Why capital is still scarce and the economic problem unsolved - Insights from the General Theory

In an essay published in 1930 against the backdrop of the Great Depression, J.M. Keynes vigorously defended the idea that, thanks to capital accumulation, the economic problem of mankind would be solved or almost so within a century. The evolution of his thinking would later show him more nuanced in this respect. This article brings together the elements of The General Theory published in 1936 that concern capital accumulation and the conditions under which its scarcity would disappear in the long term. For capital scarcity is linked to the economic problem in several ways. Firstly, because it gives its owner the privilege of deducting from the national income, to the detriment of the share due to labour, more than the remuneration that would be sufficient for capital to be allocated to production if it were simply not scarce. Secondly, because by making capital more expensive, this rent weakens the incentive to invest and effective demand, which on the one hand weighs on economic growth and employment, and on the other pushes back the horizon beyond which capital would cease to be scarce. The article thereby unveils overlooked yet essential features of the General Theory regarding the role of money and macroeconomic policy.