[silverquiet]

Keynes said something that has always stuck with me.

> Anything we can actually do we can afford

I find it increasingly paradoxical that supposedly, our collective economic capability routinely increases (implied by ever growing GDP), while our budget situation looks ever grimmer.

[bryanlarsen]

This is such a profound quote, but most people need more context to understand it. I certainly did when I ran across it a few years ago. I believe our society would be much better if more people did.

Here's a good explanation I found quickly via Google, I'm sure there are others: https://medium.com/mydex/we-can-afford-what-we-can-actually-...

[roenxi]

It is a good quote, but the article you link actually undermines it slightly. Keynes' words are relying on a non-expert in construction being confident that construction is easy despite the fact that the systems we use to measure cost-benefit indicating that it cannot or should not be done.

No evidence is mentioned that there was enough available in the way of bricks, mortar, steel, cement or labour. The banker quite likely hadn't checked any statistics or made any estimates. There is no particular reason to consider his opinion even informed on the topic. Britain had just had suffered around a half-million war casualties drawn disproportionately from their able-bodied labourers and their factories for things like steel and cement had probably suffered a few hard blows and were likely being run ragged.

They could have forcefully reallocated resources away from something people thought was more important towards building houses; but the issue that is being glossed over is if someone thought that there were higher priorities than building houses ... what if they were right? The thing about economics is prices aren't arbitrary, they encode a combination of how easy a good is to produce and how much demand there is for a good. They can't just be overridden expecting a good result without factoring in those things.

If Britain had some magic ability to just build whatever they want and there were enough resources available to do whatever then the empire wouldn't have collapsed shortly afterwards. They were way over-extended in terms of what resources they needed vs what they had available.

[bryanlarsen]

You're reinforcing the quote. You're questioning the conditional part of the quote, the "if we can do it" part. If they actually couldn't do it, then they couldn't afford it. And that's what Keynes said.

Your second criticism performs the standard hijack. The natural follow on is "if we can do it, and we can afford it, should we do it"? Should we do it is the right question to ask. Just because we can and we can afford it, doesn't mean we should do it. But far too many people try to squelch the debate by asserting that we can't afford it. We can afford universal health care or a modest UBI or a green new deal or whatever expensive thing that the left wants. Whether we should is the question, not whether we can.

[roenxi]

There isn't any evidence that they could do what Keynes was suggesting they could. I thought he was making the comment after the war, but I just looked at the date again and realised they were in the middle of WWII at the time! They most certainly did not have spare resources and couldn't possibly afford to be building houses with them. The example he's giving is a case where they couldn't afford it because they couldn't do it. If he'd picked an example where they could do it but people were claiming they couldn't afford it that'd be different and better. But if they could do something we'd probably also find that the financial figures suggesting they could in fact afford it.

"You can afford what you can do" is a truism - if you can do something, the financial system will tell you that you can afford it except if something really weird is going on. If the resources were there to build the houses then the prices would shuffle around until it was also affordable.

[departed]

It's my first time reading this quote, and the context you provide definitely helped. Thanks.

[bigbadfeline]

> Keynes > Anything we can actually do we can afford

Yes, but Keynes also pointed out the result of that: "In the long term we are all dead" :)

Seriously, extraordinary claims require extraordinary evidence, and as much as the economics mainstream likes this to be true nobody ever presented convincing evidence in support of it.

> our collective economic capability routinely increases (implied by ever growing GDP)

Just in the last 3 days, there were several posts on HN that pointed out the inadequacy of the GDP as a measure of economic development, and they presented serious evidence.

[departed]

Thanks for the profound quote.

I feel that in a sense, "we" (the collective society) can do a lot because of the productivity growth from technology "afford" (enable) us.

In another sense, what "we" (part of that society -- an individual, a group, a government) can do is limited by what we can "afford" (pay). We cannot command the bricks and mortar and steel and cement and labor and architects to build houses and infrastructure without some form of compensation -- money for the architects and builders and cement/steel/mortar/brick makers and movers to exchange for food, drink, and shelter.

And in this grim budget situation, "we" (the government) are running out of ways to ask for productivity (goods and services for healthcare, education, welfare, defense) because we are out of ways to compensate the providers.

What can a government do then?

- force them to offer productivity without equal compensation (communism, colonialism, slavery, forced labor, cheap labor, unequal trade agreements, etc.)

- promise to repay them later (government bonds)

- give them something that they think is valuable but is less so and decreasingly so (money printing)

- encourage giving without compensation (charitable work and donation)

- repay them with compensation collected from those who benefited the most from the economic productivity growth (taxing)

I think the quote "We can afford what we can actually do" encourages the audience to think more about what we (as a society) can do and less about how we (the individual) are compensated.