Towards the Solution of the Economic Problem? – On the Non-Revolutionary Relationship between Working Time and Productivity

Abstract

The increase of productivity we faced in the last hundred years was the basis for fundamental predictions on how a rising standard of living would reduce working time in the long run. Keynes predicted in 1930 that the economic problem would be solved and “mankind will be deprived of its traditional purpose” (Keynes 1931[1930]: 366). It is quite obvious that Keynes prediction is wrong when it comes to working time. This article takes a closer look at the developments of working time and productivity in Austria, Germany and Switzerland. Since the beginning of the 1970s, in all three countries under investigation, working time reduction ended. By discussing reasons for the abrupt ending of working time reduction this article proposes a theoretical model on the development of working time, wages, and productivity.