In recent years, the belief in the self-regulating capacity of satisfactorily functioning markets has increased, at least at the level of policy-making. This is expressed by the privatization and deregulation movement and is accompanied by a clear tendency to return to pre-Keynesian neoclassical equilibrium theory. The textbook by Barro (1984) is but one important indication of this. The success of the ‘rational expectations school’ and the rise of neo-Austrian ‘disequilibrium theory’ are other indicators of the tendency to take up pre-Keynesian strands of thought; this is reinforced by political factors: the recent breakdown of centrally planned socialism seems to hail the ultimate triumph of liberalism. Finally, it is particularly sad that, in most countries, the parties of the centre and even social democratic parties have abandoned the venerable Keynesian full employment goal and now aim at a ‘satisfactory’ level of employment.

Some economists might not agree with this bleak view of things. Alan Blinder suggests that, after a period of decline, Keynesian economics is rising again (Blinder 1988). There is also Kuttner's The End of Laissez-Faire which praises ‘the explanatory power of Keynesian economics’ (Kuttner 1991, p. 3) and makes highly interesting proposals for shaping the post Cold War world along Keynesian lines. While such developments must be welcomed, they do not affect the basic line of argument set out in this study. Keynes is too much anchored in the neoclassical world (he accepted the first neoclassical postulate and made use of the marginal efficiency of capital) to be able to provide a complete alternative to neoclassical theory on his own.