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Raising Keynes: An old economist finds new rock-star status

Keynesian economics is being hailed as key to ending the collapse.

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John Maynard Keynes (right) met with US Treasury official Harry Dexter White in 1946.

AFP/Getty/Newscom

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If economics were about boxing, the classic bout of modern times would have Milton Friedman in one corner and John Maynard Keynes in the other.

Recent rounds have been dominated by Mr. Friedman, the New York-born champion of free markets, but his opponent, an English university don with a penchant for the arts, has recently staged a dramatic comeback.

Few seem to be cheering anymore for unregulated capitalism. From the forthcoming Obama administration to the British government, “Keynesian” economics is now widely invoked as key to saving the world from a new great depression.

For admirers of Mr. Keynes, whose radical idea was that governments could avoid recessions by running deficits, the economist’s resurgence is a vindication after decades in the shadow of Friedman’s followers, including Ronald Reagan and Margaret Thatcher.

More than 60 years after Keynes’s death, his nephew smiles at the revival of his uncle’s ideas.

“He was never altogether out of fashion,” says Stephen Keynes, an octogenarian scion of one of Britain’s most famous families and, like his uncle, a direct descendant of Charles Darwin. “It’s just that certain people have associated his name with inflation, which was not what he advocated.”

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