Funding the Future Did the 1970s really kill Keynes?
Nov 11, 2025
The discussion dives into the causes of 1970s stagflation, revealing it stemmed from external shocks rather than Keynesian failures. Richard Murphy highlights how oil price spikes and government panic worsened economic conditions. He critiques the rise of monetarism and explains Keynes's insights on fiscal coordination. The podcast argues that misinterpreting economic pressures today could repeat past mistakes, ultimately advocating for a politics of care and equitable distribution instead of austerity.
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Stagflation Was Shock Driven
- Richard Murphy argues 1970s stagflation was driven by external shocks, not Keynesian failure.
- Governments panicked and applied austerity, worsening recession instead of addressing supply shocks.
Oil Shocks And Union Responses
- Murphy recalls the 1973 and 1979 oil shocks that quadrupled energy costs and imported inflation.
- He notes unions pressed for wage protection and governments responded with contractionary policy.
Monetary System Shift Caused Confusion
- The 1971 end of the gold standard changed monetary relationships and created unfamiliar floating currencies.
- Politicians misunderstood floating exchange risks and tried to defend overvalued currencies, harming workers.