Wednesday, September 11, 2013

J.M. Keynes On The Prospects For Our Grandchildren

In 1930, at Keynes argued that we would have solved the problem of scarcity for our grandchildren The economy would grow to the point where there would be enough economic output to provide for the basic needs of everyone.  Humanity would then have enough leisure to enjoy the non-material advantages that were only available to the well-to-do in his age.  Economic growth was driven by greed and the desire to accumulate wealth.  It was important that nothing was done to interfere with that motivation until the entrepreneur had created enough wealth that it could be more widely shared.  Keynes also indicated some the steps that would be necessary to achieve that result.

Keynes was right about our ability to create enough output to satisfy the basic needs of our citizens.  He was wrong, however, about how that output would be distributed.  He was also wrong about the desire to accumulate wealth even when it was not possible to consume much of the income that it produced.  He was also wrong about our ability to avoid war and some of other things that would enable our grandchildren to enjoy life as he envisioned it.

I posted this overview of Keynes's vision for our grandchildren to show that we have solved the problem of scarcity in many ways.  Keynes was correct about the prospects for economic growth.  He was wrong, however, about how our wealth would be used, and how we would take advantage of the opportunity for leisure. There are reasons to believe that Keynes would have supported the idea of steady state economy as long enough output was created to satisfy our basic needs and our culture adapted properly to the opportunities that were made available to enjoy many of the finer things in life that did not require the consumption of material output.

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