The sheer force of accumulation

Keynes' starting point is the sheer power of growth over longer periods of time. Capital accumulation - the growth of equipment, machinery and other productive capacity- is enormous, as even slow rates of growth compound and feed on themselves. Over a hundred years this capital deepening alone produces staggering growth in wealth, and generally incomes too. And we have actualy seen that since he wrote in 1930.

If capital increases, say, 2 per cent per annum, the capital equipment of the world will have increased by a half in twenty years, and seven and a half times in a hundred years. Think of this in terms of material things--houses, transport, and the like.

The other major force for growth is technical progress, which is visible all around us every day. I am writing this on an iPad in the park, a device which would almost have seemed miraculous just a few years ago.

In quite a few years-in our own lifetimes I mean-we may be able to perform all the operations of agriculture, mining, and manufacture with a quarter of the human effort to which we have been accustomed.

Technological progress has if anything been far faster than Keynes imagined. He thought that this could lead to temporary unemployment. But he thought this would not last.

For the moment the very rapidity of these changes is hurting us and bringing difficult problems to solve.Those countries are suffering relatively which are not in the vanguard of progress. We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great dealin the years to come--namely, technological unemployment. This means unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour. But this is only a temporary phase of maladjustment.