Alf Young: There’s more to life than rising GDP
CHASING wealth, if it doesn’t make us happier and give us more leisure, is not what the great economist ordered, writes Alf Young
In Charleston, the East Sussex farmhouse where the Bloomsbury set of artists, writers and intellectuals spent much of their leisure time over many decades, after Vanessa Bell and Duncan Grant first signed the lease in 1916, you can still find, on the first floor, the bedroom occupied by the economist John Maynard Keynes, largely as it was when the Bloomsberries, as Keynes’s biographer Robert Skidelsky calls them, pursued “their annual festivals of intellect, art and sexual intrigue”.
On one wall hangs a fine portrait of Keynes, sitting writing against a wall in Charleston’s exuberant garden, painted by his one-time lover Grant, in 1917, and restored to the house in 2006, after a near-50-year absence. On the mantelpiece sits a battered red Treasury box from Keynes’s time there during the First World War. And pinned below it – I know not by whom or when – hangs a copy of a David Low cartoon, first published in the Evening Standard in 1938.
It shows the dauntingly tall figure of Keynes striding up a dry Downing Street, beneath a large, unfurled brolly, carrying the label “Anti-Slump Precautions”. Outside that door, re-labelled the “Temple of Trade & Industry Sunshine”, sit assorted male figures, naked but for towels, as in a sauna. And hanging on the railings is the day’s weather report. “Set Fair Indefinitely, By Order.” One of the towelled figures is shouting out. Low’s caption: “That fellow ought to be ashamed! Encouraging rain!”
Keynes, of course, despite his towering status in economic thought in the first half of the 20th century, initially got the consequences of the 1929 Wall Street crash all wrong. As his biographer recounts, Keynes told his business partner, Oswald Falk, there would be one “bad winter of unemployment in Britain”. But he looked forward to “an epoch of cheap money ahead (which) will be in the real interests of business all over the world”. With low interest rates “enterprise throughout the world can get going again…commodity prices will recover and farmers will find themselves in better shape”.
Instead his own investment wealth was, by the end of 1929, “almost wiped out”. He managed to restore his personal fortune, despite the great depression that dragged on through the 1930s, triggering widespread mass unemployment. With the publication of his General Theory of Employment, Interest and Money in 1936, however, Keynes’s name became inextricably linked to an approach to policy-making that stresses stimulus over restraint in times of extreme economic distress.
When competitive markets break down, Keynes argued, it is not enough to allow them to restore full employment in the long run by, for instance, cutting wages. Rather under-employment and under-investment are more likely to become the natural state of affairs, unless policy-makers take steps to stimulate aggregate demand. Unless individuals, companies and even governments spend more to boost demand, protracted slump beckons.
We are back, are we not, to that same battle of economic philosophies and ideologies, caricatured in that 1938 Low cartoon, pinned to that Charleston mantelpiece? The news that UK output, on the GDP measure, is thought to have collapsed by an unexpectedly severe 0.7 per cent between April and June, the third successive quarterly fall, has rattled nerves everywhere. The latest state of the economy report from the Scottish Government’s chief economist, Dr Gary Gillespie, tries to see some upside.
But even Dr Gillespie’s overall tone is decidedly gloomy. “An unprecedented period of deleveraging, particularly within the household, financial and government sectors (makes) achieving robust growth…particularly challenging,” he suggests. He does not envisage Scottish output even getting back to pre-recession (2007/08) levels until “some point during 2014”.
Last week I suggested my old sparring partner and fellow columnist in this slot, Bill Jamieson, should be renamed Sunshine Jamieson, for his attempts to accentuate the positives in these grim times. A week later even Bill has been reaching for the stimulus pills, albeit in the form of a temporary cut in VAT. In the process Sunshine had a curmudgeonly go at the “hyper-babble about well-being and happiness” from the Office for National Statistics.
Certainly the ONS’s attempts to deliver on David Cameron’s desire to know more about the state of national well-being are still in their rather tentative infancy. But it is not, as Bill suggests, “statisticians chasing rainbows”. Perhaps there are a number of self-selecting factors at work in why the populations of the Northern and Western Isles and Aberdeenshire are, apparently, the most contented communities in Scotland. But what, I wonder, is the point of chasing steadily bigger GDP and rising material prosperity if not to make more of us all feel we are living a full and enriching life?
In 1930 Keynes wrote a short essay called Economic Possibilities for our Grandchildren. In it he predicted that, by 2030, across the developed world, the average standard of living would have grown between four and eight fold. Industrial automation would have become widespread. Hours of paid work, he predicted, would have fallen to three a day, a 15-hour week. As the objective of ever-higher GDP per head lost its lustre, millions of ordinary people would have the time and material resources to live the good life to the full.
With 18 years still to go, despite double-dip recessions and credit crunches and all the other current miseries, we are well on our way to part of that vision. Average standards of living are already up some five-fold. However, having fallen below 40 hours, the average working week (and the average working life) is being pushed higher again. The consumerist obsession with acquiring more and more stuff seems insatiable. Any prospect of people embracing Keynes’s vision of the good life is receding.
And now Robert Skidelsky and his philosopher son, Edward, have co-written a powerful little book, with the provocative title How Much is Enough? As an antidote to greedy bankers and the rest of our loadsamoney culture, it’s hard to beat. The case it makes for the good life may not be to everyone’s taste. They list seven basic elements – health, security, respect, personality (what followers of Kant would call autonomy), harmony with nature, friendship, and leisure.
Instead of the increasingly arid debate among competing schools of economists about how to get GDP back on an ever-rising trajectory, this seems to me a reasonable starting point for a very different national conversation. One about what really matters to live a good life and what elements, if not the Skidelskys’ chosen seven, it should encompass.
To visit Charleston is to get a glimpse of what really mattered to Keynes and the other members of the Bloomsbury set. They decorated every surface of their farmhouse, much of the furniture too. Their paintings and ceramics fill every room.
Keynes died in another house, Tilton, he had first leased 20 years before on the same Firle estate, nestling in the same chalky beauty of the South Downs. Some of what they got up to wouldn’t be to everyone’s taste. I’m sure the Catholic Archbishop-elect of Glasgow wouldn’t approve. But at least they shaped their lives beyond the crass confines of gross domestic product.
Search for a job
Search for a car
Search for a house
Weather for Edinburgh
Wednesday 19 June 2013
Temperature: 9 C to 18 C
Wind Speed: 16 mph
Wind direction: West
Temperature: 12 C to 20 C
Wind Speed: 8 mph
Wind direction: East