The paper will analyse the ideological assumptions at the core of the form of neoclassical macroeconomic theory that emerged to eclipse Keynesianism the 1970s. By revisiting some of the central papers and model such as Kydland & Prescott’s 1977 “Time Inconsistency Model”, Sargent & Wallace’s 1976 ”Policy - ineffectiveness proposition” and the microfoundations of the Lucas - critique from 1976, the paper offers a reinterpretation of the main tenets of the tradition of New Classical Macroeconomics (NCM). In policy and scholarly debates NCM has primarily been seen as a critique of government intervention in the economy. With inspiration in the framework of “social hi story of political thought” by Ellen Meiksins Wood, the paper challenges this notion and stresses that NCM is not primarily a critique of government action as such, but rather of the role of democracy and popul ar participation in economic governance. This r ereading offers new aspects to the understanding of the general relationship between neoclassical economics and neoliberal policy, and cast new light on the understanding of why neoliberal governance have generally not resulted in any substantial rollback of the state in the economy.