Keynsian plenty

Keynes said we'd all be rich, and then we'd work less

Keynes’ “mistaken” prediction

In 1928, Keynes gave a talk to a group of Cambridge undergraduates on the theme, “The Economic Possibilities for our Grandchildren.” Eschewing models and data, his message was that if people were wise enough to avoid ruinous wars, those living a hundred years in the future would enjoy a standard of living four to eight times higher than those living in 1928. Here are some key passages that catch the flavor of his remarks:

We may be on the eve of improvements in the efficiency of food production as great as those which have already taken place in mining, manufacture, and transport. In quite a few years—in in our own lifetimes I mean—we may be able to perform all the operations of agriculture, mining, and manufacture with a quarter of the human effort to which we have been accustomed.

Thus for the first time since his creation man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well… .

Three-hour shifts or a fifteen-hour week … is quite enough to satisfy the old Adam in most of us!

- Ed Dolan, EconoMonitor : Review of How Much Is Enough? Why Do We Work So Much and Enjoy So Little Leisure?

We're not really that rich

"Already nearly everybody in the North Atlantic region has enough food to avoid hunger, enough clothing to stay warm, enough shelter to remain dry."

I appreciate the broader point but this is way too optimistic in the US. Only 85% of US households had food security in 2011 (defined as "access at all times to enough food for an active, healthy life for all household members.") Clothing is probably not an issue for those with shelter, but there are several million people who have at least one episode of homelessness each year. Most of these do manage to find temporary shelter (though each night tens of thousands do not and hundreds of thousands make do with horribly overcrowded and underfunded shelters). Facing the prospect of a night on the street and actually spending a night on the street are not the same thing, but we should never underestimate the impact the lack of security around these basic needs has on a broad population even if in the end something works out.

These are problems that can largely be fixed by throwing money at them, and not all that much money. The fact we haven't been willing to do so makes me despair for the much larger political and economic changes that will be required to equitably distribute the riches in our robotic, climate-changed future.

The sad thing is I don't think it's out of our technical capability: shift towards a confiscatory estate/wealth tax (e.g. 99% of amounts above $20 million), highest marginal tax rate around or above revenue maximization (at least 80% income above $2 million), start reducing work hours to split required skilled work among more people, and hugely subsidize "non-productive" work like the arts, which markets have proven very bad at rewarding. Politically of course this may prove impossible and that's a shame, but I don't feel like we're lacking in any ideas about how to deal with our rich utopian future where not everyone can equally contribute to the production that the markets value.

- Comment by dan p onBrad DeLong, Inequality on the Horizon of Need

Also see: poverty

We really are rich, but we keep working 40 hours a week because…

…because it's worth it, to get all the benefits of today's society

Robert Skidelsky is best known for his definitive three-volume biography of John Maynard Keynes. It hardly surprising, then, that he begins his latest book, How Much is Enough? (co-authored with his son, the philosopher Edward Skidelsky), with a puzzle posed by the master himself. Why is it that we work so many hours each week and enjoy so little leisure?

As the Skidelskys note, we are pretty nearly on target for the standard of living that Keynes forecast, yet, they say, he was mistaken about the amount of work. “The central puzzle remains: we in the rich world are four or five times better off on average than we were in 1930, but our average hours of work have fallen only a fifth since then.” They supported this passage with a chart showing that weekly hours worked, which, by Keynes’ estimate, should have fallen from fifty to about eighteen by now, are still stuck at forty.

The Skidelskys review three possible explanations:

First, that people take joy in their work. They find that plausible for artists, skilled artisans, and authors but not for most people.
Second, that the capitalist system forces people to work because employers, not workers, get to call the tune. They approvingly quote sociological theories supporting that view, but in the end, they do not find it entirely persuasive.
Third, that wants are insatiable. Although that sometimes seems to be the case, they think that insatiability is not a fixed feature of human nature, but a flaw of our economic system. Keynes, they say, “did not understand that capitalism would set up a new dynamic of want creation that would overwhelm traditional restraints of custom and good sense… . Capitalism has achieved incomparable progress in the creation of wealth , but has left us incapable of putting that wealth to civilized use.”

