Notes on Europe’s Economic Decadence
In 1930, with the Great Depression in its early stages and British unemployment already around 15 percent, John Maynard Keynes wrote an essay about the economic glory to come. He wanted, he said, “to disembarrass myself of short views and take wings in the future,” and his conclusion was that “the economic problem may be solved, or be at least within sight of solution, within a hundred years.” Indeed, he argued, the economic problem would turn out to be trivial in comparison with the “permanent problem,” which was how to occupy all the leisure that prosperity would bring: how to “cultivate into a fuller perfection, the art of life itself.”
As bizarre as it seemed with banks failing all around, Keynes believed that, while there would be turbulence along the way, living standards would soar to unimagined heights thanks simply to the power of compounding applied to historic rates of growth. As it turned out, Keynes was right. In the United States, average real disposable income per person—the purchasing power of the money that’s yours to spend or save—tripled between 1960 and 2009.
About the Author
James K. Glassman, former undersecretary of state for public diplomacy and public affairs, is executive director of the George W. Bush Institute in Dallas.