisation which drew Keynes to monetary policy. Instability in the value of money was undermi… - Robert Skidelsky

History, politics, sociology, psychology and anthropology are suggestive, not conclusive, disciplines: they cannot prove (or more importantly disprove) any hypothesis. Economics should aim to be more like them and less like physics and maths. That is why I was drawn to Keynes: he was a man of many parts. I have heard economists say he was a brilliant thinker, but a bad theorist. They objected to his 'ad hoc' theorizing - inventing bits of theory to explain unusual events, rather than building up his theory from secure micro-foundations. His wife called him 'more than an economist'. I am less than an economist, but perhaps this makes me better able to appreciate his greatness.

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 had a political objective. Unless governments took steps to stabilize market economies at full employment, much of the undoubted benefit of markets would be lost and political space would be opened up for extremists who would offer to solve the economic problem by abolishing markets, peace and liberty. This in a nutshell was the Keynesian 'political economy'. Keynes offers an immensely fruitful way of making sense of the slump now in progress, for suggesting policies to get us out of the slump, for ensuring, as far as is humanly possible, that we don't continue to fall into pits like the present one, and for understanding the human condition. These are the things which make Keynes fresh today.