Economics: Its History and Politics
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Economics: Its History and Politics
Is economics the dismal science or does politics make it the dismal science.
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David M. Levy, Sandra J. Peart, The Secret History of the Dismal Science. Part I. Economics, Religion and Race in the 19th Century | Library of Economics and Liberty

David M. Levy, Sandra J. Peart, The Secret History of the Dismal Science. Part I. Economics, Religion and Race in the 19th Century | Library of Economics and Liberty | Economics: Its History and Politics | Scoop.it

My motto is: Nothing is ever as it seems!  And stis story proves that point one more time.   This story has VI parts.  All very, very very interesting.

 

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Welcome to the ‘homeless’ working poor – a new neoliberal KPI | Bill Mitchell – billy blog

Welcome to the ‘homeless’ working poor – a new neoliberal KPI | Bill Mitchell – billy blog | Economics: Its History and Politics | Scoop.it
In advanced nations, poverty used to be a thing of old age, once income had stopped due to retirement and savings depleted. Old-aged pension systems were intended as Welfare States emerged to prevent that fall into poverty. The pension systems reduced the incidence of extreme poverty and the full employment era that followed the Second World War, where governments committed to using their fiscal capacities (spending and taxation) to ensure there were sufficient jobs for all, allowed workers to improve incomes and saving. Research in the early 1970s (particularly from the US, where the pension systems were less generous and working conditions less regulated) started to disclose the incidence of the ‘working poor’. In more recent times, the concept of the working poor has spread from the US to most advanced nations. In this modern era of renewed real wage repression, rising energy costs and housing costs, workers are not only facing increased risk of poverty but also of homelessness. Welcome to Australia – the nation with the second highest median wealth per adult in the world. Yesterday (February 21, 2018), the Australian Bureau of Statistics (ABS) released the – Wage Price Index, Australia – for the December-quarter 2017. Private sector wages growth was 1.9 per cent in the December-quarter continuing the seven consecutive quarters of record low growth. However, with the annual inflation rate running at 1.9 per cent, real wages growth was static. And with real wages growth lagging badly behind productivity growth, the wage share in national income is now around record low levels. This represents a major rip-off for workers. The flat wages trend is also intensifying the pre-crisis dynamics, which saw private sector credit rather than real wages drive growth in consumption spending. And now, the latest data shows that workers are experiencing increased homeless. It is not just a problem of the ‘working poor’ now. Welcome to the ‘homeless’ working poor – a new neoliberal KPI.
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How To Rewrite The Rules Of Globalization - via @socialeurope

How To Rewrite The Rules Of Globalization - via @socialeurope | Economics: Its History and Politics | Scoop.it

"How did globalization create such discontent in developed and developing countries alike? Nobel laureate and INET grantee Joseph Stiglitz explains. Stiglitz says that a corporate-driven policy agenda and the distorted economic views bolstering them have deepened inequality and undermined social stability in regions across the world."

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We should look closely at what Adam Smith actually believed – Paul Sagar | Aeon Essays

We should look closely at what Adam Smith actually believed – Paul Sagar | Aeon Essays | Economics: Its History and Politics | Scoop.it
f you’ve heard of one economist, it’s likely to be Adam Smith. He’s the best-known of all economists, and is typically hailed as the founding father of the dismal science itself.

Furthermore, he’s usually portrayed as not only an early champion of economic theory, but of the superiority of markets over government planning. In other words, Smith is now known both as the founder of economics, and as an ideologue for the political Right.

Yet, despite being widely believed, both these claims are at best misleading, and at worst outright false.

