Was Keynes a Corporatist? Keynes's Radical Views on Industrial Policy and Macro Policy in the 1920s

Very little has been written, at least in recent decades, about Keynes's radical rethinking of microeconomic theory and policy in the 1920s. The traditional view that Keynes was uninterested in micro theory and was content to accept then-current orthodoxy about it is profoundly mistaken.3 The main purpose of this essay is to show just how badly off-base this conventional wisdom is, at least as applied to the 1920s. In that decade Keynes decisively rejected the traditional theory of perfect competition, applauded the ongoing trend toward increased reliance on public corporations, and argued that the government should not only accept the current movement toward cartels, holding companies, trade associations, pools and other forms of monopoly power, but should proactively assist and accelerate this trend in order to regulate and control it. When Keynes heralded the death of laissez-faire in the 1920s, it was not just macroeconomic policy he had in mind. He called with equal enthusiasm for the state to adopt powerful industrial policies to regulate enterprise and industry behavior. At least in this period, Keynes was unabashedly corporatist.

  • Authors: James Crotty
  • Year: 2006
  • Organisation: University of Massachusetts
  • Publisher: n/a
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