AMERICAN ECONOMIC ASSOCIATION and socially relevant, and the advance- much more optimistic view of the resil- ment of a new empirical relationship chal- ience of capitalism. The corollary of the lenging for econometricians to estimate. Keynesian view of the primacy of the un The very success of the Keynesian rev- employment problem has been a pro- olution, however, ensured that it would in nounced tendency to play down the ad its turn become the established orthodoxy, verse economic consequences of infation, and as such be as vulnerable as the old to and to assume that if only the unemploy revolutionary attack--which would neces- ment consequences of anti-inflationary sarily have to be a counter-revolutionary policies were properly understood, society attack. Keynes himself, as Leijonhufvud's would cheerfully agree to adopt and im monumental reinterpretation his plement an incomes policy instead thought [9] has reminded us, had a sea- A second factor in the transformation soned and subtle mind, conscious both of of Keynesianism into an orthodoxy has the flow of economic history and of the been that people who made their aca role of theory as an adjunct to policy- demic reputations and earned their pre making in a given set of historical circum- sent status on the basis of an early and stances. His followers--which means the enthusiastic conversion to Keynesianism profession at large- elaborated hishis- in the late 1930, s and early 1940s have tory- bound analysis into a timeless and continued to trade on their foresight, to spaceless set of universal principles, sac- the academic detriment of their juniors, rificing in the process much of his sub- who have never had the same chance to tlety, and so established Keynesianism as jump onto the front-and not the rear- an orthodoxy ripe for counter-attack of an academic bandwagon. This factor al factors in this trans- has been far more effective in paving the aerification worthy of note. The first, way for a monetarist counter-revolution robably most important, has been in the United States, where institutional the conviction of Keynesians that the competition prevents centralized control mass unemployment of the 1930's repre- of professional advancement, than in the sents the normal state of capitalist society United Kingdom, where Oxbridge contin -more accurately of capitalist society ues to dominate the academic scene. unaided by Keynesian management-and A third factor has been that, while the that unemployment is always the most Keynesian revolution in its time offered a urgent social problem. This view was ele- tremendous liberation to the energies of vated into a dogma in the United States young economists in the fields of pure under the leadership of Alvin Hansen, theorizing about concepts, the construc- whose theory of secular stagnation was tion of macroeconomic general-equilib he subject of his Presidential Address to rium models, and the estimation of eco- this Association [6]. While that theory nometric models of the economy, these ac- has been quietly forgotten, or frugal tivities have run into diminishing returns converted into a theory applicable to the so rapidly that they have ceased to be underdeveloped countries, vestiges of it appealing to young and ambitious econo- linger on in the thinking of American mists Keynesians. The view that unemployment The result has been that--beginning is the overriding social problem also ling- perhaps sometime in the mid-1950s- ers on among British Keynesians such as Keynesianism has become itself an estab- Joan Robinson, Roy Harrod, and Thomas lished orthodoxy, ripe for attack in ex Balogh, though I should note that Nicho- actly the same way as what Keynes chose las Kaldor has for many years taken a to call"classical economics" and to attack