Keynesian economics was based on the workers' 'money illusion'. The State keeps raising the rate of inflation so that real wages are lower than what workers' collective bargaining has secured. However the 'adaptive expectations' assumed by 'Okun's Law' or the 'Phillips Curve' was a myth. The Keynesian solution- price and wage controls- meant being prepared to throw Trade Union leaders in jail. This was not credible. Thus a Latin American style 'class-conflict' model of 'stagflation' contributed to the sense of malaise in the Seventies. Uncertainty increased because of what Friedman called a 'signal extraction' problem. Savers were punished, Asset strippers hugely rewarded. To continue on a Keynesian path would have meant the end of the West's prosperity. This would not have been good for the Environment because the State would rely on exports of natural resources produced by obsolete, 'dirty', methods. This is the Venezuelan model.



It must be said, the US restrictions on domestic hydrocarbon production worsened the global picture. It is a good idea for advanced countries to meet their own energy requirements because this leads to more innovation of a cleaner type.



Carbon taxes can work provided the 'income effect' on poorer people is compensated for. This is perfectly compatible with a Free Market system. Macron should have learned this lesson.



Policymakers aren't 'straitjacketed' by anything. They are corrupt and opportunistic. Professors and Journalists have been attacking 'neo-liberalism' for decades now. What good has it done? Liberalism was termed the 'L word' by Reagan. The term is associated with Ivy League, Ivory Tower, elitists.



Obama tried a 'Green New Deal' but saw that the thing was a stupid money-pit. Very sensibly, he changed course.



What is the way forward? I have long argued that instead of denouncing neo-liberalism we should focus our ire on the Nicaraguan horcrux of the neighbor's cat. That way people will understand we are genuinely crazy, not part of an obsolete, wholly careerist, availability cascade.