Each of these three explanations may contain a grain of truth, but it seems to me there is another, much simpler explanation: Maybe Keynes was right after all.


Resolving the puzzle

Here, then, is how I resolve the puzzle posed by Keynes’s “mistaken” prediction of a 15-hour work week:

First: Keynes was right in thinking that his grandchildren would be able to satisfy their demands for the products of agriculture, mining, and manufacturing with a 15-hour workweek. In fact, we are already doing a good deal better than that.

Second: Being able to put our enhanced capacity to create wealth to “civilized use,” as the Skidelskys put it, requires that we live under a civilized government. Regrettable though it is, we have to devote some hours of toil to pay the taxes needed to support it.

Third: In addition to working to buy the material necessities of life, we work to buy necessary services, such as education and medical care, that we cannot reasonably provide for ourselves.

Fourth: After accounting for the time spent on production of goods, paying taxes, and buying necessary services, we have, by my calculation, about eight hours out of a standard forty-hour workweek that we could realistically devote to leisure if we chose to do so. Here is what my preference would be for using those hours: Take every other Friday off and play football in the park or fool around in the kitchen trying a new recipe. Use the working Fridays to earn money to indulge in some market-mediated leisure, say, watching a professional team play your favorite sport or dining out in a good restaurant.

That is what I would call, to use Keynes’ phrase, living wisely and agreeably and well. It comes out to about 35 hours a week—and oh, guess what? That’s just our national average.

- Ed Dolan, EconoMonitor : Review of How Much Is Enough? Why Do We Work So Much and Enjoy So Little Leisure?

…because we'd rather have more and more stuff than increase our leisure time

People work very hard, and goods are scarce. In the span of the year between planting and harvest, people go hungry, because they’re waiting for the crops. If the harvest fails, people stay hungry, and they start to consume the means of their own survival
another perpetual resource for the skinny people sitting at the fireside has been the shared dream of a feast that never ends. Of an abundance that is permanent not cyclical. Of a state of being that seizes the instant when the fat of the land runs down your chin, and lets you live there forever, freed from the plough, freed from toil, freed from scarcity. The sign of these fantasies, the symbol under which skinny dreamers have stowed them down the generations, is the cornucopia, the ‘horn of plenty’.

Then something unexpected happened. We learned how to build a mechanical cornucopia. Early models were clumsy. They covered acres of ground, leaked choking black smoke, and ripped off the limbs of unwary children. Later designs, though, ran with a clean reassuring hum, and did any damage safely over the horizon — or in such small increments that it was easy to forget about it. And the world changed, for some of us. Instead of the feasts and the fasts, the good luck and the bad luck, we moved into a world where time promised improvement, where we could expect there to be mostly a little more every year: 3 per cent more, five per cent more, two per cent more. Compounded. The dream began to come true. The unlikely dream, the dream not intended to have load-bearing qualities. Over the last half-century about a billion people have moved into the dream, and hundreds of millions more are presently making the escape from our ancestral scarcity. In our time, for the first time ever in human history, plenty has become a fact.

Now we have it, though, we aren't sure we do have it. It doesn't feel the way we expected, before, that it was going to feel. People who live in scarcity and dream of plenty have a very clear idea of what plenty would be. It's what would make up the deficiencies they presently feel, what would lift the constraints that presently grip them. It is self-evident to them what 'enough' would mean. The fact that they haven't got enough enforces the definition of it. Enough is what they lack. When they look at the rich world and see that everyone (or almost everyone) in it is washed, clothed, housed and fed, they know what they are seeing. They say to themselves, if I lived there, I would rejoice and be glad that the fasting was over and the feasting was permanent; that my children could be certain of what I was never certain of. That's why they're willing to pay their savings to human traffickers, and to suffocate in freight containers.

