The post-Keynesian school is a heterodox school of economics the scope and objectives of which can be summarized as Thomas Palley (1996: 9) does when he claims that “[t] he Post Keynesian project represents both a recovery and an extension of the economic paradigm developed by Keynes” (emphasis added). Both terms, “recovery” and “extension”, require some explanation and qualification.

Recovery from the neoclassical synthesis

In the first instance, the message of the General Theory of Employment, Interest and Money (Keynes 1936) has to be “recovered” from the limiting interpretation that it was given pretty much as soon as it was published, when crucial choices were made the overall effect of which could arguably be described as the domestication and eventual dismissal of anything truly revolutionary. This is the general body of literature that has come to be known as the neoclassical synthesis and that constituted, and to an extent still does, the bulk of taught undergraduate macroeconomics. In summary, it broadly comprises the IS– LM model developed independently by several, most notably John Hicks in Britain and Alvin Hansen in the United States, combined with a supply side represented by the Phillips curve. Its most influential statement arguably comes in Paul Samuelson's textbook Economics (1948), which has had many subsequent editions since its first publication in 1948. It could be described as the most widely read and adopted textbook in the entire discipline of economics, and therefore its influence is enormous. What Samuelson wrote was an interpretation of Keynes that was not at odds with the rest of economic theory developed until then. This is why it can be described as a synthesis, in that it provides a way of reconciling the novel statement of why an economy would settle at an under-employment equilibrium in the short run only. The longer run was determined exactly as classical (and neoclassical) theory had done, however, so that the Keynesian contribution had not been one of a paradigm shift, or of a scientific revolution, but, instead, one of qualifying the overall statements, which remained classical in their method and outlook.