What shall we do with those people deprived of work by wealth and technology…?
HOW TO FILL the days, hours and minutes? It’s now seven decades since John Maynard Keynes peered into the future and declared that, one day, trying to scratch a living would cease being “the permanent problem of mankind.”
On the contrary, the moustachioed baron said in 1930; the problem ahead was that people would have too much leisure, too much free time, and not enough to do.
Keynes was bang on of course, as ever. His vision, detailed in Economic Possibilities for Our Grandchildren, has in fact come to pass 30 years early, despite those very wars and conflicts he thought would impair it. By 2030, and “for the first time since his creation” Keynes wrote, “man will be faced with his real…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.”
And lo!
“Shoppers on a North Tyneside high street [in the UK] could be forgiven for thinking that a new business has moved into an empty retail unit in the town,” says the local council.
“The vacant Select store in Whitley Road, Whitley Bay is the first [empty shop] to benefit with a design treatment that gives the impression of a high quality delicatessen…”
Yes, the United Kingdom – seat of the industrial revolution – is now so advanced, so highly developed, it doesn’t even need real shops anymore.
Welcome to the Potemkin High Street. The mere illusion of commerce will do. How’s that for a Keynesian possibility…?
“The economic climate has forced many businesses to bring down the shutters. We need to ensure that…our high streets look attractive to both shoppers and potential business investors,” says Judith Wallace, the town council’s deputy mayor. “The colourful graphic designs – which can feature a whole range of different shop types – are either taped inside the windows or screwed to the fascia so they can be removed and re-used as required,” gushes the council on its jolly little website.
Whitley Road’s fake-shop was just one of 60 announcements North Tyneside’s government press team have put out in the last four weeks. Three press releases per day might seem a bit much for the local population of 191,000. But you’ve got to keep people busy, right? Otherwise, “Must we not expect a general ‘nervous breakdown’?” as Keynes asked back in 1930.
“We already have a little experience of what I mean – a nervous breakdown of the sort which is already common enough in England and the United States amongst the wives of the well-to do classes – unfortunate women, many of them…who cannot find it sufficiently amusing, when deprived of the spur of economic necessity, to cook and clean and mend, yet are quite unable to find anything more amusing.”
Just how has mankind (and his bored, unfortunate wife) attained this evolutionary step change three decades ahead of schedule? Besides assembly-line production and labor-saving devices, Keynes thought the lower orders would be “deprived of their traditional tasks and occupation by their wealth.” But not quite. Hardly the wealthiest people in Britain today, even the long-term unemployed enjoy “conveniences, comforts, and amenities beyond the compass of the richest and most powerful monarchs of other ages” (as Keynes once wrote of London’s upper-classes on the eve of WWI). Yet it is other people’s wealth, not their own – plus two billion low-cost workers quitting communism since 1989, of course – that has freed what used to be called Britain’s “working class” from work.
As in the West Midlands, cradle of the industrial revolution and thus another early entrant to Keynes’ brave “Post Employment” future, unemployment amongst the north-east’s ex-coal-mining population has risen to 9.8% according to the latest official data. Yet a further one-in-four people of working age on Tyneside has opted out of the jobs market entirely. Whether through choice or not (national data says only 7% of the eight million souls deemed economically inactive have taken early retirement), the welfare state – built in Keynes’ name after the Great Depression led to a second Great War – promises to feed, clothe and house people, whatever comes. So it’s little wonder that, according to one analysis, more than two-thirds of north-east England’s economy came from state spending last year, up from 59% in 2004. Nationwide, the total jobless figure has now risen to 27%, just below the historic peaks of the mid-80s, but only because the public-sector payroll has risen by 950,000 since the current administration came to power a little over a decade ago. Take away those jobs, and the horrific worklessness of 25 years ago would be back, but without the hope of falling inflation and interest rates, plus de-regulation and broadening free trade, to reduce it.
“If the gross domestic product of the entire world were distributed evenly, each of the world’s inhabitants would have more than enough to bring everyone out of poverty,” notes Nobel-winning Joseph Stiglitz, writing one of several essays recently published to commemorate and examine Keynes’ Economic Possibilities. The reason so many of us are working more hours than ever before, he guesses, is that financial rewards have been spread out unevenly. “Keynes ignored distributional issues, and failed to appreciate the extent to which global inequity would increase in the second half of the twentieth century,” as a review in the Times Literary Supplement puts it.
But what Keynes’ economic model didn’t miss, however – or at least, what the constant intervention built on his theories guarantees until the money runs out – is the chance to nip here and give away there…putting up a shop-front of busy-busy bees, just like Whitley Road’s fake delicatessen.
- “Unemployment in the UK has fallen for the third month running,” says the Financial Times of the January statistics, “but the workforce shrank sharply as young people took refuge in education instead of seeking jobs…”
- “A package of tax breaks and highway spending cleared the US Congress Wednesday,” says Reuters, “the first of what Democrats hope will be several efforts to bring down the 9.7% unemployment rate…”
- “Demand for labor has been falling steadily for decades as higher productivity has eviscerated the job count in agriculture and manufacturing,” says Edward Hadas at BreakingViews. “Leisure, healthcare and other service industries have taken up some of the job slack…but the ageing population will not necessarily change this overall trend very much.”
A keen eugenicist, Keynes once shocked his upper-class chums by demanding assisted suicide for bond holders…the “euthanasia of the rentier” in his phrase…so that taxes didn’t go on repayments, and savings could be more wisely spent by clever chaps such as himself.
