Applied Dynamic Economics by Kurihara Kenneth K.;

Author:Kurihara, Kenneth K.;
Language: eng
Format: epub
ISBN: 1460982
Publisher: Taylor & Francis Group

CHAPTER 8

ACHIEVING AND DIFFUSING ECONOMIC AFFLUENCE *

Mankind has come a long way from the day when economic scarcity was regarded as an immutable law of nature, and when the sheer struggle for subsistence was the common concern of people everywhere. Indeed, until relatively recently we had been taught to look upon poverty, unemployment and underconsumption as unfortunate but unavoidable. For it was not until the appearance of Keynes’s General Theory that ‘the paradox of poverty in the midst of plenty’ was explained in a way that left no doubt in the minds at least of economists that a potentially wealthy society need not allow itself to become actually poor enough to save only as much as can be offset by laissez-faire investment.1 Having initiated the historic shift from the classical ‘economics of scarcity’ to the modern ‘economics of potential plenty’, as D. Dillard aptly describes,2 Keynes went further to envisage a much wider diffusion of economic abundance than was thought possible or desirable by most of his contemporaries.

My purpose in this essay is to explore macro political-economic ways and means of achieving and diffusing affluence—beyond the technical confines of growth economics3 and distribution theory, and from the vantage point of post-Keynesian thinking. Such an exploration may be found particularly relevant to underdeveloped economies that are trying to achieve a measure of affluence both absolutely and in relation to what K. Galbraith has chosen to call ‘the affluent society’.4

I. ACHIEVING ECONOMIC AFFLUENCE

For the majority of nations and individuals in the real world the primary problem is one of achieving a measure of affluence, although diffusing economic affluence will become more and more urgent as time goes on. It seems, therefore, useful to amplify Keynes’s view of the fundamental factors governing ‘the pace at which we can reach our destination of economic bliss’,1 as follows:

1. The rapid growth of population has hitherto been welcome as expanding market demand or military manpower, but henceforth population growth will have to be adjusted to capital growth for maximum per capita income and continuous full employment while giving greater emphasis to eugenics subsequently. The community’s basic choice between work and leisure governing the size of a labour force will be altered increasingly in favour of leisure as population growth is better adjusted quantitatively and qualitatively to the other conditions of economic progress. Here economics, sociology, technology, medical science and family ethics would all have to join in a concerted effort to manage man’s propensity to procreate as rationally as educated families in any quarter of the civilized world are already doing today.

2. That the warless state of human affairs is a social as well as economic desideratum is easy to see, but its realization calls for far more political wisdom and moral courage than nations and individuals seem to possess at present. The milieu of a lasting peace is necessary for expanding trade throughout the world, for greater confidence in the future, for maximum private initiative and risk-taking, and for avoiding unproductive investment in armaments as

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