In the first part of this series, we explored Keynes’ assertion that the economic problem is solvable, that one day, the question of how we feed, clothe, and shelter ourselves would be a relatively minor aspect of our lives. Specifically, Keynes predicted that by 2030, or some point very close to that, we will only have to work 15 hours a week to meet those basic needs.

With only 16 years to close the gap between our current 42 hour-a-week average and Keynes’ 15 hour target, the prospects are not very rosy. From the late 1800’s until about 1950, however, America was on track to achieve that very goal. And in some important ways, we are still making good progress on the metrics Keynes discussed in Economic Possibilities for our Grandchildren. Does that mean Keynes’ target may be realistic over a longer time frame? Perhaps. But before that question can be answered, we first need to get a sense of how the last 84 years of economic development have played out in the United States.

Let’s begin by looking at what Keynes got right. First, we are getting closer to growing enough food, building enough shelter, and making enough clothes for the world’s population. And we are able to do so with fewer and fewer hours of work, just as Keynes predicted. Since 1900, worker productivity in the United States has increased at an average rate of about 2.3% a year.

Until the Great Depression began in 1929, the amount of hours worked per week by the average worker was declining at a rate proportional to our increasing productivity. As massive numbers of people lost their jobs and farms in the Depression, the average number of hours worked dropped sharply and remained erratic until 1949 – four years after the end of WWII – where they dropped into the 40 hours-per-week range. While fluctuating a bit since, they have begun to rise again over the past decade, settling at just over 42 hours a week.

Another way of testing Keynes’ assertion is by examining how much the average American family has historically spent on the basics: food, clothing, and shelter. In 1900 for instance, 80% of a family’s budget was spent on the these three essential areas, with food taking up a whopping 43% of the budget. By 1950, the overall percentage declined to 70%, with food costs dropping to 30%. And in 2003, families were only spending half of their budget on survival items, with food dipping down to a measly 13%. And here’s a surprising fact: despite the rise of designer labels and the average American’s growing shoe collection, only 4% of our budgets now goes towards clothing compared to 14% in 1900. (Here’s a great story from the Atlantic if you want to learn more about how our budgets have changed over the past century.)

America’s increasing productivity created a scarcity of need.

These shifts, especially in the area of food production, were also reflected in the nation’s workforce. In 1870, between 70% and 80% of the U.S. population was employed in agriculture. Today, that number is around 2%.

From the late 1800s to the early 1950s, Americans consistently chose to trade the country’s growing productivity for less working hours. After all, there wasn’t much on the market that people felt was worth purchasing beyond their basic necessities. Instead of a scarcity of food, clothing, or shelter — a scarcity that had been humanity’s context for millions of years — America’s increasing productivity created a scarcity of need. For the better part of 70 years, American workers found that fewer working hours offered a better return on investment than additional purchasing power.

If we were doing so well and making so much progress towards a shorter work week, what happened? Where did we go off track and how did Keynes get it so wrong?

The answer to that question isn’t entirely clear. One possibility is that as working hours started to get into the range of 40 hours a week, Americans were not finding ways to put their newfound free time to good use, that they weren’t valuing more free time as much as they had previously. This situation was one that Keynes considered: “Will this [a 15 hour work week] 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.”

Although Keynes demonstrated some prescience here, he’s also guilty of a huge oversight. He thought an economic solution was a technological inevitability: rising productivity would always equate to fewer working hours. Yet that outcome was never as simple or inevitable as Keynes presented it. While he saw the potential for psychological upheaval, he saw that upset as a reaction, as an upset that would occur after the economy was solved. He never considered that humanity might be cunning enough to actually interrupt the economic solution before it was achieved.

“If one believes at all in the real values of life,
the prospect at least opens up the possibility of benefit.”

Which brings us back to the 50’s. Thanks to the newly invented television and the emerging field of marketing, humanity found a way to make need abundant again. I’m not going to discuss this era in detail here — I’ll save that for the next part of this essay series — but it is sufficient to say that the marketing field learned how to tap into needs that people didn’t even knew they had and sell goods and services that people had never wanted before. Along with the rise of personal credit, the emergence of planned obsolescence, and the granting of citizenship rights to corporations, marketing helped increase our buying habits again. Consequently, it began to seem like a bad idea to work any less. Said differently, marketing figured out a way to interrupt the economic solution.

By the mid-60’s, working hours stopped decreasing. The field of marketing was refining its trade (a story told very well in the AMC series Mad Men). Consumer culture was quickly emerging but Americans had not totally given up on an economic solution yet. In the back of their minds, people were still thinking that technology might someday provide a future where our survival needs could be met with a minimal amount of input. To illustrate, let’s check out another pop culture gem, this one from 1962: The Jetsons. Even if you’re a real Jetsons’ buff, you might not have realized at the time that George Jetson only worked three two-hours days. Why not? Because a good number of episodes were set around George’s workplace, Spacely Sprockets. Which, in itself, is telling. The Hanna-Barbera writers could imagine a future where people would spend less time in a traditional workplace but they couldn’t imagine what we would do instead.

In the 70s, the economy took a nose dive, which opened up the possibility to return to the trend of reduced working hours. In 1979, Representative John Conyers of Michigan proposed a bill that would shorten the workweek to 35 hours as a means to get people working again. By then, though, a growing number of American families were in debt and people made no bones about not wanting to work less if that meant they had less money to pay their bills and/or buy new consumer goods. Consequently, after a few days of hearings, Conyers’ bill flopped and didn’t even gain consideration in the Senate.

If there was any lingering doubt about how Americans would choose to utilize future increases in the economy’s productivity, the doomed attempts at a workweek reduction in the late 70s made it clear: people wanted more purchasing power even if that choice increased the odds that they couldn’t find a job at all. Consumer society was now firmly in place.

Going back to our original inquiry about the current viability of Keynes’ prediction, we’ve learned that he was way off base about an economic solution being a technological inevitability. But we also discovered that productivity has increased at a rate very similar to Keynes’ estimates. And we know that we’re spending 38% less of our budgets on our survival needs. On the other hand, we haven’t seen a significant decrease in working hours for more than 65 years, income inequality is greater than in any other point in our country’s history, and we now have a new classification of people in our country called “the permanently unemployed.”

In short, we have a mixed bag of results. But — returning to an assertion that I made in Part I of this essay series — Economic Possibilities is not just about the 100 years between 1930 and 2030. Keynes’ optimistic timeline is only the headline grabber, the newsbite of the story.

At some level, we all know that there is more to living than feeding, clothing, and sheltering ourselves. We may not be able to articulate exactly what that “more” is, but it certainly becomes a lot easier to imagine how we could go about expanding the frontiers of human knowledge, experience, and creativity if our day-to-day survival needs were met. With the distinctions from Economic Possibilities, Keynes has given us the language to have a dialogue about a different kind of future, one built upon a context of abundance rather than scarcity, of living rather than surviving.