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The end of (economic) history

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  • Jean-Paul Fitoussi

    (Observatoire français des conjonctures économiques)

Abstract

Some papers, for reasons which remain at least partially obscure, leave a persistent trace in intellectual history. Such is the case with Keynes’ paper “Economic Possibilities for our Grandchildren”, although it never attracted much attention within the economic profession, besides reference here and there to the power of simple economic calculations: A possible explanation is that Keynes, in freeing himself from economic rigor, is attempting to unveil his moral philosophy. Because a great economist is not necessarily a great philosopher we should not ab initio expect the result to be at the level we are accustomed to in reading Keynes. What matters is not so much the way Keynes answers the questions he poses but the nature of the questions themselves. Could the very functioning of the capitalist system lead to the solution of the economic problem and hence to the end of capitalism itself? This paper sustains that the answers given by Keynes to these questions are grounded on three elements: arithmetic, the neurosis of capitalism and the communism of the elites. On the first element, Keynes is right; one may even argue that his reasoning anticipates Solow’s growth model. The second element is rooted in the context in which Keynes was writing and grounded on a false interpretation of Freud’s work which led him to a simplistic analysis of human needs. The third element unveils his aristocratic view of society. What is remarkable in “the economic possibilities” is the powerful intuition of Keynes and even more remarkable the nature of the questions he poses. Each and every economist should try to answer the question of the ends of the economic system and of its possible end. What is deceptive is the naivety with which Keynes deals with human needs and even more deceptive his arrogance and the questionable moral which goes with it.

Suggested Citation

  • Jean-Paul Fitoussi, 2007. "The end of (economic) history," Sciences Po publications n°2007-17, Sciences Po.
  • Handle: RePEc:spo:wpmain:info:hdl:2441/1161
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    Keywords

    secular growth; human needs; capitalism; economic systems; inequalities; capitalisme; inégalités; systèmes économiques;

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P17 - Economic Systems - - Capitalist Systems - - - Performance and Prospects

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