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Revisiting KeynesEconomic Possibilities for Our Grandchildren$
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Lorenzo Pecchi and Gustavo Piga

Print publication date: 2008

Print ISBN-13: 9780262162494

Published to MIT Press Scholarship Online: August 2013

DOI: 10.7551/mitpress/9780262162494.001.0001

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Toward a General Theory of Consumerism: Reflections on Keynes’s Economic Possibilities for our Grandchildren

Toward a General Theory of Consumerism: Reflections on Keynes’s Economic Possibilities for our Grandchildren

Chapter:
(p.40) (p.41) 3 Toward a General Theory of Consumerism: Reflections on Keynes’s Economic Possibilities for our Grandchildren
Source:
Revisiting Keynes
Author(s):

Joseph E. Stiglitz

Publisher:
The MIT Press
DOI:10.7551/mitpress/9780262162494.003.0004

This chapter demonstrates how Keynes underestimated the pace of innovation as well as the rate at which capital could be accumulated and invested well. The possibility of solving “the economic problem,” as referred to by Keynes, is already on hand. If the more than $48 trillion dollar global GDP were divided equally among the earth’s some six and a half billion inhabitants, each would have approximately $7,000, more than enough to bring everyone out of poverty. What Keynes constantly failed to acknowledge is the issue of distribution. While most of those in advanced industrial countries have more than enough to meet their economic needs, approximately half of the world still live on less than two dollars a day, with some one billion still living on less than a dollar a day. These individuals confront the economic problem of subsistence day in and day out; our society—and Keynes—has failed to provide an answer for them.

Keywords:   pace of innovation, Keynes, capital, the economic problem, global GDP, poverty, distribution, subsistence

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