Keynes’s World
 (A Capitalist Utopia)

Maynard Keynes imagined a society that would be centred on the pursuit of enjoyment rather than accumulation, but like other reformists he couldn’t fathom a future without money and commodities.

Markets, profit, money, and private property seem as natural as the air we breathe to most people. Like Adam Smith, they believe that the “propensity to truck, barter, and exchange one thing for another” is an aspect of our human nature. So it is naturally assumed that commodity exchange will continue to exist in the future, and that the only realistic way to overcome the problems we face is through a reform of capitalism. This is the “common sense” of today. And from this perspective, socialists appear to be unrealistic dreamers.

Certainly, socialists do dream of a new form of society, but our conclusion that fundamental social change is necessary is based on an understanding of today’s reality. We know from experience and study that the serious problems which humanity faces, such as poverty and war, arise naturally from the capitalist system itself. History also teaches us that other forms of society have preceded capitalism, so this system is neither eternal nor rooted in “human nature.” And we also have an idea of how to achieve socialism by means of a revolutionary political movement.

The aim of this article, however, is not so much to refute the claim that socialists are unrealistic, as to throw this same criticism back at those who believe capitalism will somehow work out its problems in the future. This reformist view, quite frankly, is a daydream. To concoct their capitalist utopia, reformists have to overlook the nature of capitalism as a class-divided system of production for profit, not to mention the fact that profit stems from surplus value obtained from workers.

The unreality of the reformists’ standpoint becomes clear if we look at any of their depictions of a better future under capitalism. The view of the economist J.M. Keynes seems as good as any to consider, particularly since his stature has been high (at times) among both capitalists and self-styled leftists.

Keynes’s prediction

In a 1930 article entitled “Economic Possibilities For Our Grandchildren,” Keynes predicts a far better world in a hundred years. He does not attach any label to his future society circa 2030, but it is said to be a world where the “economic problem” has been solved. This is defined as the problem of scarcity, which he describes as the central economic problem that has confronted humanity throughout history. Overcoming scarcity will mean that people’s “absolute needs” (as opposed to subjective needs) are fully met.

The solution to the problem of scarcity, Keynes says, is a continuation of the capital accumulation and technical innovation that have been raising the standard of living since the dawn of the “modern age” (capitalism) following centuries of stagnation. He views capital accumulation in material terms, noting that if capital increases at two percent a year, “the capital equipment of the world will have increased by a half in twenty years, and seven and a half times in a hundred years.” He encourages the reader to “think of this in terms of material things — houses, transport, and the like.”

This steady capitalist growth is the basis for Keynes’s bold prediction that the standard of life in “progressive countries” in a hundred years’ time “will be between four and eight times as high as it is to-day,” even adding that it “would not be foolish to contemplate the possibility of a far greater progress still.” Expressed in qualitative terms, he says that once economic scarcity has been overcome, we will be able to “devote our further energies to non-economic purposes.”

What scarcity?

Before further examining Keynes’s solution to “economic scarcity,” it is worth considering whether scarcity, at least as he understands it, is indeed our main problem.

Keynes is hardly alone in raising the problem of scarcity. In a popular university textbook by Harvard professor Gregory Mankiw, who chaired the Council of Economic Advisors under George W. Bush, students are informed on the very first page that, “Scarcity means that society has limited resources and therefore cannot produce all the goods and services people wish to have+a society cannot give every individual the highest standard of living to which he or she might aspire” (Principles of Economics).

Here this problem of scarcity is both an explanation and a justification for why some people have a less than ideal life. But if society’s resources are so limited, how can the rich (like Mankiw himself), and the ultra-rich, justify their own disproportionate consumption? The fact that a single individual, Warren Buffett, has 35 billion dollars on hand to donate to a charity run by another multi-billionaire, suggests that the “scarcity” some of us face does not stem from the limited resources of society.
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