Here is another extract from the same chapter as last week’s, by Fabio Petri. These weekly quotes are not necessarily meant to be ‘classic’, nor even penned by the greatest economists in the history of the subject, though sometimes this may be the case. Rather, they make a point that I could not put better myself, and are thus worth posting.
Here the author accounts for the rise of forms of Keynesian interventionism, an effective welfare state in Western Europe, and full employment policies in the US following World War Two.
“One must wait for the Great Depression of the 1930s coupled with the danger of communism to see the hold of marginal theory and policy partly shaken: Keynes candidly admitted he wanted to save capitalism from itself in order to save it from communism, and here we have a strong reason for the general acceptance of his theory in spite of the immediate wave of criticisms, not entirely unjustified, moved against it by Henderson, Hicks, Meade and others. And the beautiful book by Armstrong, Glyn and Harrison, Capitalism since 1945, convincingly shows how at the end of WW2 the fear that the working class would turn communist was the reason for the concession of the welfare state in Western Europe and for a general acceptance, in the USA too, of the interventionist Keynesian state with a duty to maintain unemployment low.”
Fabio Petri (2023), Class struggle and hired prize-fighters, in J. Eatwell, P. Commendatore and N. Salvadori (eds.), Classical Economics, Keynes and Money, Abingdon: Routledge, p.57-8.