John Maynard Keynes: Economic Possibilities of Our Grandchildren

John Maynard Keynes: Economic Possibilities of Our Grandchildren

Karl Widerquist looks at John Maynard Keynes’s essay

This is it—this is the twenty-first century future about which we have read amazing predictions all of our lives. Our present is characterized by something none of us would have predicted: we are working more not less. Juliet Schor recognized the trend in her 1991 book The Overworked American; Janet C. Gornick discussed its effects on families in the Summer 2005 issue of Dissent. But the best minds of the mid-twentieth century had predicted that technological change would free us from work.

John Maynard Keynes, the most influential economist of the twentieth century, published his forecast, “Economic Possibilities for Our Grandchildren,” in 1930, when the world was in the grip of the Great Depression. He posited that the depression would not signal the end of the industrial revolution as some feared at the time, but would prove to be a minor dip in the trend of gradual but substantial increases in productivity, wealth, and average living standards. He guessed that average living standards in Europe and the United States were four times greater in 1930 than they had been two hundred and fifty years earlier and that they would be four to eight times greater a hundred years hence. Despite depression, war, and the failure of much of the world to catch up, he was right: average real income in the United States is more than five times greater today than in 1930 and twenty times greater than three centuries ago.

However, the central claim of Keynes’s essay failed to come true, even though it rested on logic as simple as one plus one equals two: The little work that needed to be done would be spread out among the population in portions of perhaps fifteen hours per week, because “everybody needs to do some work if he is to be contented.” Keynes spent a large part of the essay discussing the promise and difficulty of adjusting to life when we are freed from the struggle for subsistence, but this prospect sounds as much like the distant future to us today as it did to readers in 1930. Perhaps it seems even more distant now that we have seventy-five more years of experience showing that exponential economic growth can fail to complete the change that Keynes noticed had “already begun” in 1930.

This prediction is not so much an error as a puzzle: how can the one plus one so correctly predicted by Keynes have failed to equal two? He identified four factors that were capable of slowing the pace toward economic bliss: uncontrolled population growth, war, arrested technological development, and reduced investment. All of these factors could slow the rate of economic growth, but growth was not the problem. It didn’t seem logical to people in 1930 that the economy could continue to grow without freeing us from the struggle for survival.

Keynes was right in predicting that economic growth could free society from the constant struggle for survival, but he was wrong in predicting that it would