Rereading Keynes: Economic Possibilities of Our Grandparents

John Maynard Keynes, the most influential economist of the twentieth century, published his forecast, "Economic Possibilities for Our Grandchildren," in 1930, when the world was in the grip of the Great Depression. He posited that the depression would not signal the end of the industrial revolution as some feared at the time, but would prove to be a minor dip in the trend of gradual but substantial increases in productivity, wealth, and average living standards. He guessed that average living standards in Europe and the United States were four times greater in 1930 than they had been two hundred and fifty years earlier and that they would be four to eight times greater a hundred years hence. Despite depression, war, and the failure of much of the world to catch up, he was right: average real income in the United States is more than five times greater today than in 1930 and twenty times greater than three centuries ago.

However, the central claim of Keynes's essay failed to come true, even though it rested on logic as simple as one plus one equals two: The little work that needed to be done would be spread out among the population in portions of perhaps fifteen hours per week, because "everybody needs to do some work if he is to be contented."