In late 1930, as the Depression closed in around Great Britain and the US, the economist John Maynard Keynes published an essay imagining a future of abundance and leisure. The essay, titled Economic Possibilities for our Grandchildren begins by acknowledging the current troubles and the “attack of economic pessimism” they have engendered, but suggests that they are just the “growing-pains of over-rapid changes”. Keynes would spend much of the next decade intensively working to overcome these growing pains — so much so that his name would become synonymous with the idea that governments could alleviate economic downturns by stimulating demand. But in this essay, he asks his readers to briefly “take wings into the future” and envision the economy 100 years on.
He begins by taking an even longer view, back into the past. From the dawn of recorded history, he says, up until the beginning of the modern era in, say, 1600, there was no great economic progress. Some generations may have experienced better harvests and extended periods of peace, others famine, plague, and war, so that some times were perhaps 50 or even 100 percent better than others, but there was no ongoing secular trend of growth like that we have come to expect. At some point in the distant past, he speculates, there must have been some period of progress similar to our own that brought all the gifts of civilization — language, fire, domesticated animals and grain, the plough, the wheel, clay pots, and metalworking. All these we had by the beginning of recorded history, and even iron by 1000 BC. After that, no discernible economic progress until the great explosion of growth that began in the 1600s.
We know now that is is not quite true that there was no economic or technical progress in the centuries before Europe’s industrial revolution began. Even in Europe, which endured half a millennium of warlordism after the fall of the Roman Empire, technological change continued, albeit slowly. Indeed Europe’s scientific revolution was born in part of medieval technological advancements in glass making and clockwork, which enabled new kinds of measurements to be made. And advancements in medicine, mathematics, shipbuilding, and astronomy continued in the intact civilizations in other parts of the world during this time, although these impinged on Europe very little, save through a few scholars bringing knowledge from the East.
Nevertheless, it is true that some kind of infection point was reached in Europe around the 16th or 17th century that triggered rapid, self-reinforcing growth in economic output and technological development unlike anything that preceded it. The cause of this growth, Keynes suggests, was the power of capital accumulation by compound investment, triggered by the influx of gold and silver from the Americas into Europe. Capital invested at a 3 percent rate of return grows 1000-fold in 250 years, and Keynes estimates that this led — despite a large increase in the British population — to a fourfold increase in per capita standards of living over that time.
Now project this rate of accumulation into the future and — barring great wars and calamities and huge increases in population — per capita wealth in 100 years might be 4 or 8 times higher still, he speculates. And even this could be an underestimate, if technological progress continues as it has. “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,” he suggests. At this time the chief source of power in British agriculture was still the horse.
At some point on the horizon, Keynes concludes, with this continued growth, we will reach the point — unprecedented in human history —where humanity will have solved what he calls its “economic problem”. Heretofore all human history, indeed the history of all animal life, has been devoted to meeting its needs for sustenance. While he acknowledges that humans do appear to have “needs” that are relative, in that they grow as we see that others around us have more, he suggests that, whatever the scope of our absolute needs, with the economy growing exponentially, at some point in the not too distant future, we shall have met them. We shall have enough. And then, he says, humanity will have to face its real, permanent problem: how to occupy its time.
Here the essay turns both expansive and sardonic, as he describes with “dread” the “general nervous breakdown” he expects to accompany the challenge of adjusting to leisure after millennia of struggle. He speaks of the depressing outlook offered by the “disastrous” experience of contemporary wealthy classes, “our advance guard spying out the promised land for the rest of us”, though he suspects that “with a little more experience” we can do better. He projects that “for many ages to come” we will try to adjust by “spreading the bread thin on the butter,” sharing what little work there is to be done as widely as possible. But ultimately, he says, “it will be those peoples, who can keep alive and cultivate into a fuller perfection, the art of life itself, and do not sell themselves for the means of life, who will be able to enjoy the abundance when it comes.”
When I taught this essay in my Econ 100 class — part of our module on growth — I would first ask my students whether they thought Keynes’s predictions on growth had come true. In fact, 80-some years into his 100 year projection window, he is right on the nose, despite the intervening World War. British GDP per capita grew a little over five-fold between 1930 and 2016. In the US, the increase is about five and a half times.
Then I would ask whether his predictions on the social implications of this growth had come true. Were we indeed facing the dreadful problem of trying to figure out how to occupy our time now that we no longer had to work to provide for ourselves? When my students laughed and shook their heads, I would ask if they expected it to happen, ever in their lifetimes. Did they think they were going to come to terms with not having to work to support themselves?
Most of them did not. They suggested various reasons for this: people will always keep wanting more. The distribution of income will not allow everyone to have enough. Even if it were possible to provide the necessities to everyone, society would suffer without the profit motive, and so on. Very few of them could imagine a future in which this might actually happen.
