Skip to Content

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.

The fact that the economic scarcity of certain individuals is an artificial condition, related to class divisions, should have been perfectly clear to Keynes. Already a century earlier, the Swiss economist Sismondi had been shocked to see first-hand how miserable workers in England were despite the tremendous advances in the output of production. The artificial nature of “scarcity” under capitalism becomes even clearer during a crisis, when factories remain idle because production is not profitable and commodities rot on shelves for a lack of customers.

Keynes wrote his article at the outset of the Great Depression, so he could not completely ignore the mass unemployment of the time. Yet, in his article, unemployment is dismissed as “growing-pains from over-rapid changes” or a “temporary phase of maladjustment.” He was confident that in the long run things would work out, which is a bit rich coming from a man who reminded us that “in the long run we are all dead.” Today, more than 75 years later, these growing pains continue. The “scarcity” resulting from unemployment seems unlikely to end any time soon.

Keynes’s way of framing the problem in terms of scarcity, and finding the solution in increased production, only makes sense if it is assumed that we are already dealing with a socialist society. That is, in socialism, where there is social ownership of the means of production and the aim of production is to directly meet human needs, any expansion of material production or increase in labour productivity would potentially raise the standard of living for every member of society.

Things are a bit different under capitalism. We know from experience, for example, that the introduction of new technologies or increased productivity will not necessarily result in a shorter working day or improved standard of living. This seemingly illogical state of affairs is not surprising when we consider that technical improvements are only made to gain a competitive advantage that will result in higher profits.

Keynes chooses to ignore the obvious fact that the pursuit of profit underlies technical innovation, making it seem instead as if every increase in production under capitalism will directly raise the standard of living for the population as a whole, bringing us that much closer to the end of scarcity.

Neighbourly thinking

How will we know when economic scarcity has become a thing of the past? Keynes writes: “The course of affairs will simply be that there will be ever larger and larger classes and groups of people from whom problems of economic necessity have been practically removed. The critical difference will be realised when this state of affairs becomes so general that the nature of one’s duty to one’s neighbour is changed.”

He argues that the number of affluent members of society will increase to the point that people’s way of thinking changes. Instead of being “economically purposive” (selfish), people will be generous towards each other. It is not at all clear, however, how “general” this state of affairs will have to be for a magical transformation in consciousness to take place.

The absurdity of Keynes’s dream speaks for itself. Why would a person suddenly begin acting in a neighbourly fashion one day, if the competitive system that had fostered his avarice were still very much in place? Moreover, it takes considerable wealth today for a person to be able devote his or her “energies to non-economic purposes.” And even those able to retire from the business world, to engage in philanthropy and the like, appoint other “economically purposive” characters to manage their affairs. At any rate, few people are satisfied even after their “absolute needs” have been met, and most seek to accumulate a bit more just to be on the safe side. It should be obvious that the general way people think and behave will only fundamentally change once we are free of the insecurity that the competitive capitalist system breeds.

To his credit, Keynes does seem a bit disgusted by the selfish way people act under capitalism in its present form. But in a strange twist of logic, he argues that selfish behaviour will some day set us free from selfishness. In fact, he warns us not to start acting too generous, too soon: “But beware! The time for all this is not yet. For at least another hundred years we must pretend to ourselves and to every one that fair is foul and foul is fair, for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer. For only they can lead us out of the tunnel of economic necessity into daylight.” Apparently, the road to paradise is paved with bad intentions.

Economic bliss”

Keynes’s depiction of what he jokingly refers to as “economic bliss” is very brief, but he does manage to effectively contrast the stunted nature of present-day life with a far more civilised existence in the future. He notes, for example, that people will begin living for the sake of enjoying the present, rather than endlessly accumulating for tomorrow. Instead of the fawning over the rich, people would value those “who can teach us how to pluck the hour and the day virtuously and well, the delightful people who are capable of taking the direct enjoyment in things.”

Keynes also points out that even after we are free of economic scarcity, many people will have a strong desire to work. He suggests, for instance, “three-hour shifts or a fifteen-hour week” would probably be “quite enough to satisfy the old Adam in most of us!” It is not clear whether this work is actually necessary, or just a way for people to occupy their time, but Keynes is right to suggest that work can be a source of human satisfaction (if taken in the proper dosage), which refutes the idea that no one would bother to work in socialism.

Compared to the joie de vivre that characterizes life in his future world, Keynes says that today’s love of money “as a possession” would seem a “somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease.” And he looks forward to the day when “all kinds of social customs and economic practices” that are “distasteful and unjust” can at last be discarded. Although, true to form, he feels obliged to remind us that such habits are “tremendously useful in promoting the accumulation of capital,” which is his motive force of history.

Many of Keynes’s observations, ironically enough, are applicable to life in socialism, but his clear assumption is that the system of production from the days of economic scarcity remains more or less intact. Even though money will no longer be loved as a possession, it will still be cherished “as a means to the enjoyments and realities of life.” In other words, people will still have to pay for whatever they consume. This naturally means that products are produced as “commodities” for exchange, and therefore the means of production are in the hands of private individuals or groups of individuals. Keynes even admits that there will be people in the future with “intense, unsatisfied purposiveness who will blindly pursue wealth,” although he assures us that we “will no longer be under any obligation to applaud and encourage them.”

In short, Keynes looks to a future where people are generous and enjoy life to the fullest even though production is carried out with profit in mind and money still makes the world go round. To which socialists can only respond: Dream on!