In the light of recent market volatility, this essay asks: is Keynes dead or alive? The broad conclusion is that while macroeconomic models are still used, very little survives of Keynes’s original theory. 'New Keynesians' have replaced his key concept of radical uncertainty by models of imperfect information and 'sticky prices'. These can be used to justify policy interventions, but they attract only a minority of economists. By contrast, Keynesian policy is much more alive, and most monetary authorities and Treasuries are prepared to counter potential output gaps. This is for political rather than for theoretical reasons. A worrying gap, therefore, exists between economic theory and economic policy. At the same time Keynes remains alive in unexpected places and ways: notably in developing countries (though he never addressed development issues) and through occasional, less theoretical writings like his Economic Possibilities for Our Grandchildren. His reflections on the link between economics and ethics are important for our day, and his actual life remains exemplary.

For most of the twentieth century, pessimism about, and hostility to, markets was prevalent and this pulled in an anti-globalist direction. Indeed, the global institutions set up in 1944 were constructed by two market pessimists, John Maynard Keynes, on whom this article concentrates, and Harry Dexter White. The main shift in thinking in our own day has been towards a renewal of the market optimism of the nineteenth century, providing the necessary intellectual condition for the emergence of globalisation as a policy project. Anti-globalism has switched from poor to rich countries. Globalisation offers the best hope for poor countries to catch up with the rich. But growth has become less important for rich countries which could probably abandon the globalist project without much damage to their material standards, and with possible gain to their quality of life. And they may be tempted to do so if the political costs of maintaining a global economy become too high. The implications of such a shift are profound. But Keynes would at least demand that we start thinking about them.