Keynes evidently took these predictions quite seriously, and devoted much of his own free time to supporting the arts. Along with fellow Bloomsbury group members, he founded a cooperative organization to support artists and kept its books for many years while working for the British Treasury. He was a supporter of theaters and opera houses throughout his life, and later co-founded the Arts Council of Great Britain and managed to secure funding for it in the immediate aftermath of the Second World War.
But beyond the need to cultivate the arts and public engagement with the arts, he teases out a further implication of the end of scarcity that must be confronted: a change to our public morals. We will be able to question the purpose of economic growth and profit seeking, and we will have a chance to reconsider and to reconcile the ugly split in European/American culture between our deepest ethical intuitions and the public values we’ve accepted for their economic expediency.
“All kinds of social customs and economic practices, affecting the distribution of wealth and of economic rewards and penalties, which we now maintain at all costs, however distasteful and unjust they may be in themselves, because they are tremendously useful in promoting the accumulation of capital, we shall then be free, at last, to discard,” he says, free “to return to some of the most sure and certain principles of religion and traditional virtue — that avarice is a vice, that the exaction of usury is a misdemeanour, and the love of money is detestable.”
We have accepted a public code of morality at odds with what we expect in our private lives, teach to our children, and strive to nurture in our congregations and communities. The entire “science” of economics profession rests on the premise that human beings base their choices solely on a cold, rational evaluation of their own self interest, a notion that we all know to be false, as well as repugnant. Our biggest public crises — political corruption, climate change denial, prison profiteering, the opioid epidemic — are all driven by our “greed is good” economy, self interest run amok.
We have accepted this reversal of morality pragmatically, Keynes says, pretended, “to ourselves and to every one that fair is foul and foul is fair; for foul is useful and fair is not.” But this situation will not last forever. If greed has been good, or at least useful, for its function in driving economic growth and capital accumulation, at some point it will have done its job. We will have enough. Once we have reached — and recognized — this threshold, once we see that our glorification of self interest has accomplished what it is for, we shall be able to rethink the underpinnings of a society organized around delivering growth. Eighty-nine years ago, Keynes thought this threshold might be reached one hundred years hence.
Surely this is in fact happening now in the world’s so-called “wealthy” societies: we have whole classes of people whose labor we do not need, who we are supporting — poorly, and with a profound lack of dignity — in insecure housing, with low quality food, sporadic health care, and whatever consumer goods they are able to obtain, at a tremendous social cost. Simultaneously we suffer from crises of abundance: obesity causes far more deaths worldwide than starvation. And we are rapidly undercutting the environmental foundations of our wealth through the sheer size of the human impact on the planet, a problem we have not been able to figure out how to address by redirecting greed through clever policy design. We do have enough to — grudgingly — meet everyone’s absolute needs, but we have not yet begun seriously to reorient our views about how to organize efficiently a society of abundance.
It will be hard to unhook from growth. The growth imperative is deeply embedded in our culture, our fears, and our institutions. At the individual level, in our you’re-on-your-own society, growth has become the only security. We’ve been told we must save and save and save in order to safeguard against age, illness, and accident. A typical retirement calculator now indicates that a 40 year-old couple making the median US household income should aim to save around $1.5 million by the time they retire. Being a millionaire used to be a symbol of spectacular wealth. Now it’s what each household is expected to accomplish in order to be secure? Meanwhile nearly half of US households don’t have enough saved to cover an unexpected car repair or a broken bone, and thus are locked out of security altogether.
Our economy, too, is dependent on growth. Companies base investment decisions on growth expectations. When growth falls, layoffs ensue. Governments don’t collect enough tax revenue to cover expenses. And at the core of the economy, our money system is based on lending, on loans that are made in the expectation that growth will allow them to be paid back, with interest. We must have enough growth to cover most of these loans, on average. When too many fail at once, we have financial crisis.
As far as I know, Keynes did not foresee that we would have another, urgent reason for abandoning endless growth. In his age, with agriculture still unmechanized and oil barely beginning to be exploited, it must have been hard to imagine that we were only a few doublings away from becoming large enough to reshape the planet. Nor did he foresee perhaps how dependent we would become on growth, or that — in large part inspired by his work — we would begin anxiously measuring it, and fretting when it dips a few decimal points below our expectations.
But the questions he raises are still a good route in to this thorny problem of our age: What is growth for? When do we have enough and need to grow no more? What becomes of all our growth-promoting institutions and attitudes when we no longer need to grow? And what new possibilities open up for us as human beings when we can turn our attention and our hearts to other things?