The Economics of Abundance

“The Economics of Abundance,” in Henry Hazlitt, ed. The Critics of Keynesian Economics. Princeton and London: Van Nostrand Co., 1960, pp. 126–130.


“Now in such a situation, in which abundant unused reserves of all kinds of resources, including all intermediate products, exist, may occasionally prevail in the depths of the depression. But it is certainly not a normal position on which a theory claiming general applicability could be based. Yet it is some such world as this which is treated in Mr. Keynes’ General Theory of Employment, Interest, and Money, which in recent years has created so much stir and confusion among economists and even the wider public. Although the technocrats and other believers in the unbounded productive capacity of our economic system, do not yet appear to have realized it, what he has given us is really that economics of abundance for which they have been clamoring so long. Or rather, he has given us a system of economics which is based on the assumption that no real scarcity exists, and that the only scarcity with which we need concern ourselves is the artificial scarcity created by the determination of people not to sell their services and products below a certain arbitrarily fixed prices. These prices are in no way explained, but are simply assumed to remain at their historically given level, except at rare intervals when “full employment” is approached and the different goods begin successively to become scarce and to rise in price.”

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