Keynes is back, and so are his 'grandchildren'

John Maynard Keynes seems to be the economist everyone wants to consult these days (the fact that he died in 1946 notwithstanding). With an anemic world economy seemingly unable to function without massive governmental spending, Keynes has come to be seen as a prophet of direct governmental intervention in the market. Milton Friedman's famous quip that "We are all Keynesians now" - usually attributed to Richard Nixon - has new resonance today.

One byproduct of Keynes' newfound fame is an interest in some of his lesser-known writings. Among these is an essay he wrote in 1931 called "Economic Possibilities for our Grandchildren," a fascinating and optimistic prediction of future prosperity despite the economic doldrums of the post-World War I years. It's also the subject of Revisiting Keynes, a book edited by Lorenzo Pecchi and Gustavo Piga, in which an array of economists engage with Keynes's predictions.

The latest to cite the essay is fromer Treasury official, Berkeley professor, and blogger extraordinaire Brad DeLong, in a piece called "Our Economic Appetite" that just went up on the website of The Week. Here's a taste:

Nearly eighty years ago, John Maynard Keynes did the math on economic growth and concluded that within a few generations—by the time his peers' great-grandchildren came of age in, say, the 2000's—the persistent economic problem of too-scarce resources and too-few goods would no longer bedevil a substantial portion of humanity. He was right—even in the midst of our current hard times, he is right.

The current recession may turn into a small depression, and may push global living standards down by five percent for one or two or (we hope not) five years, but that does not erase the gulf between those of us in the globe's middle and upper classes and all human existence prior to the Industrial Revolution.

Read the whole thing here.