1963-2013 - 50 years of Research for Social Change

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Back | Programme Area: Social Policy and Development (2000 - 2009)

The Restoration of "Universalism" : The Rise and Fall of Keynesian Influence on Social Development Policies (Draft)



The history of social policy in the last hundred years would be seriously incomplete without giving full account of the dramatic influence of John Maynard Keynes. He was instrumental in helping Europe recover from the Second World War of 1939-1945 – in contrast to the failures after the First World War – and in establishing the Bretton Woods institutions and the welfare state. Social development lay at the heart of his concern – in the construction of practical policies as much as in his astute handling of economic theory. He cut the ground beneath the feet of classical and neoclassical economic theorists, and the policies he recommended were found to work in practice. Certainly the early postwar years represent an acknowledged watershed in world history. If not exactly a thing of the past mass unemployment was no longer an immediate threat. Recovery and economic progress were real. Inequality had been reduced. Colonial powers were in retreat.

But by the 1970s Keynes’s steadying influence on world social development and the global market had faded. Monetarism and conservative political forces were in the ascendant. For more than three decades disciples of the free market have dismissed his ideas and successfully changed, but also shaped, the institutions of trade, communication and government as well as of the market itself. Keynes was reduced to legendary status. Neoliberal economists could safely honour the legend without adopting its substance into their advice and action. But the legacy has turned out to be larger than many had bargained for. After being relatively dormant for more than a generation Keynesian thought is suddenly alive and well. There are accumulating signs of the re-surfacing of his ideas. The legend has become a strategy-in-waiting. Keynes's internationalism and sense of planning are one thing. His universalism in constructing a socially viable economy – for decent minimal living standards and public services – is another. While pale pretences of the former certainly exist, the latter is still largely denied. In 2002, both offer solutions to some of the world’s most intractable problems.

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