The painful financial crisis has challenged the economic orthodoxies of all developed country governments. Long-cherished beliefs in balanced budgets have been abandoned. In Europe the stability and growth pact has vanished from view. British prime minister Gordon Brown’s golden rule has been melted down and sold with the family silver.

But an even bigger challenge has been posed to the political projects of western governments of the centre left and centre right. In the economic sphere they can look back to Keynes for intellectual underpinning of the new fiscal realism forced upon them. Politically, explaining the new role of the state is more difficult. Where should the government intervene and how? Public ownership may be unavoidable in the short term, but what is the endgame? Are present conditions an aberration, or will we need to contemplate a new social contract between the state and the markets for the long term? In the UK, are we witnessing the death throes of Thatcher-Blairism, and if so what rough beast slouches toward Westminster to be born?