Reply To: How was keynesianism treated post 70's?


Rothbard was referring to old Keynesianism that ruled the intellectual roost in the 1950s and 1960s. Stagflation made that version of Keynesianism unpalatable to intellectuals. So they invented sophisticated versions, New Keynesianism, Post-Keynesianism, and so on. The old orthodox Keynesianism still lives on in the textbooks. But until Paul Krugman appeared on the scene, intellectuals considered old Keynesianism fit only for undergraduates as a gateway to their more sophisticated versions. And even in the era of Krugman, the sophisticated Keynesians tend to cringe at his old Keynesianism.

Whatever the debates on arcane points of contention between them, all Keynesians agree that aggregate demand is the key to economic prosperity. Thus, their policy prescriptions are much more uniform than their explanations of why the market system fails to sustain prosperity. Politicians are never loath to accept the advice that the government must spend more to keep the economy prosperous.