I felt compelled today to revisit Keynes’ classic “The Economic Possibilities for Our Grandchildren.”

I link to the Marxists.org version because a) I spotted a shocking number of Marxian overlaps I didn’t know about, and b) it was widely accessible, the Marxians ironically overcoming paywalls and better (accidentally?) understand the nonrivalrousness of information, thus how printed words, digitally replicable and in existence for over almost a century ago cannot possible be “private,” nor “property.”

My remarks grew so extensive that I split them across a few parts — I also ended up reading Elizabeth Kolbert’s “No Time” essay for The New Yorker, reflecting on these same themes

It’s all the same conversation these days: the ownership obsession meets the AI/infinite-generation conversation (#1550071, #1449095, #1467035) so the major question this century-old speech and subsequent article pose for us is why on Earth are we working so much**?**

There are sociological explanations, economic ones, taxation, money, and just plain-old jealousy: “it is true that the needs of human beings may seem to be insatiable,” Keynes writes, before he outlines the two classes of goods.

I think most people miss this aspect of his article, just focusing on the first one of absolute needs, or the pretty trite prediction of future economic growth (see next part). The absolute ones — food, shelter, the bare minimum for existence that man has always striven for — is “the” economic problem that promoters of Keynes essay suppose modern-day capitalism has or has not “solved.”

Keynes is pretty optimistic here; dreamy, we might say. He projects outward a standard of living between 4 and 8 times the one his audience was accustomed to in the 1920s and (pre-Depression) 1930s. (He’s roughly correct on the magnitudes, to the extent that that’s reasonably measurable. More below.)

But then he turns to the more interesting class of goods: the relative stature of things, the goods that have hierarchy, those

…which are relative in the sense that we feel them only if their satisfaction lifts us above, makes us feel superior to, our fellows. Needs of the second class, those which satisfy the desire for superiority, may indeed be insatiable; for the higher the general level, the higher still are they.”

Hedonic treadmill, keeping up with the Joneses.  

That’s a nice car you have, have you seen your neighbor’s Tesla? Cool vacation you went on, but have you been to the Galapagos?! There’s always some filthy rich mafia don with a tackier yacht than yours, to paraphrase Jordan Peterson’s memorable line in his fourth rule (“Compare Yourself To Who You Were Yesterday, Not Who Someone Else is Today”)

Here’s Kolbert’s summary:

Keynes assumed that people work in order to earn enough to buy what they need. And so, he reasoned, as incomes rose, those needs could be fulfilled in ever fewer hours. Workers would knock off earlier and earlier, until eventually they’d be going home by lunchtime.

if we have become, in aggregate, as rich as Keynes imagined, this wealth has not translated into leisure. (When was the last time someone you know complained about having too little to do?) In terms of economic theory, this is puzzling. In terms of everyday life, it’s enough to, well, induce a nervous breakdown.

Things didn’t turn out that way. While working hours have gradually fallen ever since, their sustained decline has stagnated and leveled out at around six hours per working day in Britain and seven in the US.

Appropriate observation by Kolbert. Burnett, a time use researcher at University of North Dakota, “has concluded that keeping up with the Joneses now means trying to outschedule them.”

Global real GDP per capita has increased roughly 3.5x since 1929, though measures like price indices (CPI, GDP deflator) or GDP itself are pretty crap over that long time horizon.

Plus, economic life is massively different in the 2020s compared to the 1920s: electricity, communication, internet, availability and cost of long-distance trade, global division of labor, fossil fuels and combustion engines, safe commercial airlines, working hours, life expectancy, child mortality, etc etc. Most of those things don't neatly go into a price-adjustable spreadsheet.

Same-old, same-old technological obsolescence and anxiety

Keynes opens the essay with

We are suffering just now from a bad attack of economic pessimism. It is common to hear people say that the epoch of enormous economic progress which characterised the nineteenth century is over; that the rapid improvement in the standard of life is now going to slow down

For the moment the very rapidity of these changes is hurting us and bringing difficult problems to solve. Those countries are suffering relatively which are not in the vanguard of progress. We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come – namely, technological unemployment. This means unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.

Quite the opening. If the word “nineteenth” wasn’t in there, and the flowy, outdated language be such a give-aways, this could have been written by an observant economist in 2026. We could re-hash it for the 21st century, the step-change technological revolutions from the past century – electricity, internal combustion engines, safe commercial air traffic, internet, etc – have slowed down. We dreamt of flying cars but we got 140 characters on Twitter.

We'll return to those themes after a brief detour into the Marxian economics/accumulation-only stuff in the essay