Keynesianism and U.S. Economic Transformation

Institutional Challenges, Policy Limits, and Global Interdependence

Abstract

This paper offers a historically grounded reinterpretation of Keynesianism within the context of U.S. economic development and global capitalist transformation. It traces the evolution of Keynes’s core insights into a form of structural Keynesianism, shaped by institutionalism, post-Keynesian and new Keynesian economics, and broader heterodox traditions, while engaging critically with monetarism, rational expectations, supply-side economics, and computational macroeconomics. This evolution unfolded through successive global-scale crises amid accelerating technological change and the rising concentration of economic power. The paper argues that these dynamics facilitated rent-seeking, regulatory capture, and elite entrenchment, undermining democratic governance and exacerbating inequalities in income, wealth, and labor power. By synthesizing institutional, geopolitical, and macroeconomic analyses, the paper advances structural Keynesianism as an essential framework for understanding advanced economies increasingly characterized by financialization, market concentration, globalization, and shifting geopolitical constraints, and for rethinking economic governance beyond demand management toward institutional reform and democratic accountability.