Why everybody isn't rich
Since the 1970s we've all been working longer, with people at the bottom giving up the most leisure time. Had postwar income distribution continued past the 70s, that might not have happened.
In 1930 John Maynard Keynes (pictured above soiling a daybed with his shoes) wrote the following:
The prevailing world depression, the enormous anomaly of unemployment in a world full of wants, the disastrous mistakes we have made, blind us to what is going on under the surface to the true interpretation of the trend of things ... We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come--namely, technological unemployment. This means unemployment due to our discovery of means of economizing the use of labor outrunning the pace at which we can find new uses for labor …
But this is only a temporary phase of maladjustment. All this means in the long run that mankind is solving its economic problem … a point may soon be reached, much sooner perhaps than we are all of us aware of, when these needs are satisfied in the sense that we prefer to devote our further energies to non-economic purposes.
Keynes was right, broadly speaking, that there would be more leisure time in the future. But he was quite wrong in suggesting that the “economic problem” would be solved, because he just assumed, naif that he was, that economic growth would be shared equally. Keynes thought we’d all work less, but work hours have been going up, with those at the bottom increasing work hours the most.
In my latest for the New Republic, I look at a new study from Rand that imagines a world after Keynes’s death in 1946 in which wages rose across the board proportionate to economic growth (as occurred from the end of World War II into the 1970s). In Randworld, median income is about twice what it is down here on planet Earth. Shame on us for not living there. We’ve let a great man down.