Smith’s popular reputation as an economist is a remarkable twist of fate for a man who spent most of his life as a somewhat reclusive academic thinker. Employed as professor of moral philosophy at the University of Glasgow, the majority of Smith’s teaching was in ethics, politics, jurisprudence and rhetoric, and for most of his career he was known for his first book, The Theory of Moral Sentiments (1759). His professional identity was firmly that of a philosopher – not least because the discipline of ‘economics’ didn’t emerge until the 19th century, by which time Smith was long dead. (He died in July 1790, just as the French Revolution was getting into full swing.)
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Quality of Government, Not Size, Is the Key to Freedom and Prosperity - via @EvonomicsMag

Quality of Government, Not Size, Is the Key to Freedom and Prosperity - via @EvonomicsMag | Economics: Its History and Politics | Scoop.it
In the first post in this series, I examined the effect of the size of government on freedom and prosperity. Using indicators of economic freedom, personal freedom, and prosperity for a sample of 144 countries, I arrived at two significant results. First, I found that the data showed economic freedom to be positively associated with both personal freedom and prosperity. Second, I found that greater personal freedom and prosperity were associated with larger, not smaller, governments.

This post digs deeper into the data by constructing a measure of the quality of government. It turns out that the apparently positive effect of larger government on freedom and prosperity arises from a positive association between the size and quality of government. Quality of government affects freedom and prosperity much more strongly than simple size.
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Employment as a human right

Employment as a human right | Economics: Its History and Politics | Scoop.it
As I indicated earlier this week, I will progressively add notes to the body of work that will become the manuscript for my next book (with long-time co-author Joan Muysken) on the – Future of Work. As I write bits and pieces, I will post them here for comments and feedback. The book will be published sometime in 2018. At present, I am working on the philosophical considerations that we will deploy to underpin the more prescriptive elements (policy proposals) that we will produce. Today, I have been writing about the ethical basis for work. This is derived from work I did at the turn of the century. Part of the text today was written in collaboration with a former colleague John Burgess and the body of work we produced was subsequently published in several periodicals and book chapters around that time. However, the ideas sketched here were taken from parts of the papers that I mostly wrote although trying to decipher the exact division of labour is impossible. In that sense, I acknowledge the fruitful nature of my interaction with John at that time and the body of work we produced together.
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Has the time come for a quantum revolution in economics? – David Orrell | Aeon Essays

Has the time come for a quantum revolution in economics? – David Orrell | Aeon Essays | Economics: Its History and Politics | Scoop.it
Indeed, in recent years there have been many calls for economics to reinvent itself, most noticeably from student groups such as the Post-Crash Economics Society, and Rethinking Economics. In 2017, the United Kingdom’s Economic and Social Research Council announced that it was setting up a network of experts from outside economics whose task it would be to ‘revolutionise’ the field. And there have been countless books on the topic, including my own Economyths (2010), which called for just such an intervention by non-economists.
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The Real Threat to Hinduism: The Slow Death of India's Rivers

The Real Threat to Hinduism: The Slow Death of India's Rivers | Economics: Its History and Politics | Scoop.it

"Hinduism shares an intricate, intimate relationship with the climate, geography, and biodiversity of South Asia; its festivals, deities, mythology, scriptures, calendar, rituals, and even superstitions are rooted in nature. There is a strong bond between Hinduism and South Asia’s forests, wildlife, rivers, seasons, mountains, soils, climate, and richly varied geography, which is manifest in the traditional layout of a typical Hindu household’s annual schedule. Hinduism’s existence is tied to all of these natural entities, and more prominently, to South Asia’s rivers.

 

Hinduism as a religion celebrates nature’s bounty, and what could be more representative of nature’s bounty than a river valley? South Asian rivers have sustained and nourished Hindu civilizations for centuries. They are responsible for our prosperous agriculture, timely monsoons, diverse aquatic ecosystems, riverine trade and commerce, and cultural richness.  Heavily dammed, drying in patches, infested by sand mafia and land grabbers, poisoned by untreated sewage and industrial waste, and hit by climate change — our rivers, the cradle of Hinduism, are in a sorry state.

