Despite the unnecessarily triumphalist subtitle, Skidelsky’s volume is unquestionably the most important contribution to economic debate since Lehman folded, and it should be read by policy makers, bankers, regulators, and the wider public. All will appreciate its embrace of history and ordinary language — Keynesian traits that subtly but powerfully reduce economics to its rightful place, not as a branch of applied maths but “as a moral, not natural, science”.

While this sounds terribly lofty, it doesn’t stop the author from serving up a taut account of what went wrong in 2008, and unlike other accounts Skidelsky searches for the underlying ideas along the lines of Keynes’ note in his 1936 General Theory, that “practical men, who believe themselves to be quite exempt from intellectual influences, are usually the slaves of some defunct economist”. If the 1930s saw a dreadful slump compounded by the last gasp of Victorian, classical economics, the post-war era of Bretton Woods witnessed the heyday of Keynesianism. The 1970s killed it stone dead and what followed led to light-touch regulation, efficient market economics, complex securitisation products and the basis for last year’s Great Crash.

But you have to read this book to appreciate that not only do we have Keynes, but Skidelsky. The narrative is steeped in a lifetime’s learning, yet reads like an essay. When Goldman Sachs boss Lloyd Blankfein is quoted summarising the 20th century as an era of unregulated dynamism justifying securitisation and derivatives, Skidelsky makes the point that the Keynesian ‘golden age’ of 1951–1973 exhibited superior growth and much greater stability than the Washington Consensus era that followed it, and without the complex financial engineering of recent years. The still broader point is that Keynes only saw wealth creation in terms of the ‘good life’: “And a good life was not what made people better off: it was what made them good. To make the world ethically better was the only justifiable purpose of economic striving.” Of course, Skidelsky continues, except for religious groups very few people would even recognise this definition of the good life.

Except that a growing band of people do recognise it, including David Boyle and Andrew Simms, both of The New Economics Foundation. They want to break the still orthodox view that economic growth and happiness are the same thing, and perhaps not surprisingly delve into other predecessors and contemporaries of Keynes, such as John Ruskin, Hilaire Belloc, GK Chesterton and EF Schumacher, the author of Small is Beautiful. However, the book is not a work of history but a compilation of intelligent answers to snappily asked questions such as ‘Money: Why did China Pay for the Iraq War?’, and ‘Measurement: Why Did an Apparently Poor Pacific Island Hit the Top of the Happy Planet Index?’ As well as ranging up and down mountainous landscapes of public policy, economic insights and alternative foundations and community models, the book exudes the immense satisfaction of being proven right by history. “The American model of economics has failed as finally and spectacularly as the Soviet model did in 1989,” claim the authors. It’s not obvious that Keynes would have been quite so triumphal were he alive today, but beyond such details it’s clear that books such as this one are driving us towards a very different conception of economics than the one we’re used to.