An Analysis of Keynes’s Prediction of our Future. (Term Paper Sample)

An Analysis of Keynes’s Prediction of our Future. John Maynard Keynes was an early 20th century economist, who perhaps is most renowned for becoming ‘the father of Keynesian economics’ when attempting to understand the plethora of intricacies behind the Great Depression. However, Keynes (1930) is arguably as popular for the various, controversial predictions that he made in his essay “Economic Possibilities for our Grandchildren”, some of which include mankind managing to solve its “economic problem”, a normal working week being no more than 15 hours, and finally the accumulation of wealth being at such a level, that it no longer becomes the primary focus to keep getting richer. The following essay will discuss the extent to which these predictions came true, with articles by Joseph Stiglitz (2008), and David Autor (2015) supporting any conclusions that are brought about. Before deciding whether mankind has indeed solved its “economic problem”, it is vital to address that Keynes’s definition of our “economic problem”, varies slightly from ”the great economic problem”. “The great economic problem” is how we, as a society, decide to make use of our finite resources, in order to meet our infinite needs. However, Keynes (1930) defined our “economic problem” as the minimum levels of food, income, shelter etc, needed for subsistence. As a society, we are on track to solving “the economic problem”. If the 48$ trillion GDP was divided equally among the earth's 6.5 billion inhabitants, everyone would receive roughly 7,000$ each, which is more than enough to combat basic poverty (Stiglitz,2008). Despite that, the reality of the situation differs greatly from the theory behind it. Not every individual has the basic education to understand how to use their limited budget to maximize their standard of living, and some resources would become so finite, that their worth would increase, and they would become unaffordable for many (Keynes, 1930). Moreover, Keynes predicted that we will have a 15 hour working week, where work will be equally divided among the population, and will only be done in order to “satisfy the Old Adam in most of us” (Keynes, 1930). Therefore, it can be concluded immediately that Keynes’s view of work is dissimilar to the one that we have in the modern world. He viewed it as labour, stemming primarily from manual tasks, necessary to meet our primitive demands, whereas now it is defined more as either physical or manual efforts completed in order to achieve a result-income. From 1974 till 2004, the average amount of hours worked in the USA actually increased from 24 to 25, showcasing that leisure is not a goal that people want to achieve, but it is still rather that to have more wealth and tangible objects than others (Stiglitz, 2008). Keynes deeply undermined the psychological aspects of working; specifically, how most individuals wish to do different tasks than their peers, and how wages and wealth translate to more goods being produced, and economies growing, rather than people making time for their hobbies. Finally, Keynes (1930), argued that with the help of technological advancements, and people shifting their virtues and morales, a point will be reached when the accumulation of capital will no longer be of social importance. Again, it must be noted that although in certain industries workers may be reduced, overall, human capital will be at the core of long term investments and various highly skilled jobs, so technology will simply lead to a shift in the working trends of the population (Autor,2015). Therefore, workers will begin to work in more specialized sectors, earning higher wages and hence not only putting more pressure on accumulating wealth-as they aim to be superior to their colleagues, but also ...