 

If there is ever a threat to Hinduism, this is it. Destroy South Asia’s rivers and with it, Hinduism’s history and mythology will be destroyed. Rituals will turn into mockery, festivals, a farce, and Hinduism itself, a glaring example of man’s hypocritical relationship with nature. The fact that we worship our rivers as mothers and then choke them to death with all sorts of filth is already eminent."

 

Via Seth Dixon, Mike Busarello's Digital Storybooks
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Douglas Vance's curator insight, April 23, 12:36 PM
The threat to Hinduism seems to in a way be a self inflicted wound. Despite the bias of the article and some of the crackdowns on certain religious practices in India, the fact is that Hinduism's inseparable ties to nature and rivers puts it in a tenuous position as the population of India explodes. If something isn't done to preserve and clean up these rivers, Hinduism may be at risk of destroying itself both figuratively and possibly quite literally. 
Zavier Lineberger's curator insight, April 24, 12:57 PM
(South Asia) With a population of 1.3 billion people, India is bound to have serious problems with pollution. But pollution has a profound impact on a religion closely tied with nature and geographic locations for thousands of years. Rivers that were previously seen as the "nurturers of Hinduism" are now drying up because of climate change or are polluting the area. The destruction of Indian rivers is not given proper public attention and the loss of rivers could lead to the loss of Indian history and the meaning of Hindu culture.
Nicole Canova's curator insight, May 1, 1:21 AM
Religion is shaped by the geography of the region in which it develops.  For example, Hinduism is heavily influenced by the rivers of India, and these rivers are considered holy places sites and places of cleansing and purification.  However, the cleansing power of the rivers is diminished by pollution that makes it unsafe to take part in ritual bathing.  Pollution, climate change, and deforestation are also having an impact on other aspects of Hinduism, which is about celebrating nature in it's entirety, including monsoons, forests, and agriculture.  As nature continues to be negatively impacted by human activity, many aspects of Hinduism will also be negatively impacted.
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Mark Blyth: Why Do People Continue To Believe Stupid Economic Ideas? - Full Talk (April 2017)

volatilityinvesting.co.uk Volatility and Tail Risk Educational Event, London, Thursday 06 April 2017 Slides

Via Nicholas Ripley
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pdeppisch's comment, December 29, 2017 8:02 PM
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Trade Unions On Frontline In Battle Against Inequality

Trade Unions On Frontline In Battle Against Inequality | Economics: Its History and Politics | Scoop.it
The European Commission continues to talk about robust recovery, but with wages falling or stagnating, many people in Europe are worse off than they were a decade ago. The European Foundation for the Improvement of Living and Working Conditions has recently reported that more than half the population in 11 EU Member States has difficulty making ends meet. Households in seven EU countries – Croatia, France, Greece, Ireland, Italy, Slovakia and Spain – say their living conditions are still more difficult than before the 2007 crash. Some of those countries were subject to punishing austerity regimes following the crisis. And in Italy and Croatia the proportions of people reporting difficulties since 2011 have also risen – by +9 and +8 percentage points respectively.

Concern about growing inequalities in Europe is increasing – and not only among those who represent working people.

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Are You Ready To Consider That Capitalism Is The Real Problem?

Are You Ready To Consider That Capitalism Is The Real Problem? | Economics: Its History and Politics | Scoop.it
In February, college sophomore Trevor Hill stood up during a televised town hall meeting in New York and posed a simple question to Nancy Pelosi, the leader of the Democrats in the House of Representatives. He cited a study by Harvard University showing that 51% of Americans between the ages of 18 and 29 no longer support the system of capitalism, and asked whether the Democrats could embrace this fast-changing reality and stake out a clearer contrast to right-wing economics.
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Reflections on Hayek | VOX, CEPR’s Policy Portal

Reflections on Hayek | VOX, CEPR’s Policy Portal | Economics: Its History and Politics | Scoop.it
We believe that Hayek’s economic vision and critique of equilibrium theory remain not only relevant, but apply with greater force, as information has become ever more central to economic activity and the complexity of the information aggregation process has become increasingly apparent. Advances in computational capacity and the growth of online transactions and communication have made the collection and rapid processing of big data feasible and profitable. Many markets now involve algorithmic price-setting and order placement alongside direct human action, raising interesting new questions about the processes by which information is absorbed and transmitted by prices.

