The true meaning of “In the long run we are all dead”

Many commentators use John Maynard Keynes’ quotation “In the long run we are all dead” to suggest that Keynes, and by association those economists today who urge a moderation of government austerity policies, didn’t care about the future. The implication is that Keynes and Keynesian economists are recklessly short termist and would happily buy some temporary economic benefit at the price of ruinous long term debt increases and great damage to future generations.

The British professor of history Niall Ferguson made this implication explicit in an answer to a question at a recent conference in California. He went further and attributed Keynes’ supposed lack of interest in the future to the fact that he had no children, because he was gay. Ferguson has made an unreserved apology for his remarks. He acknowledged that Keynes (whose earlier gay life is not in dispute) was later married and his wife, the Russian ballerina Lydia Lopokova, suffered a miscarriage.

Ferguson is popular on the conference circuit because he makes controversial comments. With the academic credibility of a Harvard professorship this frankness gives him a ready and high paying audience. But his academic reputation lies in his distinguished work in financial history. He is not an economist and his emphatic forecasts about the inflationary consequences of high US federal debt and quantitative easing have been completely wrong.

But the more important point is that he, like so many others, clearly misunderstands the point that Keynes was making. Here is the context for Keynes’ quotation:

The long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again.

Keynes wrote this in one of his earlier works, The Tract on Monetary Reform, in 1923. It should be clear that he is not arguing that we should recklessly enjoy the present and let the future go hang. He is exasperated with the view of mainstream economists that the economy is an equilibrium system which will eventually return to a point of balance, so long as the government doesn’t interfere and if we are only willing to wait. He later challenged that view in his most important work The General Theory of Employment, Interest and Money (1935). arguing that the economy can slip into a long term underemployment equilibrium from which only government policy can rescue it.

Unemployment is the great scourge of economic life. It is far more pervasive than the hyperinflation that Fergusson and others worry about. Hyperinflation is very rare and usually occurs following wars or other major dislocations. We know how it can be stopped e.g. Bolivia’s 1985 hyperinflation was stopped in ten days – this was one of the few 20th century hyperinflations not to be caused by war or revolution. It is a very damaging but rare disease.

Unemployment causes enormous harm to individuals and families, reduces long term potential output as people lose their skill and motivation and can last for many years. The appalling rates of unemployment in southern Europe are doing great damage right now, as well as storing up serious political problems for the future (once again I have to cite the fact that the Nazis achieved power in Germany on the back of mass unemployment, not inflation). It is in this sense that economists should not let themselves off the hook by saying that these countries will somehow eventually return to full employment if we are just patient. This is both immoral and incorrect.

Keynes wrote about the future of mankind and the possibilities that greater economic prosperity might bring. He cherished a high quality of life and wanted to preserve a capitalist system capable of delivering this against the danger of a collectivist tyranny. It is nonsense to imply that he had no conception of the value of the future. And those many economists today who argue that Europe is needlessly wasting human life and capabilities are not reckless about the future either. They have both economic theory and history on their side to argue that we should not let mass unemployment continue.

14 Responses to The true meaning of “In the long run we are all dead”

  1. Simon – In addition to economic theory and history, there appears to be a growing body of data on recent events which supports your argument. For example, How Austerity Kills, DAVID STUCKLER and SANJAY BASU (

  2. The question of unemployement is perhaps not the main problem. Because of the technology evolution is is a mirage to have natural full employement. The real problem for a country is to get money. Then you can help people with subsidized jobs ….

  3. Thank you professor fo this “mise au point” so necessary. The case of Keynes is, unfortunately, not unique. As the “invisible man” of Adam Smith intstrumentalized so much, while the great thinker used it only ONCE. The same about the quote “the benevolence of the butcher” and his “interset ” see self-interest – these quotes are used, picked up from the others, but the writtings were these lines come from are not read, thus a wrong interpretation became a legend and everbody believe it true. Thank you professor to fix this misinterpration of Keynes. You would be better to write a book about all these kinds of misinterpretations in economics – there are plenty – I am interested by such a study.

    I like this word of J. K. Galbraith ” The conventional view serves us to protect from the painful job of thinking ” and this one of A. Huxley ” Most human beings have an absolute and infinite capacity for takings things for granted”. We, economists need to go back to classics to better understand our field and to have the courage to recognise our “bounded ratioanlity”.

  4. Interesting blog. And right on target. Keynes was jousting against the arguments of equilibria arguments in economic thought. He’s making a prescient point about the limits of mathematics in modeling changing economic systems. How to model such system is still something, I think, that is not understood well.