Even in the rich world, during the earlier stages of the transition to plenty, what it would consist of seemed obvious. When Keynes wrote Economic Possibilities for Our Grandchildren in the 1930s, he looked forward to a time near at hand when, quote, 'the economic problem would be solved'. Not an economic problem, or some economic problems — the economic problem, the one singular finite problem that has existed from the beginning of economics as an endeavour, and about which it was originally so gloomy. That is, the problem of allocating scarce resources so that everyone has enough. The founding fathers shook their heads. Malthus believed that population always grew faster than the food supply. Result: famine. Ricardo believed that worker's wages could never rise higher than the bare minimum cost of breeding up the next generation of baby workers. Result: penury. So it seemed quite clear to Keynes in the Depression, working on the tools he thought could prevent all future depressions, that if a society could just provide everyone in it with a secure job, a place to live, and enough to eat, then the one big issue of economics would be dealt with. We'd have done it. We'd have solved the whole of the material part of the problem of being human. We'd have enough, so we'd be free to move on and solve other problems. And how we'd flourish.

Well, we are Keynes' grandchildren, and great-grandchildren, and great-great-grandchildren. But that isn't how it feels to us now, living in the plenty that the whole world dreamed of, and the majority of the world dreams of still. Indeed, it's far easier to recognise from the outside that plenty is what we do possess, because our everyday experience amid the cornucopia's spilling fruits, is certainly not that the striving is over, that the 'economic problem' is solved, that the material issues of human life are dealt with. On the contrary: we are still running as hard as we can, with apparently undiminished urgency, and our desires still feel to us as if they are thwarted and fulfilled in the proportions you'd expect from a resistant universe.

Somehow we'd believed that achieving plenty would mean getting wants and needs disentangled. The whole idea of having enough depends on being able to tell the difference. Those in the past who took a utopian look forward to plenty tended to imagine, just like Keynes, that there was a common-sense contrast of feeling involved in the difference between wanting and needing; and so moving from one to the other, from the era of needing a bowl of soup to the era of wanting a Rolex, would be signalled by a change of mood, a kind of relaxation of urgency, or, to put it at its most positive, by the birth of a new kind of human freedom. Marx, for instance, who was as besotted by the runaway productivity of industrial technology as any enthusiast for the New Economy during the internet bubble, thought that when the engines of plenty were running for everybody's benefit, we'd be free to start discovering what human beings were actually like, what our nature might be with the leg-irons of need no longer hobbling us. No longer needing to scrabble for our daily bread, we'd gaze at the world of things with a playful, impartial curiosity; we'd gaze at other people and know for the first time with absolute clarity that they weren't things, since we didn't have to treat them as things anymore to assure our own survival.

The trouble with this vision (and the others like it) is that it's incompatible with the recipe by which our plenty came. We don't know how many recipes for a cornucopia there are; we only know which have worked and which have failed among those that we have tried. Our local one is made harder to state because of some people's insistence that markets are its only ingredient, when laws and institutions are just as important. But at the heart of it is a decision to produce what people will pay for, and only what people will pay for, without enquiring further into why. Our cornucopia deliberately makes no distinction between things we want and things we need; it can't, without beginning to ration the tumbling flow of goods and to make unplentiful decisions about our best interests. Where need becomes want is left to our private judgement, at least in theory. All we can consult is the blurred continuum in our heads with soup at one end and the diamond-studded Rolex at the other. But the other peculiarity of our plenty is that, driven by desire without distinction, it doesn't include a way of stably stopping when an elegant sufficiency has been achieved for everyone. It's an economy of insatiability. It has to grow to function. It cannot aim at any particular level of prosperity. It can only achieve any particular tideline of plenty by overshooting it, and keeping on going. And if we all did decide, one at a time or all together, on some mark that represented adequate plenty, and stopped buying at it, our plenty wouldn't glide calmly to a halt. It would collapse, because the system depends on competition, and whatever ceases to compete in our system doesn't just stop rising, it immediately and inexorably sinks.