However, shown in a recent paper (Bowles et al. 2017), we wish to call into question Hayek’s belief that his advocacy of free market policies follows as a matter of logic from his economic vision. The very usefulness of prices (and other economic variables) as informative messages – which is the centrepiece of Hayek’s economics – creates incentives to extract information from signals in ways that can be destabilising. Thus, we find considerable lasting value in Hayek’s economic analysis, while nonetheless questioning the connection of this analysis to his political philosophy.
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The rise of the “private government”

The rise of the “private government” | Economics: Its History and Politics | Scoop.it
I have always found it odd (read totally inconsistent) that people rail against government intervention as if it is a blight on our freedom, but ignore the ‘governance’ of workplaces by capital, who seek every way possible to destroy our freedom and initiative unless it is serving to advance their bottom line. We ignore the benefits of collective goods and laws that protect us, but turn a blind eye to the on-going, minute-by-minute, repression in the workplace. I was reminded of this again as I was reading a new book that came out in May 2017 – Private Government: How Employers Rule Our Lives (and Why We Don’t Talk About It) – by American philosopher Elizabeth Anderson. She studies that way in which corporate America serves in effect as a “private government” minutely and vicariously controlling our daily working lives yet many of us still accept the construction that this is the ‘free market’ operating. It is when the word ‘free’ loses all meaning. I especially like her use of the term “private government” to reinforce the hypocrisy of the elites and the inconsistency of those (workers included) who call for small ‘government’ as if that is the exemplar of freedom.

In the Introduction (by Stephen Macedo) we read that the book is a:

… call for a radical rethinking of the relationship between private enterprise and the freedom and dignity of workers.
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Neoliberalism corrupts the core of societal values | Bill Mitchell – billy blog

Neoliberalism corrupts the core of societal values | Bill Mitchell – billy blog | Economics: Its History and Politics | Scoop.it
It is Wednesday and just a brief comment on current affairs today. Tomorrow I will have Part 2 of my response to the German attack on Modern Monetary Theory (MMT). Nations more often and not claim to identify with a value system that is intended to bind the citizens together. It is a fine line between this and nationalism. The US for example, claims to be the land of the free, although that is a patently ridiculous thing to hold out given the nature of its society. Australia has long traded on the claim that it elevates sportspersonship, fairness, honesty above all else. In a sports’ obsessed nation, we hold ourselves out to be ‘fair but tough’. We play very hard – competitively – but honour sporting traditions. At times, this claim is at the sanctimonious extremes and we regularly criticise other sporting nations for what we perceive to be rule breaking – even rule stretching doesn’t escape our ‘holier than thou’ media and commentators. That myth has now been exposed. In fact, our most elevated national team – the Australian cricket team – has demonstrated that it stoops to deliberately conceived cheating (not spur of the moment) in order to win. And now these revelations are obvious, the national scandal that has followed, reveals how out of touch we have become with what has happened to our Society in this neoliberal era.

This was the front-page of the on-line edition of the Melbourne Age this morning. It is representative of the media hullabaloo that has followed revelations on Sunday that the Australian cricket team had deliberately cheated.

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Good-bye, GDP. Hello, six-part balance sheet? - via @wef

Good-bye, GDP. Hello, six-part balance sheet? - via @wef | Economics: Its History and Politics | Scoop.it

"The idea that Gross Domestic Product (GDP) is inadequate as a measure of economic well-being dates back to the 1960s, when environmentalists and feminist scholars pointed out some obvious shortcomings: the failure to account for environmental externalities and the failure to count valuable non-market services such as work in the home. But it is only in the past decade that the need to go ‘beyond GDP’ in measuring economic progress has become increasingly mainstream."

