In this book, JM Keynes claims that by the year 2030, the standard of living will be incredibly high, life expectancy will be longer and we will be liberated from ‘want’. I suppose two of those statements are true now.
But what struck me was the statement that we will be working about 15 hours per week in 2030, this number getting ever smaller, to the point where we are so well off we will have TOO much leisure time, at which point we will retire to “non-economic” activity.
If we look around today we arn’t working less than ever, however our work is much easier thanks to technological progress. Is there any chance our grandchildren will be involved in “non-economic activity”.
Not as long as the state continues to contrive ways to siphon off ever more of our productivity. I wonder what our average work week might look like today without all the market-distorting interventions into the labor market and all the regulation that makes the cost of living so much higher than it could be. Might we be demanding more leisure if housing didn’t cost a very large, and increasing, portion of our incomes, for instance?
I thought it would be just be leisure and cultural stuff. We would be reading books and painting pictures and learning about ancient civilisations, but not as an investment, but just for the intrinsic value.
I understand that all our demands are infinite so there is an infinite amount of work to be done, so Keynes was almost certainly wrong here.
I just can’t find any strong rebuttals for his fantasy world argument.
I read an interesting report from The Economist lately (not in the magazine itself, but in one of the special reports it does for businesses) saying that in the last 37 years (the report was written in 2007 and so basically was talking about the period from 1970 to 2007) productivity has gone up over 85% but that the average real wage has only gone up 2%… The conclusion must be that the difference has been eaten up by inefficiency.
The statement wasn’t backed up by pages of statistics etc. but if you assumed, for the sake of argument, that the report from The Economist was correct then basically the implication would be that yes improvements in technology and more efficient companies have greatly increased our output but all of this has been for naught because you’ve got plenty of people working in non-economic activities to compensate for this. Some of them are called bureaucrats. Some of them are called builders (who were building houses that no body needed - as a result of interference by they bureacrats that resulted in market distortions) and some of them are called bankers… Basically, there’s a whole bunch of free loaders riding on the back of these productive gains.
The more working people produce, the greater the opportunity to steal from them - but stealing in itself has become a full time job (just look how busy Bernake is these days)!