When President Richard Nixon declared: “We are all Keynesians now,” in 1971, he could hardly have been wider of the mark. The 1970s saw the start of the revolt against economic orthodoxy that had prevailed since the 1930s, when John Maynard Keynes provided the intellectual firepower for the fight against the Great Depression.

That revolt, carried through energetically by Margaret Thatcher and Ronald Reagan in the 1980s, endured until recently. Adam Smith and Milton Friedman were up, Keynes was down. Few politicians would have dared to argue that increased government intervention in markets, nationalisation or Keynesian pump-priming were the solution to economic ills.

The financial crisis has changed all that. Keynes, Britain’s most distinguished economist of the 20th century, is back. The bank rescues of the past few days, including Britain’s £37 billion of taxpayers’ money poured into Royal Bank of Scotland, HBOS and Lloyds TSB, followed his principle that there are times when governments have to step in, using unorthodox means, to save capitalism from itself.

There is talk of a new Bretton Woods, the 1944 conference in New Hampshire that established a basis for the international monetary system in the postwar era. Keynes, as Britain’s representative, bestrode that conference like a colossus. Keynesianism is also back in what governments are planning to do to lessen the impact of the recession. Although he did not invent Roosevelt’s “new deal”, or similar programmes in Germany and elsewhere, he provided their intellectual underpinning. When normal levers do not work – famously Keynes likened interest rate cuts to “pushing on a string” – other measures are needed.

Better, he suggested only half-jokingly, for the Treasury “to fill old bottles with bank-notes, bury them at suitable depths in disused coalmines . . . and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again”, than let millions of men stand idle for lack of work.

Gordon Brown and Alistair Darling are not planning to fill old bottles but next month’s pre-budget report will see the chancellor announcing a “reprioritisation” of the government’s capital spending programme. The more spending that can be brought forward to next year, when the economy looks likely to be mired in recession, the more it may be possible to mitigate the financial effects, particularly in the hard-hit construction industry.

It is easier said than done. Capital spending is slow moving. Many projects involve private finance, which is in short supply. The planning and tendering process for new schemes takes 18-24 months. The criticism of Keynesian counter-cyclical spending, that by the time it kicks in the moment has passed, still applies. Nonetheless, there are things that can be done. The programme to modernise schools could be accelerated. No harm would be done by bringing forward Olympic spending, with the potential for cutting costs because conditions in the building industry are so slack.

When politicians invoke Keynes, they should remember what he stood for. Yesterday Mr Brown attacked “unbridled free markets” and while he may enjoy his newly discovered mission to save the world he should remember that there are, and should be, limits to the state’s power.

As Paul Krugman, the Nobel prizewinning economist, puts it in a new introduction to the General Theory: “Keynes was no socialist – he came to save capitalism, not to bury it.” Ministers should remind themselves of that.