I am interested in the the 1930 essay ‘Economic Possibilities for our Grandchildren’ written by Keynes. But I don’t really understand it…
Keynes described the economic problem as people worked too hard to satisfy basic need, what does he mean with ‘work too hard’? does he mean like inefficient production? and how does it relate to the ‘great economic problem’ that deals with resource scarcity?
Plus, what are Keynes assumptions on access of wealth?
Thanks in advance 🙂
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“the struggle for subsistence” means trying to get the things you need: house, food, clothes, etc.
scarcity problem is there are not enough resources in the world to give everybody everything they want.
people work to get the goods they need or want.
technology lets us produce more useful things using less resources. E.g. a modern farm can grow several times more food per acre of land than a primitive farm. Or power tools that enable people to a lot more work per hour. Or laundry machine, which replaces two hours of hard physical labor with 10 minutes of light work.
If your essay is “Economic Possibilities for our Grandchildren”, Keynes predicts that technological progress will let people to work 15 hours a week and still enjoy a decent quality of life (by 1930’s standards). What happened in reality is that standard of living was increasing, so people still want to work 40+ hours a week to get all the stuff they associate with “decent quality of life”.
I cannot find anything about “access of wealth”. In essay, keynes seems to imply that wealth will become less important since everybody will be wealthy. That again did not happen. People feel they have enough when they have more than others.
Or you can read this overview: https://www.newyorker.com/magazine/2014/05/26/no-time
Keynes means that people are working hard to earn enough money to buy the things they need, but they don’t have enough time to enjoy life or do other things they enjoy because they are always working. The great economic problem is that there are limited resources available, so people have to compete for them. This can lead to conflict and wars.
Keynes’s assumption on access of wealth can be summarized as follows: people are rational and want to improve their standard of living; they participate in the economy by working, investing, and spending; government policy can affect economic activity; and the overall level of prices is determined by the balance of demand and supply in the economy.
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