 
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Instability, Not Productivity, Is The Economic Problem

Instability, Not Productivity, Is The Economic Problem | Economics: Its History and Politics | Scoop.it
There is currently a big debate about productivity growth. Is it as slow as it has been measured or have changes in the economy led to growing measurement errors? If slow growth is real, what causes it?

I don’t claim to know but it is noticeable that periods of slow productivity growth often follow large macroeconomic shocks. After the oil-price eruption and subsequent stagflation of 1973 a decade of slow productivity growth followed in many leading economies. Then, as now, “structural” explanations were offered. One was that rapid growth of the labour force meant more workers were young and inexperienced! Recently, it has been argued that slow growth of the labour force means more marginal workers are being employed – equally implausible. Quite possibly productivity will pick up again as the global economy settles down, just as it did before.

But there’s the rub. The economy needs to avoid another shock. The real concern is that whether it is growing fast or slow the economy has become dangerously unstable and a succession of recessions is quite likely. To understand why we need to review some history.
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Seven Ways to Transform 21st-Century Economics — and Economists - via @EvonomicsMag

Seven Ways to Transform 21st-Century Economics — and Economists - via @EvonomicsMag | Economics: Its History and Politics | Scoop.it
No one can deny it: economics matters. Its theories are the mother tongue of public policy, the rationale for multi-billion-dollar investments, and the tools used to tackle global poverty and manage our planetary home. Pity then that its fundamental ideas are centuries out of date yet still dominate decision-making for the future.

Today’s economics students will be among the influential citizens and policymakers shaping human societies in 2050. But the economic mindset that they are being taught is rooted in the textbooks of 1950 which, in turn, are grounded in the theories of 1850. Given the challenges of the 21st century—from climate change and extreme inequalities to recurring financial crises—this is shaping up to be a disaster. We stand little chance of writing a new economic story that is fit for our times if we keep falling back on last-century’s economic storybooks.
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Experts Weigh In On Five Arguments Against a $15 Minimum Wage | The Tyee

Experts Weigh In On Five Arguments Against a $15 Minimum Wage | The Tyee | Economics: Its History and Politics | Scoop.it

"At the beginning of the month Ontario raised its minimum wage from $11.60 an hour to $14 — 21 per cent — en route to hitting $15 next year, and the heart rates of those arguing about the impact seem to have jumped at least as much.

Social media, newspapers and talk shows have become wage debate battlefields.

Groups against Ontario’s hike argue a $15 minimum wage will hurt the economy, cost jobs and bring other catastrophes; those who support it say it’s an overdue step forward to improve life for workers.

Leor Rotchild of Canadian Business for Social Responsibility, a business association dedicated to improving corporate social and environmental sustainability, said the discussion has turned into a political debate when it should be a business conversation."

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Why Inequality Predicts Homicide Rates Better Than Any Other Variable - Evonomics

Why Inequality Predicts Homicide Rates Better Than Any Other Variable - Evonomics | Economics: Its History and Politics | Scoop.it
17-year-old boy shoots a 15-year-old stranger to death, apparently believing that the victim had given him a dirty look. A Chicago man stabs his stepfather in a fight over whether his entry into his parents’ house without knocking was disrespectful. A San Francisco UPS employee guns down three of his co-workers, then turns his weapon on himself, seemingly as a response to minor slights.

These killings may seem unrelated – but they are only a few recent examples of the kind of crime that demonstrates a surprising link between homicide and inequality.

While on the surface, the disputes that triggered these deaths seem trivial – each involved apparently small disagreements and a sense of being seen as inferior and unworthy of respect – research suggests that inequality raises the stakes of fights for status among men.
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A leading economist has a plan to heal our fractured societies

A leading economist has a plan to heal our fractured societies | Economics: Its History and Politics | Scoop.it

"Minouche Shafik, director of the London School of Economics, argues that we need to weave a new kind of safety net.


