John Maynard Keynes’s “Economic Possibilities for our Grandchildren” was first published in The Nation and Athenæum in two parts, October 11 and 18, 1930 (it is reprinted in his Essays in Persuasion). In it, Keynes tries to put to one side the contemporary fluctuations and uncertainty in the world economy at that time, and take a very long view, one hundred years hence. He notes, with the aid of those examples of the application of compound interest of the sort we teach to schoolchildren, that were the rates of technological change and, in turn, personal income growth to continue at the pace begun with the Industrial Revolution, per capita income would rise to such heights that, in terms of the needs of a basic, decent standard of living, the “economic problem” would be solved: “I would predict that the standard of life in progressive countries one hundred years hence will be between four and eight times as high as it is to-day” (in fact per capita income in the US in 2022 was about six times as high as in 1922, in constant dollars, so his prediction was a very good one).
The economic possibilities for Keynes’s (metaphorical – he never actually had any) grandchildren were bright. The question is: what would people choose to do with these possibilities? A disheartening possibility, and one that we know is chosen by at least some people, is to continue the pursuit of money, possessions, and hierarchical status, far beyond the needs of a good and secure life. Keynes hoped that we would know better: “The love of money as a possession – as distinguished from the love of money as a means to the enjoyments and realities of life – will be recognized for what it is, 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.”
Another possibility is that we would give ourselves time away from the workplace, where even a fifteen-hour work week would only exist to fulfill our felt need to do some paid work:
For many ages to come the old Adam will be so strong in us that everybody will need to do some work if he is to be contented. We shall do more things for ourselves than is usual with the rich to-day, only too glad to have small duties and tasks and routines [Keynes himself was not afraid of getting his hands dirty at his small farm in Sussex – MR]. But beyond this, we shall endeavour to spread the bread thin on the butter – to make what work there is still to be done to be as widely shared as possible. Three-hour shifts or a fifteen-hour week may put off the problem for a great while. For three hours a day is quite enough to satisfy the old Adam in most of us!
Over the span of one hundred years our working hours falling by two-thirds with our hourly productivity rising six-fold would still leave us twice as well off in terms of earned income, and with much more time to enjoy it. But we all know this drastic shortening of the work week never happened.
Why is that? Economic analysis would suggest that the typical workweek would be a function of two factors: the nature of work, in particular how hourly productivity is affected by the number of hours worked per week, and employee preferences over work hours, with employees either unwilling to accept, or requiring a premium in the hourly wage to accept, hours that are contrary to the preferred amount. If hourly productivity is barely affected by the standard workweek, employers have an incentive to cater to the preferences of employees (they will get a better selection of job applicants, and not have to pay a wage premium). So, if hourly wages have increased dramatically over one hundred years, but the average workweek has only slightly fallen (in 1930, the year of the “Grandchildren” essay, the average workweek in the US had already fallen to 50 hours – it now sits between 38 and 40 hours), it must be either because of something in the nature of productivity, or in employee preferences.
It is true that some occupations require a minimum number of hours per week; one could not function as a corporate lawyer working five hours per week, it is simply the nature of the work that long hours are required. Claudia Goldin suggests that a primary explanation for the gender wage gap is professions with little flexibility over the number, or the timing, of hours per week, and this is especially difficult for women with carer responsibilities in the home. Professions where hourly productivity is not affected by the number of hours worked per week – she suggests pharmacy is an example – have near gender wage parity. But how many jobs are like corporate law? It is easy to imagine an academic working a half-time position, or a schoolteacher (classes could have different teachers in the morning and in the afternoon), restaurant work, hair stylists, construction workers, cab drivers, and on and on, with no real change in productivity based on hours worked per week.
That turns our attention to employee preferences: perhaps many people (not all) want to work thirty-eight hours per week, and if offered a chance to work fewer hours would not take it, even if all important material needs are well taken care of. And here we come to Keynes’s greatest concern: people will not want all that leisure time, because they will not have the capacity to fully enjoy it. Not in a material sense, but in a psychological one:
To those who sweat for their daily bread, leisure is a longed-for sweet – until they get it. …
[F]or the first time since his creation man will be faced with his real, his permanent 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.
The strenuous purposeful money-makers may carry all of us along with them into the lap of economic abundance. But 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.
People will need to learn the good that is in a life of contemplation of art and nature, the pursuit of knowledge, and creative activity whether at the piano or the easel or in the garden. They will need to adjust their worldview to accommodate the new freedom, which begins with understanding its value in the first place. This view of Keynes’s represented his long-held beliefs; if you find all this interesting I recommend his essay “My Early Beliefs“.
On July 12, 1945, John Maynard Keynes gave a broadcast talk on the formation of the Arts Council of Great Britain:
In the early days of the war, when all sources of comfort to our spirits were at a low ebb, there came into existence, with the aid of the Pilgrim Trust, a body officially styled the “Council for the Encouragement of Music and the Arts”, but commonly known from its initial letters as C.E.M.A. It was the task of C.E.M.A. to carry music, drama and pictures to places which otherwise would be cut off from all contact with the masterpieces of happier days and times; to air raid shelters, to war-time hostels, to factories, to mining villages. E.N.S.A. was charged with the entertainment of the Services; the British Council kept contact with other countries overseas; the duty of C.E.M.A. was to maintain the opportunities of artistic performance for the hard-pressed and often exiled civilians.
With experience our ambitions and our scope increased. I should explain that whilst C.E.M.A. was started by private aid, the time soon came when it was sponsored by a Treasury grant. We were never given much money, but by care and good housekeeping we made it go a long way. At the start our aim was to replace what war had taken away; but we soon found that we were providing what had never existed even in peace time. That is why one of the last acts of the Coalition Government was to decide that C.E.M.A. with a new name and wider opportunities should be continued into time of peace. Henceforward we are to be a permanent body, independent in constitution, free from red tape, but financed by the Treasury and ultimately responsible to Parliament, which will have to be satisfied with what we are doing when from time to time it votes us money. If we behave foolishly any Member of Parliament will be able to question the Chancellor of the Exchequer and ask why. Our name is to be the Arts Council of Great Britain. I hope you will call us the Arts Council for short, and not try to turn our initials into a false, invented word. We have carefully selected initials which we believe are unpronounceable.
He did not survive to see the transformation of the ACGB into ACE. But he did oversee the creation of the model for arm’s-length public arts councils, and to bring art to different corners of his country for no purpose other than the pleasure it brings.
Why write about this now? A new novel by Martin Riker, The Guest Lecture, imagines the dreamings of someone about to give a guest lecture on Keynes’s “Grandchildren” essay. As it happens, I have given a guest lecture in which I talked about this essay, so I can hardly resist the novel.
My weekend reading, will report back…
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