AMERICAN ECONOMIC ASSOCIATION when it tried to sell reverse Keynesian of inflation as a worldwide problem-that policies to meet a non-Keynesian problem. monetarism has been taken seriously by And the monetarist counter-revolution has demic and public opinion in other been cashing in on that mistake of intel- countries lectual strategy. Practical social relevance apart, the Nevertheless, on this score of social relevance. the monetarist counter-revolu- whether revolutionary or counter-revolu tion has had certain factors working in its tionary, depends on its fitting appropri favor which have enabled it to survive ately into the intellectual climate of its and prosper despite the absence of an time. Here we may apply what has al overwhelmingly obvious inadequacy of ready been said about the reasons for the the established Keynesian orthodoxy, for successful rapid propagation of the Key- most of the postwar peri he has been nesian revolution to the "as if"question that, with the growing professionalization of how to proceed to mount a quantity of economics and the expansion of aca- theory counter-revolution. There were, I demic support of interest in it, it has be- trust you will remember, five elements in be deemed scientifically interesting and and I shall take them in turm h revolution ome increasingly possible for an issue to the success of the Keynesian worthy of investigation even if the general The first was a central attack, on theo- public display visible interest in it. retically persuasive grounds, on the cen Another has been the rise of the United tral proposition of the orthodoxy of the which has made the exploration of issues tion, that proposition was the automatic of no direct relevance to the economic tendency of the economy to full employ interests of the United States nevertheless ment In the case of the counter-revolu worth pursuing as potentially matters tion, the obvious point of attack, in a of the national interest in the world econo- world characterized by high employment my. Both the hyper-inflations in Europe and inflationary tendencies, was the vul and elsewhere that followed the two world gar Keynesian orthodox position that wars, and the strong inflations that have "money does not matter. As James characterized Latin American economic Tobin has pointed out, there is a world of history, have lent themselves to investiga- difference between two alternatives to this tion with the aid of the quantity theory as proposition, namely, one, "money does matters of potential relevance to U.S. too matter, " and, two, "money is all that economic policy. But, as already men- matters. But this difference was easily tioned, while these foreign experiences and conveniently blurred, to the benefit of have provided fodder for monetarism, and the counter-revolution, by seizing on the in the course of time support for the con- extreme Keynesian position that money tention that monetarism rests on a far does not matter at all as the essence of the wider base of empirical investigation than prevailing orthodoxy. Keynesianism, the real counter-revolu- The second aspect of Keynesian success ionary thrust of monetarism has only de- was the production of an apparently new veloped since inflation became a major theory that nevertheless absorbed all that problem for the United States itself. was valid in the existing theory while so Further, it is only since that event- far as possible giving these valid concepts which, given the world importance of the confusing new names. This was the tech United States, has meant the emergence nique followed-again I would emphasize