Many European countries have long practiced something resembling social democracy: but they have forgotten how to preach it. Social democrats today are defensive and apologetic. Critics who claim that the European model is too expensive or economically inefficient have been allowed to pass unchallenged. And yet, the welfare state is as popular as ever with its beneficiaries: nowhere in Europe is there a constituency for abolishing public health services, ending free or subsidized education, or reducing public provision of transport and other essential services.

I want to challenge conventional wisdom on both sides of the Atlantic. To be sure, the target has softened considerably. In the early years of this century, the "Washington consensus" held the field. Everywhere you went there was an economist or "expert" expounding the virtues of deregulation, the minimal state, and low taxation. Anything, it seemed, that the public sector could do, private individuals could do better.

The Washington doctrine was everywhere greeted by ideological cheerleaders: from the profiteers of the "Irish miracle" (the property-bubble boom of the "Celtic Tiger") to the doctrinaire ultra-capitalists of former Communist Europe. Even "old Europeans" were swept up in the wake. The EU's free- market project (the so-called "Lisbon agenda"); the enthusiastic privatization plans of the French and German governments: all bore witness to what its French critics described as the new " pensée unique."

Today there has been a partial awakening. To avert national bankruptcies and wholesale banking collapse, governments and central bankers have performed remarkable policy reversals, liberally dispersing public money in pursuit of economic stability and taking failed companies into public control without a second thought. A striking number of free-market economists, worshipers at the feet of Milton Friedman and his Chicago colleagues, have lined up to don sackcloth and ashes and swear allegiance to the memory of John Maynard Keynes.

This is all very gratifying. But it hardly constitutes an intellectual revolution. Quite the contrary: as the response of the Obama administration suggests, the reversion to Keynesian economics is but a tactical retreat.