How long before some new wit, faced with the economic impossibility of the West’s post-work society, suggests the same for the lower orders instead…?
Adrian Ash
for Money Morning Australia
Adrian Ash is head of research at www.BullionVault.com
{ 10 comments… read them below or add one }
Ah yes, Mr Keynes, one of the most misguided and destructive dickheads of the last century.
I am glad you have accurately described how the wonderful leisure hours we were expecting have actually turned out… longer working hours for the employed to pay for a mountain of civil servants and other parasites living on welfare. Falling standards of living can be expected as we start to pay off the crushing debt that Govts are borrowing us into, and ever-endless security scares like the War on Terror, the War on Drugs, the War on SARs and whatever else they dream up to keep us taxed to death and employ even more parasites.
I’d say Keynes ruined the world for a century and a half, which is what it will take before the Austrian free-market view of economics and the place of the State once again replaces his stupid idea that the State can run everything.
Good on you, KP. An excellent summing up of the situation.
K-K-KEYNE…………KEYNES of fools
I think this is a poor article. Keynes was an intellectual giant who pioneered economics at a time when it was quite new and mis-understood.
In any field of endeavour you can’t expect the early workers to solve every problem, only create the groundwork for the next lot of thinkers, in much the same way that Newton paved the way for Einstein.
Newton was wrong in his laws on relativity, but correct enough to earn the enduring respect of following generations of scientists.
It is so easy to criticise, but Keynes will be well remembered long after the know nothings who write articles like this have been long forgotten.
PF – Maybe. I would not bet on it, though. By the time we, and fiat money, are finished with one another, Keynes might not rank much higher in the esteem of the new world than, say, Hitler does today, in ours.
cb – why do you say that?
Keynes is the popular whipping boy with the debt theorists at the moment, but they generally don’t know what he wrote or said.
There are a lot of popular misconceptions on Keynes. He was an accountant after all, not an economists, they didn’t exist then.
I don’t think he was able to give us a concise recipe for all future situations, but they followed his advice in the Marshall plan after WW2 to stop another war following, and the maligned QE taking place right now is close to Keynsian thought, and it is working much to the disgust of bears.
Remember he lived in a time well before the complex financial world of today, and couldn’t possibly find solutions for problems that he could not enviseage.
It is up to later economists and economic philosophers to take his work to the next stage, and frankly they really haven’t made the contribution that Keynes did. His book after WW1 (1919 – pub 1920) on the Economic consequence of the peace was groundbreaking.
We don’t expect physicists from 1920 to launch rockets to the moon today, but our knowledge still owes something to that era. No-noe denigrates Einstein because Qantam physicists have taken his work to another level.
I think your Hitler quip was most inappropriate. I am appallled by that.
Sorry PF, it might have been an over the top analogy, so I am happy to rephrase. By the time we are finished with all the QE, and all the debt based government stimuli are revealed to be the ruin of entire national economies, rightly or wrongly, Keynes’s name could well be mud.
I should clarify that I am not making a judgement on the man or even on his ideas, which I must profess ignorance over. I am merely pointing out that all the mad experimentation that is being done by today’s mad bankers and politicians is widely regarded to be done on Keynesian principles, and therefore it would seem reasonable to expect that he will be the chief scapegoat when all the mad experimentation ends in so many disasters.
Which, as you suggest, will probably be most unfair, since not all of his ideas are being implemented by those working in his name. One example comes readily to mind: He apparently held that governments should save up during the good times, and then spend the savings to stimulate the economy out of downturns, which is quite a different thing from what is happening today, with governments indebting the people forever through senseless and unprecedented levels of borrowings only to squander and misallocated those monies through all sorts of mad scemes and scams. And not only the legitimately borrowed money, but also the so-called “free” money they print up out of thin air through their so-called QE programs.
To sum up, I am no economist, but much of what is being done today seems contrary to prudent and sensible economic principles, and we have reasons to be worried about how it all will turn out. And even though what is being done is clearly rotten, rigged and corrupt, and in complete disregard of important aspects of Keynes’s theory, he will probably be discredited if, and when, all this mad experimentation, corruption and thievery end in disaster.
cb – its clearly not Keynes that it is to blame, its people such as PF, Adam Carr, Alan Kohler, Chris Joye, Rory Robetson, Craig James, Mr and Mrs Smith + 90% of the population that instinctively think spending Goverment money is a good way to generate economic growth.
They misuse Keynes to justify this. Like PF said Keynes was just looking at the basics, for people to still rely on his ideas is just plain simplistic. Yes he provided some important fundamentals, but he has been embraced as his ideas and poltiically popular (i.e. “I like POliticians X because he is at least trying”)…face it guys, stimulation policies sound better than ‘creating destruction’
sorry – I meant “Creative Destruction” – the process by which recessions destroy bad investments and allow for the most productive entereprises to survive, thus increasing the overall efficiency of the economy.
I love the idea, but it goes down like you are suggesting slavery be brought back
PuntPal – Indeed, it is so. Unfortunately, in a corrupt environment, many a great idea goes down like a lead balloon because it is contrary to the thievery of the oligarchy, the free loading ruling classes of leeches and parasites. And, as already intimated, I am happy to grant you that blaming Keynes may be largely unfair. However, since his ideas are what seem to grant theoretical legitimacy of what the miscreants are more than happy to do, he will be as sure to be abused by distorted history when things go sour, as he is being used and misused while the madness lasts.