The classical economists, the dismal scientists who said that scarcity would last forever, believed in 'diminishing marginal utility', the traditional view that as your appetite for something is satisfied, you want each extra helping of it a bit less. A hungry person really, really wants a slice of toast. The second slice is nice but not quite so nice; they can take or leave the third slice, and they probably do leave the fourth one. This, our age of plenty has supplemented. Okay, we say reluctantly. You've probably had enough toast for now — enough multigrain granary toast with unsalted organic Normandy farmhouse butter — but that doesn't mean there's nothing else you want, does it? Just alternate your hungers, and you can keep craving all the time. Go on, turn away from toast for now, turn away with undiminished urgency to that wish for polkadotted silk handkerchiefs, for tango lessons, for Art Deco ornaments. You know you want to.
Of course the problems of having too much are far better than the problems of having too little, but no wonder we feel bilious. No wonder we feel confused. No wonder that some of us balloon into obesity on the cornucopian diet, and some of us starve ourselves, and some find artificial ways of bringing scarcity back. The little roasted pigs rush by, squeaking 'Eat me!'. I'm sorry, we say: maybe later. I feel a bit… full. I feel a bit… sick.

- Francis Spufford, Plenty

…because it serves the interests of the ruling class

In the year 1930, John Maynard Keynes predicted that technology would have advanced sufficiently by century’s end that countries like Great Britain or the United States would achieve a 15-hour work week. There’s every reason to believe he was right. In technological terms, we are quite capable of this. And yet it didn’t happen. Instead, technology has been marshaled, if anything, to figure out ways to make us all work more. In order to achieve this, jobs have had to be created that are, effectively, pointless. Huge swathes of people, in Europe and North America in particular, spend their entire working lives performing tasks they secretly believe do not really need to be performed. The moral and spiritual damage that comes from this situation is profound. It is a scar across our collective soul. Yet virtually no one talks about it.

Why did Keynes’ promised utopia – still being eagerly awaited in the ‘60s – never materialise? The standard line today is that he didn’t figure in the massive increase in consumerism. Given the choice between less hours and more toys and pleasures, we’ve collectively chosen the latter. This presents a nice morality tale, but even a moment’s reflection shows it can’t really be true. Yes, we have witnessed the creation of an endless variety of new jobs and industries since the ‘20s, but very few have anything to do with the production and distribution of sushi, iPhones, or fancy sneakers.


It’s as if someone were out there making up pointless jobs just for the sake of keeping us all working. And here, precisely, lies the mystery. In capitalism, this is exactly what is not supposed to happen. Sure, in the old inefficient socialist states like the Soviet Union, where employment was considered both a right and a sacred duty, the system made up as many jobs as they had to (this is why in Soviet department stores it took three clerks to sell a piece of meat). But, of course, this is the very sort of problem market competition is supposed to fix. According to economic theory, at least, the last thing a profit-seeking firm is going to do is shell out money to workers they don’t really need to employ. Still, somehow, it happens.

While corporations may engage in ruthless downsizing, the layoffs and speed-ups invariably fall on that class of people who are actually making, moving, fixing and maintaining things; through some strange alchemy no one can quite explain, the number of salaried paper-pushers ultimately seems to expand, and more and more employees find themselves, not unlike Soviet workers actually, working 40 or even 50 hour weeks on paper, but effectively working 15 hours just as Keynes predicted, since the rest of their time is spent organising or attending motivational seminars, updating their facebook profiles or downloading TV box-sets.

The answer clearly isn’t economic: it’s moral and political. The ruling class has figured out that a happy and productive population with free time on their hands is a mortal danger (think of what started to happen when this even began to be approximated in the ‘60s). And, on the other hand, the feeling that work is a moral value in itself, and that anyone not willing to submit themselves to some kind of intense work discipline for most of their waking hours deserves nothing, is extraordinarily convenient for them.


There is a whole class of salaried professionals that, should you meet them at parties and admit that you do something that might be considered interesting (an anthropologist, for example), will want to avoid even discussing their line of work entirely. Give them a few drinks, and they will launch into tirades about how pointless and stupid their job really is.

