The "Keynesian Revolution" in Economic Policy-making.

This article focuses on the Keynesian Revolution after the publication of the book "The Collected Writings of John Maynard Keynes," which deals with the employment policy of the government of Great Britain during the Second World War. Thus, it will be argued that great care must be taken in using the term "Keynesian", and that the rather contradictory proposals of the 1944 Employment Policy White Paper should not be seen as a faithful reflection of the furthest extent Keynes was prepared to go to preserve employment without inflation. General unemployment could be avoided by measures to control aggregate demand: open market operations; contracyclical public works; support to consumption through changes in hire-purchase terms, tax reduction, consumer credits, and extensions of the social services. During depressions, the budget would be imbalanced and the debt increased, but this could be counteracted by a capital levy or an annual wealth tax. Whatever the British Treasury may have thought about Keynesian employment policy in theory, the terms of reference of the Steering Committee required them to propose ways of controlling the various categories of aggregate demand. Since Keynes was not intimately involved in discussions of employment policy, he was not forced to resolve the inconsistencies in his thoughts on the budget nor to make a definite stand on policy in the third post-war phase.