Great nations must forsake the treasure

However, this strategy fell out of favour after its perceived failure in the Asian financial crisis of 1997. Thereafter, Asian countries, particularly China, redoubled their mercantilist efforts. Since then we've entered an upside down world with capital flowing from poor nations such as China to rich ones.

As Japan and Europe stagnated, and the Chinese cranked up their trade surpluses, the Americans were forced to cut interest rates to avoid recession, and the Chinese funded the spending by buying American bonds at negligible rates of return.

And so, as the Asian export machine amasses treasure, the stage is gradually being set for the kind of stagnation evident in Europe today. It may take decades to bite, cloaked as it will be by the burgeoning growth of the developed world. But there is another way.

Like Keynes, we can all hope to see the great nations of the world once again embrace their enlightened self-interest, forsake their trade surpluses and treasure chests and embrace instead greater prosperity for their own people and those of other lands.