The Keynesian Revolution in Context

Though the Keynesian Revolution was a revolution of theory, it was a revolution with a purpose in the real world. Its purpose was to resolve a contradiction in orthodox economics which had been exposed and brought into focus by a particular set of economic circumstances. This is not, however, to argue that Keynes had been misled into advocating egregiously reckless expedients by a ‘very exceptional and almost unique’ episode, as claimed by Hayek;1 or that it was the ‘history-bound analysis’ as pictured by H. G. Johnson.2