    What strikes me as odd about this, is why didn’t Ferguson know this. He is after all more an economic historian than anything else.


  5. “…forecasts about the inflationary consequences of high US federal debt and quantitative easing have been completely wrong.”

    “Completely wrong” may not be accurate.

    Inflation is indeed low for the CPI, the Consumer Price Index, because The Consumer has seen almost none of the money pumped into the economy, hence demand for goods and services by The Consumer has not increased, hence low CPI (coincidentally, $50-oil recently and $3-natural gas for years may have helped).

    However, there is inflation in the stock market (from around 7000 low to over 18000) and in real estate. The next bust in not unthinkable, I think.…/economy/income-inequality-obama/

    • I use “inflation” in the sense that it is used generally in economics, to refer to a general increase in prices, as measured by the RPI, CPI, GDP deflator or other index. By that definition inflation and inflationary expectations have remained low and consistent or below the Fed’s target, as we would expect from the similar experience of Japanese quantitative easing. The same happened in the UK also, where inflation remained low (after a temporary rise following a fall in the pound sterling).

  6. This is to the point, and makes matters clear.Economics is the art of choice,and it is not easy,or pleasant. In Keynes’s day, the choice was between the deflation-unemployment syndrome of the Classical model,and the masterly inactivity it imposed, and the possibility of quicker recovery through interventionist policies.Keynes surely preferred a continuous mild boom, with its inflationary prospects to the spectre of unemployment. Now, both unemployment and inflation have their adverse effects, and it is like choosing between death by hanging and death by drowning. Economists have their fashions and fancies like every one else.Very few are really objective. The nature of technology today is such that we will have permanent underemployment . It is yet to be demonstrated that Keynesian solutions will work in the long run, without leading to stagflation, or without resulting in too much government.We have to move beyond money, interest, prices, wages to the nature of technology and its decisive role in the economy. Nor can we forget that most of international liquidity is today related to speculation, not genuine economic or trade activity. And both these are totally beyond the control of any authority. These are post-Keynesian developments.

  7. To my mind, Keynes was a pragmatist who reasoned beyond the specific economic processes to consider (holistically) the need for political, economic and social stability, and the consequences of their absence. The 1930s anglo saxon economy was not going to self-adjust (at least not quickly) and economic intervention was valid. Yet, there is a deeper point. The appearance of a short-term focus is a fallacy. The intention was to create stable expectations (of interest rates, for instance) that had a clear impact on the long-term. It is the failure of ISLM usage etc. to take account of expectations, during the so-called Keynesian era, that is one of the main gripes of the Keynes purists. In short, Keynes was thinking of the long-term too.

  8. What Keynes and most Progressive economists fail to grasp is how insidiously destructive wealth transfer is to the incentives, motivations, morals, and ethics of the society. Progressive taxes on the productive diminish their incentive to continue to be productive. Subsidies (wealth transfer) to the less productive rob them of incentive to learn to be more productive. When you reduce incentives on both sides of the equation, the entire society becomes less productive, economic growth declines in the face of rising social welfare costs, debt spirals out of control, and the “Ponzi scheme” social welfare programs become unsustainable. This is exacerbated by the introduction of birth control and abortion, which cut the birthrate by more than half at a time when more workers paying in were needed as more people were taking out of the system. The Progressive societies lack the productive human capital to sustain themselves.

  9. Capitalism is a more efficient means of wealth transfer, as it is a mutually agreed upon contract between and employer and an employee, in which the employer agrees to transfer wealth to the employee for his input, which contributes more to the productivity of the employers’ business than the cost of employing the employee, resulting in profits that replenish the capital consumed by the enterprise, and eventually economic growth, increasing the size of the economic pie.

    If you go down the list of the Forbes 400 Wealthiest Americans, put a face and a name on who the Top .1% are, and look at where their wealth is, you will find that it’s in the capital stock of most of the countries largest employers. As the stock market rose from the lows of 2009 to the high of 2015, the value of their stock rose with it, but that money didn’t go “into their pockets” because they didn’t sell their stock. They will be riding those stock prices back down as the stock market returns to normal relationships to book values and earnings. One wonders if anyone will sympathize there their loss of wealth, after demonizing them for the increase.

  10. I just want to ask what is the overall meaning of “In the long run we are all dead”?? Not just being a economist but to sum-up it all? THANKS

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