2. Economic Possibilities for ourGrandchildren (1930)

1

We are suffering just now from a bad attackof economic pessimism. It is common to hearpeople say that the epoch of enormous economicprogress which characterised the nineteenth cen-tury is over; that the rapid improvement in thestandard of life is now going to slow down—at any rate in Great Britain ; that a declinein prosperity is more likely than an improve-ment in the decade which lies ahead of us.

I believe that this is a wildly mistaken inter-pretation of what is happening to us. We aresuffering, not from the rheumatics of old age,but from the growing-pains of over-rapidchanges, from the painfulness of readjustmentbetween one economic period and another.The increase of technical efficiency has beentaking place faster than we can deal with theproblem of labour absorption; the improve-ment in the standard of life has been a little tooquick; the banking and monetary system ofthe world has been preventing the rate ofinterest from falling as fast as equilibrium re-quires. And even so, the waste and confusion

358