© 2017 James Suzman.  No content on this website can be reproduced or copied without the copyrightholder's permission

  • Facebook Social Icon
  • Twitter Social Icon

THE ECONOMIC PROBLEM

John Maynard Keynes predicted that by now advances in productivity and technology would mean that nobody worked for more than 15 hours a week. Yet despite far greater technological advances and improvements in productivity than Keynes predicted we seem to be working as hard as ever.
What went wrong?
And how might a better understanding of how hunter-gatherers made a living help us to solve this problem?

          In the winter of 1930, John Maynard Keynes was understandably preoccupied with the depression that was strangling the life out of European and American economies and the collapse of his personal fortune in the stock market crash the preceding year. Perhaps to persuade himself of the ephemeral nature of the crisis, he published an optimistic essay entitled “The Economic Possibilities for our Grandchildren.”

“My purpose in this essay . . . is not to examine the present or the near future, but to disembarrass myself of short views and take wings into the future,” explained Keynes in its introductory paragraphs.

          The future to which Keynes’s wings flew him was an economic Canaan. A promised land in which technological innovation, improvements in productivity, and long-term capital growth had ushered in an age of “economic bliss.” An era in which we are able to satisfy our material needs by working no more than fifteen hours in a week and in which we are liberated to focus on more profound joys than money and wealth accumulation. Things like art, philosophy, music, religion, and family.

          While Keynes was uncertain as to whether humanity would be able to easily adjust to a life of leisure, he was convinced that, save for war or cataclysm, this reality would come to pass in the time of his grandchildren. “I would predict,” he  wrote, “that the standard of life in progressive countries one hundred years hence will be between four and eight times as high as it is today.”

Keynes was right about improvements in technology and productivity. Nuclear power, cheap plastics, the communications and digital revolutions, and all manner of life-changing innovations bear testimony to his foresight. The U.S. Bureau of Labor Statistics tells us that labor productivity in the United States saw a fourfold increase between 1945 and 2005. But Keynes was wrong about the fifteen-hour week. While average working hours have declined from around forty hours per week in Europe and America to between thirty and thirty-five hours per week in the last fifty years, the drop has been much slower than the rise in individual productivity. Given the increases in labor productivity in the United States, the modern American worker should be able to enjoy the same standard of living as a 1950s worker on the basis of a mere eleven hours of productive effort a week.

          But Keynes was prescient about this too. He anticipated that there would be a lag between improvements in productivity and technology and its translation into fewer working hours. For him, the biggest obstacle to overcome was our instinct to work hard and to create new wealth.

“The struggle for subsistence . . . always has been hitherto the primary, most pressing problem of the human race . . . [W]e have been expressly evolved by nature—with all our impulses and deepest instincts—for the purpose of solving the economic problem,” he lamented. “. . . I think with dread of the readjustment of the habits and instincts of the ordinary man, bred into him for countless generations, which he may be asked to discard within a few decades[ .”

          “Dread” was perhaps too weak a word to use in the circumstances. Later in his essay Keynes describes “the economic problem” as no less than “the struggle for subsistence, [which] always has been . . . the primary, most pressing problem . . . not only of the human race, but of the whole of the biological kingdom from the beginnings of life in its most primitive forms .”

          Keynes’s personal fortunes would soon be restored, thanks to some savvy investments. But he was scathing about those who sought wealth for wealth’s sake. As far as he was concerned, the abandonment of avarice was key to ensuring the realization of this economic Utopia. “The love of money as a possession . . .  will be recognized for what it is,” he opined, “a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease.”

          Keynes was right to worry about this. But I suspect that if he were alive today he would accept that he was overly optimistic about our abilities to overcome it. He failed to anticipate our capacity to consume whatever new things our increased productivity enabled us to produce. He also underestimated quite how far people would go to create work when—in material terms, at least—there was none to do. But he believed economics to be a rational science, and people, on the whole, to be capable of making rational choices when presented with them. So he took the view that, save the odd aberration in the form of a few “purposeful money-makers,” we would “be able to enjoy the abundance when it comes.” Keynes was also unable to predict the environmental costs of humankind’s obsession with work or, for that matter, his own inadvertent role in ensuring the ascendance of a global economic model, focused myopically on capital growth and the ever-quickening cycle of production, consumption, and disposal that it spawned.

          Perhaps Keynes would have had a better sense of the scale of this problem—and of its genesis—had he realized that hunter-gatherers, the least economically developed of all the world’s peoples, had already found the economic promised land that he dreamed of and that the fifteen-hour working week was probably the norm for most of the estimated two-hundred-thousand-year history of biologically modern Homo sapiens.

But Keynes was a creature of his time. He could not have known something that would only be revealed some thirty years after his death. To him, the idea that primitive people with no interest whatsoever in labor productivity or capital accumulation and with only simple technologies at their disposal had already solved the “economic problem” would have seemed preposterous.