What a legendary economist got wrong—and right—about our "economic problem"
Or: what a 2022 stress survey reveals about our political priorities
How are you doing right now? For 1/4 of the American population, the answer is not great. According to a well-designed survey by the American Psychological Association (APA) in 2022, 27% of U.S. adults are “most days so stressed they can’t function”.
Behind this number are millions of people: The boss losing their mind over a small mistake in your Powerpoint slide, the teacher overwhelmed with students’ demands, the barista struggling to keep a complex order in memory, the driver flipping you off in traffic, the parents juggling multiple jobs with housework and a sick child.
It’s easy to take this finding for granted. “Yep,” we shrug, “life can be stressful in our complex and demanding society!” But in today’s post, I want to try and remind ourselves that life isn’t supposed to be this stressful.
Sure, in ancient times, when we ran around in loin cloths trying to avoid being mauled by a saber-toothed tiger or giant sloth, it might have made sense to be stressed a lot of the time. Stress is a mechanism in our bodies that allows us to stay alert and respond adequately to threat, so in a dangerous world we ought to feel pretty jittery.
But in the present—and particularly in advanced economies like the U.S.—why do we experience so much threat? We are perfectly capable of producing enough food, shelter, and safety for all, which should reduce our stress levels to an all-time low. And indeed this is precisely what one of the greatest minds of all time predicted would happen for us.
I’m talking about the legendary British economist John Maynard Keynes, father of the macroeconomic models that inspired the New Deal and other major plans to boost economic growth. In 1930 he wrote a brilliant little essay called Economic possibilities for our grandchildren (find a copy here). He made a simple argument:
Thanks to industrialization and the accumulation of capital, the production of food, housing, equipment, and other stuff will accelerate exponentially (see my earlier post on agricultural productivity);
The human standard of living will rise in parallel, but not to more than perhaps 4 to 8 times the level of 1930;
Therefore, our production of goods will soon outstrip our needs and mankind will have solved its “economic problem”.
This simple logic led Keynes to a startling insight:
I draw the conclusion that, assuming no important wars and no important increase in population, the economic problem may be solved, or be at least within sight of solution, within a hundred years. This means that the economic problem is not-if we look into the future-the permanent problem of the human race.
Why, you may ask, is this so startling? It is startling because-if, instead of looking into the future, we look into the past-we find that the economic problem, the struggle for subsistence, always has been hitherto the primary, most pressing problem of the human race-not only of the human race, but of the whole of the biological kingdom from the beginnings of life in its most primitive forms.
~ John Maynard Keynes, “Economic possibilities for our grandchildren” (1930)
Keynes concluded that by the year 2030, after solving the “economic problem”, we would all be working 15-hour work weeks, spending the remainder of our time socializing and enjoying the arts. Indeed, he warned us that we should divide all remaining labor evenly so that everyone could enjoy the nice feeling of being productive:
For many ages to come the old Adam [unenlightened human nature -JvB] will be so strong in us that everybody will need to do some work if he is to be contented. We shall do more things for ourselves than is usual with the rich to-day, only too glad to have small duties and tasks and routines. But beyond this, we shall endeavour to spread the bread thin on the butter-to make what work there is still to be done to be as widely shared as possible. Three-hour shifts or a fifteen-hour week may put off the problem for a great while. For three hours a day is quite enough to satisfy the old Adam in most of us!
Yet here we are, Keynes’s grandchildren, nowhere near the 15-hour-a-week leisure dream he imagined. What the hell happened?
With the advantage of hindsight, I think we can consider three potential flaws in Keynes’s famous forecast.
The first flaw is that we are not nearly as good at sharing as Keynes believed we’d be. Our societies as a whole may be rich enough to house and nourish everyone, but vast inequalities in how we distribute these riches keep millions of people in poverty. There is very real economic suffering in even the richest countries on the planet, which is particularly unjust now that we’ve solved our “economic problem” at the societal scale. Given the detrimental effect of poverty on key population outcomes such as health and educational achievement, overcoming inequality should be our top priority. I wrote about this in a previous post:
The second flaw is that mankind’s economic hunger turns out to be a lot harder to satiate than Keynes thought. Even the richest among us feel dissatisfied a lot of the time! We have managed to raise our standard of living, but have simultaneously raised our expectations of what life should look like to the point where net satisfaction stays about the same. This inflation of expectation—known in psychology as the “hedonic treadmill”—affects everything we consume, from food to cars to fast fashion. It extends even to how we look at our children. Just a few weeks ago, I gave a talk to a group of kindergarten teachers about achievement anxiety. They shared with me that some of today’s parents are so eager to see their children be ahead of the (developmental) curve that they figure out on which day their toddler will undergo a routine shape-sorting test in school and train them at home beforehand as if it were an SAT or college application. Driven by stacks of self-help books about “the first 1000 days of life”, parents attempt to optimize even those aspects of human life that are supposed to unfold all by themselves. This leads to unnecessary stress even in the absence of a traditional “struggle for subsistence”.
The third flaw is that Keynes’s scope may have been too narrow. Keynes thought that once our economic problem was solved, we would be left with no purpose and no real issues pushing us to do anything—hence the 15-hour work week. But in reality, once economic issues become less pressing, other issues paradoxically seem to grow.
