MAJOR economic crises tend to provoke reconsideration of the principles of capitalism and of the economic lives we lead. So it was that back in the teeth of another recession, in 1930, John Maynard Keynes struck a defiantly optimistic note in a short essay entitled “Economic Possibilities for Our Grandchildren”.
The great economist predicted that by 2030 the world’s developed countries would be so rich that people would have to work just 15 hours a week. Humans would devote most of their time to leisure and most work would be done by machines. This, he believed, would prompt a fundamental shift in our values: “We shall once more value ends above means and prefer the good to the useful,” he predicted.
How could he have got it so wrong? And do we now need to rethink our economic values?
On the face of it the thesis proposed by Keynes’s biographer Robert Skidelsky, and his philosopher son Edward, is a truism: that the endless pursuit of money is a blind alley that does not lead to the good life. When asked how rich they want to be, most people will say something on the lines of “enough to live a good life”. Indeed even David Cameron has pronounced himself dissatisfied with GDP as the sole barometer of the nation’s wealth: only last week, for example, the Office for National Statistics published the first official survey of our national wellbeing.
And yet we still chase after money and consumer goodies. The problem isn’t just our difficulty in saying “that’s enough”. Rather, the Skidelskys write, “the material conditions of the good life already exist, at least in affluent parts of the world, but … the blind pursuit of growth puts it continually out of reach”. Surveys of Britons’ happiness show little real change since the mid-1970s — despite a far bigger economy and much greater affluence today.
The failure of Keynes’s prediction is partly down to the growing inequality of advanced capitalist societies over the past three decades. The rich have taken a greater share of the fruits of productivity gains driven by technology. At the same time, though, Keynes failed to appreciate capitalism’s dynamism in creating new needs and desires.
He never dreamt of whole industries built around mobile phone ringtones, pre-washed salad leaves or dog-walking services. Thus, for most of us, life is no longer simply a Faustian bargain with capitalism to secure our basic needs.
Yet even if we can define what we mean by the “good life” — and I hope it will be more fun than the Skidelskys’ attempt to do so — how we re-gear capitalism to serve it remains far from clear.
The authors call for a “non-coercive paternalism” by the state. Some of what that would entail is sensible enough — more job sharing, limits on advertising. Other aspects would be politically tricky even where popular, such as shorter working hours, or where less so, such as taxes on personal consumption above a certain level. And their call for higher taxes to fund a basic state income scheme and higher public sector salaries is clearly going to find few takers in Westminster.
Yet the Skidelskys are right to ask such questions. At a time when politicians of all parties remain fixated on the return of economic growth, we have to ask: will it really make us happy?
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Saturday 25 May 2013
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