6. Restore progressivity in tax systems. There is clear evidence of a declining trend in tax progressivity in OECD countries, particularly in the 1980s and 1990s. Tax reforms have raised exemption thresholds and lowered top personal income tax rates, placing a greater tax burden on the middle class. Similarly, corporate tax rates have fallen on average across the OECD (from 32% on average in 2000 to 25% in 2015) while taxes on consumption have risen (the average standard rate of VAT increased from 18% in 2000 to 19.2% in 2015). This has had negative effects on social cohesion and social mobility. In more unequal countries, the ability of children to do better than their parents tends to be much reduced. Restoring progressivity in tax systems and enabling greater social mobility will do much to heal divisions in society."

 
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How Western civilisation could collapse

How Western civilisation could collapse | Economics: Its History and Politics | Scoop.it
By Rachel Nuwer
18 April 2017
This story is featured in BBC Future’s “Best of 2017” collection. Discover more of our picks. 
The political economist Benjamin Friedman once compared modern Western society to a stable bicycle whose wheels are kept spinning by economic growth. Should that forward-propelling motion slow or cease, the pillars that define our society – democracy, individual liberties, social tolerance and more – would begin to teeter. Our world would become an increasingly ugly place, one defined by a scramble over limited resources and a rejection of anyone outside of our immediate group. Should we find no way to get the wheels back in motion, we’d eventually face total societal collapse.
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Capitalism will eat democracy -- unless we speak up | Yanis Varoufakis - YouTube

Capitalism will eat democracy -- unless we speak up | Yanis Varoufakis
 
 
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Exit, Brexit, Voice And Loyalty

Exit, Brexit, Voice And Loyalty | Economics: Its History and Politics | Scoop.it
When thinking about the state of affairs in Europe, including post-crisis developments and Brexit, Albert Hirschman’s classic book Exit, Voice and Loyalty comes to mind. Hirschman noted two ways in which customers can respond to a firm´s deteriorating performance: switch to another product, or complain to management. Thus, they can exit or they can exercise voice.

The basic model discussed by Hirschman can also be applied to nation states and perhaps also to international organizations. In the cases of nation states Hirschman’s model brings for example into focus the problems created by freedom of movement between radically discrepant economics and politics. In the case of international organizations, when are the benefits to join greater than the costs associated with membership? If dissatisfied, when would a member state use voice and when would it consider exit?
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How Hayek's Evolutionary Theory Disproves His Politics - Evonomics

How Hayek's Evolutionary Theory Disproves His Politics - Evonomics | Economics: Its History and Politics | Scoop.it
As an evolutionist critiquing the field of economics, I felt like a disciplinary outsider until I encountered the work of Friedrich Hayek. The Austrian economist was himself critical of Walrasian general equilibrium theory and proposed a radical alternative: Economic systems are a form of distributed intelligence that evolved by cultural group selection. They work without having been designed by anyone.
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It Takes a Theory to Beat a Theory: The Adaptive Markets Hypothesis - Evonomics

It Takes a Theory to Beat a Theory: The Adaptive Markets Hypothesis - Evonomics | Economics: Its History and Politics | Scoop.it
We need a new narrative for how markets work. We now have enough pieces of the puzzle to start putting it all together.
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Economists Are Obsessed with “Job Creation.” How About Less Work? - Evonomics

Economists Are Obsessed with “Job Creation.” How About Less Work? - Evonomics | Economics: Its History and Politics | Scoop.it
In 1930, the British economist John Maynard Keynes predicted that, by the end of the century, the average workweek would be about 15 hours.  Automation had already begun to replace many jobs by the early 20th century, and Keynes predicted that the trend would accelerate to the point where all that people need for a satisfying life could be produced with a minimum of human labor, whether physical or mental.  Keynes turned out to be right about increased automation.  We now have machines, computers and robots that can do quickly what human beings formerly did laboriously, and the increase in automation shows no sign of slowing down.  But he was wrong about the decline of work.
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