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Steven writes: 
 
>>The Keynesian Revolution was seemingly fought across a  
hundred battle grounds yet was won from the very first moment  
when controversy failed to appear over the question whether  
aggregate demand had any role in macroeconomics and the  
business cycle.<<   
 
 
But in fact, the most famous of those who 'fought' Keynes and the  
Keynesian Revolution -- Friedrich Hayek -- based his whole  
argument on the fact that, "economic activity is not guided by such  
totals [i.e. macroeconomic aggregates and averages] but always  
by relations between different magnitudes".  (F. A. Hayek, "Review  
of Harrod's _Life of J. M. Keynes_". _J. of Modern History_, vol. 24,  
no.2. June, 1952).   
 
Indeed, Hayek was battling "Keynesian" economics in these terms  
even before Keynes advanced his own version of deficiency of  
aggregate demand thesis.  And, of course, it is not for no reason  
that Hayek introduced the intertemporal equilibrium construction  
into economics in 1928 -- as a means for getting some picture of  
the _relational_ valuation process across time, and as a correction  
to the misleading view produced by aggregative thinking in  
monetary / cycle economics.   
 
It is worth noting, however, that period when the real fight over  
Keynesian economics should have taken place -- and would have  
taken place -- was at a time when most economists were at war,  
and not thinking much about theoretical economics.  It took a  
couple of years for folks to recognize that Keynes' latest recasting  
of his monetary/cycle economics would be one that people took up  
as their own way of looking at things.  It wasn't in 1936  
immediately obvious the latest thing produced by Keynes was  
going to be universally accepted.  Nor indeed were folks even sure  
in 1936 that Keynes himself would not eventually supersede his  
own work once again, as he had done in the past with his work.   
When Hayek was ready to challenge Keynes in the most  
fundamental terms -- in 1940 -- most everyone wasn't paying  
attention, they were instead at work for the government or the  
military.    
 
It was hard enough for most British economists to understand a  
non-Marshallian picture of economic processes before the war,  
when many focused time and attention on fundamental issues in  
theoretical economics.  During the war -- when folks were working  
on practical problems for the government -- it is not surprising that  
most had little time or interest in doing so.  Thinking in aggregates  
of demand came naturally to British economists schooled in the  
economics of Marshall. It came less naturally to Austrian  
economists schooled in the marginalist & subjectivist economics of  
Wieser.   
 
During the war years Hayek continued his assault on aggregative  
economics -- but this time did so at the most fundamental level of  
all, thru an investigation of the explanatory strategy of all social  
sciences.  In this work Hayek introduced Schumpeter's term  
"methodological individualism" into English language discussions  
(Hayek had done so earlier in his LSE classes).  Hayek's work on  
the explanatory problems & strategies of all social theory  
dovetailed with his work on the division of knowledge and the  
signaling role of _relative_ prices.  The focus was on the individual  
plan-reviser learning in a social context of relative price changes.   
>From Hayek's Wieserian perspective, British trained economists  
taken with Keynesian macroeconomics and collectivist central  
planning failed to see the importance of the individual plan-reviser  
adjusting his or her affairs in the context of relative price changes.   
Most importantly, they failed to see the importance of relative price  
relations within the structure of capital goods across time -- and  
the significance of the individual plan-revisor learning and adapting  
within this structure.   
 
Looked at in this way, the 'fight' against Keynes took place as  
much in Hayek's famous essays "Economics & Knowledge",  
"Scientism and the Study of Society" and his "The Use of  
Knowledge in Society" as much as it did in his explicit attack on  
Keynes and Keynesian economics in his "The Pure Theory of  
Capital" and his "Review of Sir William Beveridge's _Full  
Employment in a Free Society_".   
 
The most interesting question from the point of view of the history  
of economic thought is this:  why did this fundamental attack on  
the explanatory strategy of Keynes and the Keynesians go  
unrecognized for so long? Why does it still go unrecognized? (not  
by all, but by so many)   
 
Greg Ransom 
MiraCosta College 
 
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