A book published in 1932 documented the first of two huge processes that permanently incapacitated macroeconomics. This process comprised the separation of control from ownership, whereby day-to-day decision-making for companies and corporations is undertaken, not by shareholders or stockholders, but by professional managers1.

The book is: ’The Modern Corporation and Private Property’, Adolf A Berle and Gardiner C Means.

The overall impact of ‘separation’ was to greatly increase the complexity of corporate affairs and objectives. This further invalidated the key macro assumptions that any enterprise

• is a ’single-celled profit-maximising organism’ whose actual behaviour can be ignored for policy purposes;

• can be relied upon to behave ‘rationally’ in accordance with neo-classical maxims.

However, the full impact of ’separation’ on economic and financial policy was activated only by the second huge process – WW2. This enhanced or initiated various ‘revolutions’ in (inter)national life that greatly increased the speed and complexity of economic and social affairs, and made quintessential for policy purposes the real behaviour of constituent economic systems2.

By the mid-1950s macroeconomics was technically invalid3. Hence the need for the ‘Great Debate’ that began about a decade later. Macro’s influence and power had been substantially established by this time. They continued unabated.