This is a profound psychological violence here. How can one even begin to speak of dignity in labour when one secretly feels one’s job should not exist? How can it not create a sense of deep rage and resentment. Yet it is the peculiar genius of our society that its rulers have figured out a way, as in the case of the fish-fryers, to ensure that rage is directed precisely against those who actually do get to do meaningful work. For instance: in our society, there seems a general rule that, the more obviously one’s work benefits other people, the less one is likely to be paid for it. Again, an objective measure is hard to find, but one easy way to get a sense is to ask: what would happen were this entire class of people to simply disappear? Say what you like about nurses, garbage collectors, or mechanics, it’s obvious that were they to vanish in a puff of smoke, the results would be immediate and catastrophic. A world without teachers or dock-workers would soon be in trouble, and even one without science fiction writers or ska musicians would clearly be a lesser place. It’s not entirely clear how humanity would suffer were all private equity CEOs, lobbyists, PR researchers, actuaries, telemarketers, bailiffs or legal consultants to similarly vanish. (Many suspect it might markedly improve.) Yet apart from a handful of well-touted exceptions (doctors), the rule holds surprisingly well.

Even more perverse, there seems to be a broad sense that this is the way things should be. This is one of the secret strengths of right-wing populism. You can see it when tabloids whip up resentment against tube workers for paralysing London during contract disputes: the very fact that tube workers can paralyse London shows that their work is actually necessary, but this seems to be precisely what annoys people. It’s even clearer in the US, where Republicans have had remarkable success mobilizing resentment against school teachers, or auto workers (and not, significantly, against the school administrators or auto industry managers who actually cause the problems) for their supposedly bloated wages and benefits. It’s as if they are being told “but you get to teach children! Or make cars! You get to have real jobs! And on top of that you have the nerve to also expect middle-class pensions and health care?”

If someone had designed a work regime perfectly suited to maintaining the power of finance capital, it’s hard to see how they could have done a better job. Real, productive workers are relentlessly squeezed and exploited. The remainder are divided between a terrorised stratum of the – universally reviled – unemployed and a larger stratum who are basically paid to do nothing, in positions designed to make them identify with the perspectives and sensibilities of the ruling class (managers, administrators, etc) – and particularly its financial avatars – but, at the same time, foster a simmering resentment against anyone whose work has clear and undeniable social value. Clearly, the system was never consciously designed. It emerged from almost a century of trial and error. But it is the only explanation for why, despite our technological capacities, we are not all working 3-4 hour days.

- David Graeber, On the Phenomenon of Bullshit Jobs - STRIKE!

….because we're not satisfied with "enough," we're rather outwork and outspend our peers

The three-hour workday….remains elusive….

So where did Keynes go wrong? Two answers immediately spring to mind — one noble, and one less so. The noble answer is that we rather like some kinds of work. We enjoy spending time with our colleagues, intellectual stimulation or the feeling of a job well done. The ignoble answer is that we work hard because there is no end to our desire to outspend each other.

Keynes considered both of these possibilities, but perhaps he did not take them seriously enough. He would not have been able to anticipate more recent research suggesting that the experience of being unemployed is miserable out of all proportion to its direct effect on income.

Perhaps Keynes also failed to appreciate that there is more to keeping up with the Joneses than conspicuous consumption. We want to live in pleasant areas with good schools and easy access to dynamic employers. As a result, we find ourselves in ferocious competition for a limited supply of desirable houses.


A few years ago, the economists Mark Aguiar and Erik Hurst published a survey of how American work and leisure had evolved between 1965 and 2005. Both men and women had more leisure time — although nothing like as much as Keynes had expected. But some people defied this trend. The best educated and the highest earners, both men and women, had less free time than ever. Starting in the mid 1980s, this elite began to drop everything and work ­furiously.

Perhaps the real story, then, is that we are trying to keep up not with the Joneses but with our work colleagues. By pulling the longest hours and taking the least leave, we climb the corporate ladder. It may be no coincidence that the collapse in leisure time began in the 1980s, at a time when inequality at the top of that ladder was surging.

- Tim Harford, The rewards for working hard are too big for Keynes’s vision -

What links here?

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License