Unemployment and Social Needs

Abstract

At the Madrid conference of 1930 (Keynes, 1930), J.M. Keynes maintained that both of the two opposed errors of pessimism would be proved wrong in our own time: the pessimism of the revolutionaries who think that things are so bad that nothing can save us but violent change, and the pessimism of the reactionaires who consider the balance of our economic and social life so precarious that we must risk no experiments. Keynes maintained that the disease of technological unemployment (unemployment due to the discovery of means of economizing on the use of labour outrunning the pace at which we can find new uses for labour) would be only a temporary phase of maladjustment, and that mankind would have solved its economic problem in a hundred years’ time. In the light of that prediction, man ought to find himself faced with his real, his permanent problem, in just over thirty years from now: how to use his freedom from pressing economic cares, how to occupy his leisure time, which science and compound interest will have won for him, to live wisely and agreeably and well.

The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniences of life which it annually consumes, and which consist always, either in the immediate produce of that labour, or in what is purchased with that produce from other nations.

Adam Smith