This is reflected in the APA’s stress survey from 2022. When asked what they felt stressed about, most participants mentioned inflation—and I felt the same in 2022, when inflation rates routinely exceeded 10%. But almost all other items on the list are decidedly uneconomic issues: the future of the nation, violence, global tension, climate change, and so on. With inflation and unemployment down to manageable rates today, it seems like our “economic problems” are falling on our list of daily worries, only to be replaced by moral questions about how we organize communal life.
These results places Keynes’s forecast in a fascinating new light. Yes, we have much less to fear from scarcity today than we did in 1930. If push comes to shove, we can house and feed everyone, as we chose to do during the COVID-19 pandemic (with stimulus checks and the like). Our hyper-productive economies have caused economic issues to lose much of their relevance, simply because they’re less pressing.
But while Keynes thought the absence of an economic problem would lead to leisure at best and ennui at worst, in practice it leads to other issues becoming more pressing, as if they finally have room to breathe. Like a mythological monster growing two new heads when you chop one off, our economic problem has stepped aside to allow other issues to become our top priorities in politics and in everyday life.
All this makes me reconsider the Dutch parliamentary election from last November. Far-right leader Geert Wilders won in a landslide that shocked many. In an earlier post, I struggled to understand this upset through an economic lens:
But for Wilders’s voters, this election wasn’t about their “economic problem” at all. It wasn’t even about specific policy issues like healthcare coverage or abortion. They simply care so deeply about identity that they would be willing to tear down any economic system if that’s what it takes to regain control over their way of life. Wasn’t this the motivation behind Brexit too—”Take Back Control”? It seems to me that such a shift in priorities is only possible in countries that have more or less solved their struggle for subsistence.
Indeed, a shift away from material priorities in economically good times has been observed before. Political scientists Paul Abramson and Ronald Inglehart tracked political values in eight Western-European countries between 1970 and 1990, and saw that the younger generations—who had grown up in the affluent period after World War II—had swapped out the materialist values of their parents for “postmaterialist” ideals about freedom of self-expression. A similar “generational replacement” appears to be happening now in the Netherlands, where mock elections in schools show that the youngest citizens are actually the most supportive of identitarian leaders like Wilders and Thierry Baudet.
This should be a lesson for progressive politicians worldwide. Keynes’s economic problem is being solved for more people every day. The most successful leaders of the next decades will therefore not be the ones with the best economic agenda, but the ones best able to articulate the moral issues that come into view once the specter of scarcity melts away.
All this raises some interesting new questions. First, given that there are still big economic issues to be solved—in particular inequality—why have these lost their political appeal, and is there a way to get them back to the top of the agenda? It’s also likely (but I’m not well acquainted with the data) that many of the daily stressors listed in the APA survey, such as gun violence and other crime, are exacerbated by that inequality. If all political issues are tied together in this way, can we really speak of separate “problems” or is there just one overarching issue of the “degree of thriving” in a society? And finally, how do people think about their own stressors? It seems to me that living a stressful life in a rich society is a strange and unjust fate that should fill us with righteous anger, but I’m wondering if others agree with me. Let me know in a comment:
For now, I leave you with one last piece of Keynes’s essay:
If the economic problem is solved, mankind will be deprived of its traditional purpose.
Will this be a benefit? If one believes at all in the real values of life, the prospect at least opens up the possibility of benefit. Yet I think with dread of the readjustment of the habits and instincts of the ordinary man, bred into him for countless generations, which he may be asked to discard within a few decades.
To use the language of to-day-must we not expect a general “nervous breakdown”?
A nervous breakdown? Perhaps not in the way Keynes intended, but sure—if 27% of us are “so stressed they can’t function”, something about our society has broken down. We now need to learn how to define that breakdown in a meaningful and productive way.
Thanks for reading! If this post was worth your time, consider subscribing to receive future updates or sharing it with a friend. Next week, another Educated Guess. ~Jeroen
After having read your article , I would conclude that there is a delicate balance to be struck (if it can be struck) between 1) meeting our daily subsistence needs, so we do not revolt as a consequence of economic deprivation on the one hand and 2) once those needs have been met, navigating "moral issues that come into view once the specter of scarcity melts away" on the other, as you state in your article. Both can lead to societal dissatisfaction, unrest and stress. Would you agree? Also, what does this say about how the human brain works? Are we inclined to occupy ourselves with new problems rather than enjoying what we have?
Relating to the third 'flaw' in Keynes's argument: I believe that even when basic economic needs have been met, people may still experience a feeling of scarcity and politicians can frame "others" as posing a threat to our welfare. One example is the "immigrants taking people's jobs" argument, which I believe combines the issue of identity with a fear of not being able to meet one's economic needs (by having a job). It has proved to work as an effective argument for politicians in times of economic difficulty (1930s), but it even seems to work well for certain politicians in current times of relative prosperity. So while I do agree that 'moral issues' other than economic ones may grow in importance once economic needs have been met, economic uncertainty can still play an important role as well, even if only perceived. And this could lead to people experiencing more stress than necessary. At the same time, people do actually face economic challenges even in rich countries, as you also recognise. The 'cost-of-living crisis' has been high on the political agenda in the past years and to a large extent for good reason I believe.
(All views expressed are my own)