The author surveys shifts in macro-economic policy and thought from Keynes and Kalecki to the present, tracking the changing climate of economic opinion. As Kalecki foresaw, the success of Keynesian demand management was undermined when, in an era of full employment, the power of labour threatened industrialists’ authority over the economy. From the 1970s, this led governments to introduce pro-capitalist measures. Countering recessions with budget deficits was now seen as irresponsible. The rise of globalisation meant that domestic demand management became less effective, especially in economies highly dependent on imports. Opening up economies meant that their exchange rates and stock markets became more vulnerable to capital flights. As the reach of finance became increasingly global, those private credit rating agencies became the game changers. Today private credit agencies, through their rating of the investment climate and sovereign risk of a country, in effect rate the quality of its government. Capitalist democracies are now dominated by private finance. Management of the investment climate is increasingly done through the virtual rather than the real economy, creating artificial financial asset and housing market bubbles. At the same time, in the neglected real economy, inequality and unemployment have increased, and living standards are falling.