Two points for clarification:

1. As many indicated, it goes to far to say 
that the economics before Keynes was totally dominated by free-market
ideology. Toshiaki Hirai emphasizes that Cambridge economists were
deeply involved in the argument how to control the economic system,
using various policy instruments. American Institutionalists and Brain
Trusts are also good examples; these are already mentioned in previous
postings. 

2. Nevertheless the comment by Krugman shows that 
he was not totally ignorant of the existence of a different trend in the
economic thinking. 
He said that "heresies would occasionally pop up, but they were always
suppressed." Thus the discussion depends on the connotation of the
words, "dominate" or "suppress." 

Yukihiro Ikeda