Poverty in the Midst of Plenty: Unemployment, Liquidity, and Keynes's Scarcity Theory of Capital

In light of the recent explosion of interest in Keynesian economics in the wake of grand-scale financial crisis, an interrogation of Keynesianism is crucial. An examination of the core concepts of Keynes's economics highlights the extent to which both the theoretical and conceptual architecture of The General Theory, and all things Keynesian, are tied to an to a historically specific understanding of capitalist civil society and its inherent contradictions. Keynes's political economy and the continued force of Keynesian ideas are rooted in a theory not of capitalism per se, but of the ongoing threat capital poses to "civilization." A detailed consideration of effective demand, unemployment, liquidity, and scarcity demonstrates the ways in which they contribute to what Keynes once called a scarcity theory of capital, according to which scarcity is necessarily socially produced in capitalism. This analysis helps us understand the tragic paradox of poverty in the richest societies in history, and the irrepressible anxiety that tragedy elicits.