Ramsay MacDonald christened it an 'economic blizzard', suggesting that the world slump of 1929-32 was an Act of God which his hapless Labour Government could not be expected to have foreseen or averted, much less mastered. John Maynard Keynes, by contrast, reached for a mechanical metaphor appropriate to the current state of the art. 'We have magneto trouble,' he wrote in December 1930. 'How, then, can we start up again?' Keynesian policies, at the time and subsequently, were presented as a magic toolkit which could not only patch up the machine but, with fine tuning, keep it running smoothly so as to develop maximum horsepower. In the enlightened post-war world, nearly everyone swore by the magic toolkit: then, faced with an old-fashioned breakdown, they swore at it.

LRB 6 November 1986 | PDF Download