>The stagflation of the 1970s seriously attacked the very foundation of Keynes ideas. It was literally impossible for it to happen
How so? Most of his ideas seem pretty valid. The 70s stagflation was set off by the oil shock when oil prices rapidly increased four fold. I'm not sure how his failure to analyse that happening after his death invalidates that his ideas worked ok under normal circumstances?
And the oil shock was sort of a one time thing, and can't be viewed in isolation of Nixon having to close the gold window, more specifically how the US took advantage of the previous fixing of the US dollar price of gold before that fell apart (https://en.wikipedia.org/wiki/1973_oil_crisis#End_of_the_Bre...).
In other words, these were discontinuous and unique things, or turn it around, was it an oil shock, or a dollar devaluation shock? Nothing obliged OPEC to accept less and less value in the dollars they price their oil in.
You could go further and say that the relaxation of these Federal government interventions, including the price and distribution controls on oil and distillates in the '70s, it was pretty much a command economy until Reagan dismantled it, has better allowed the market to function.
(Not that the government has stopped manipulating the money supply, interest rates, etc. ... although that got rather out of control by the end of the '70s as well, with double digit annual inflation and > 20% prime rates to fix that.)
I still have a job seeing what Phillips proposing a relationship between inflation and unemployment in 1958 has to do with Keynes theories of insufficient aggregate demand causing deflation in the 1930s. Keynes's ideas seem pretty good and still relevant, and Phillips' ideas a bit dubious and largely unrelated.
I get the impression much criticism of Keynes is better directed at his followers who called themselves Keynesians and came up with various nonsense after his death than at Keynes himself.
Well, it's just a start, the most (in)famous policy adopted by people who called themselves Keynesian, even got it written into law if I remember correctly, that failed so badly no one can deny the failure. And let's be careful with No True Keynesian arguments....
Plus, unless I'm grossly misinformed, Keynes theories went a lot further than that claimed insight about aggregate demand and deflation, but I haven't studied him deeply, since when I last looked in the '80s it seemed to be garbage, and nothing I've heard since then changes the opinion I formed.
How so? Most of his ideas seem pretty valid. The 70s stagflation was set off by the oil shock when oil prices rapidly increased four fold. I'm not sure how his failure to analyse that happening after his death invalidates that his ideas worked ok under normal circumstances?