One of the most interesting books from the last year has been Revisiting Keynes: Economic Possibilities for our Grandchildren (MIT Press, £20) — a reprint of a 1931 essay by J.M.
One of the most interesting books from the last year has been Revisiting Keynes: Economic Possibilities for our Grandchildren (MIT Press, £20) — a reprint of a 1931 essay by J.M. Keynes in which he describes what his readers’ grandchildren should expect 100 years on. The piece is followed by 14 essays from present-day economists (four of them Nobel Laureates) discussing why Keynes got some things right and others so wrong.
To his credit, Keynes’s economic predictions seem spot on: his forecast of a compounded 2 per cent annual increase in income was optimistic for its time and so looks all the more prescient today. Yet his predictions about how we will react to our new wealth seem hopelessly wide of the mark: he believed by 2031 we would have translated surplus wealth into leisure, working no more than 16 hours a week and devoting our new-found free time to culturally enriching activities such as poetry and art. Patently this hasn’t happened yet: in fact higher-paid Westerners now work longer hours than the less well off, preferring to sacrifice leisure time for still more wealth.
Keynes’s idealistic view may be a product of his Bloomsbury background. Belonging to a cultural set where at least four hours had to be set aside each day for random sex with other self-regarding intellectuals may have caused him to overestimate the importance of leisure time. All the same, is it possible that by 2031 his anti-materialistic vision will seem less absurd than now?
To support this idea you could point to the generation of people now under 30 who, for all their faults, tend to be more questioning about consumption than the generation before.
This new outlook isn’t confined to the young. One unexpected prophet of the new anti-consumerism is my über-boss, Sir Martin Sorrell of WPP, who runs the world’s second largest advertising business from a tiny building in Farm St, W1. ‘People have become used to the aspiration that you should consume more; the aspiration that you should have a number of holidays, bigger houses… multiple houses. Our view, which is counter to what you expect our industry to argue, is that conspicuous consumption is not productive.’
Alongside environmentalism, other trends are working against rampant greed. A reaction against Russian and Eastern levels of bling may create a culture of conspicuous non-consumption in the West; what the Swedes call ‘lagom’. High commuting costs have driven some US employers to revisit the idea of a four-day week of ten-hour days — a useful step towards a more leisured society. Most people accept that the potential of technology to make working hours pleasanter rather than merely longer has yet to be realised.
Remember, too, the astonishing power of the internet to make cheap things cool. When performed online, bargain hunting or buying secondhand becomes a mark of intelligence not poverty. By reducing transaction costs, the internet also makes it easy to rent what we once had to own. The wonderful www.streetcar.co.uk does this for cars in London. In Canada, www.shouldercandy.com does it for bags. Fractional ownership does it for homes.
A credit crisis also may help end the arms-race of ‘how much?’ and replace it with a culture of ‘how good?’ As Felipe Fernández-Armesto wrote recently, ‘Botticelli did some of his best, highest-minded paintings after the Medici Bank crashed in 1494.’