In 1930, British economist John Maynard Keynes published an essay titled “Economic possibilities for our grandchildren”. In it he predicted that in a hundred years capitalism would produce machines capable of doing most of society’s work. We’d happily be working only three hours a day or a 15 hour week, and everyone would be living in “economic bliss”. The pace at which society could achieve this “will be governed by ... our determination to avoid wars and civil dissensions”.

Keynes assumed that, because capitalism produces vast wealth, it must be capable of satisfying human need. On the surface, his thoughts seem sensible. After all, hasn’t material scarcity been the cause of poverty, suffering and burdensome work throughout human history? What, then, is so outlandish about the belief that a world of abundance and colossal productive capacity would do away with human privation and usher in an era of great leisure?

For four decades, “Keynesianism” was gospel for those who believed we could achieve a humane society without revolution. His argument that unemployment and crisis could be kept to a minimum by government spending seemed to be valid. The West, emerging out of the Great Depression and World War II, experienced rising living standards, longer holidays and shorter working days for most.

Yet almost a century after Keynes penned this essay, his comments come across in varying degrees as comic, utopian and tragic. In Australia – by some measures the wealthiest country on the planet – unpaid overtime rather than unlimited leisure is the norm for millions. For those who hold one of Keynes’s 15 hour per week jobs, life is anything but liveable.

In the rest of the world, more than 3 billion people scrape by on less than US$2.50 per day. In the United States there are people with two jobs who still can’t afford a roof over their heads. On the other hand, in Greece and Spain unemployment rules.

Where Keynes went wrong was not in his prediction of abundance. It was his other assumptions – that what is produced would be shared fairly and that war and economic crisis would be a thing of the past – that were off the mark.

Karl Marx, writing prior to Keynes, provided a more accurate analysis of the system. He argued that there were structural contradictions built into capitalism, which meant it could never provide a decent life for the majority of the world’s population.

The bulk of the world’s productive resources – mines, factories, telecommunications and energy infrastructure, office buildings, farmland and equipment – are owned or controlled by a minority of parasites. They invest their money not to produce things that will improve the lives of the majority, but to make ever greater profits for themselves.

Profit is not a natural reward for the already wealthy; it is extracted from those they employ. The workers produce goods or services of a value far greater than what the capitalist pays them in wages. This exploitation, Marx showed, is the heart of capitalism.

There is more to it. Capitalists produce commodities for sale on the market. The competition to sell goods (to gain “market share”) forces the capitalists continually to attempt to produce more cheaply and minimise their costs. They have an interest in paying workers as little, and working them as hard, as they can get away with.

The introduction of machines illustrates the point. Keynes thought machines would serve humanity. But their introduction has instead led to workers being subordinated to them, hour after hour performing repetitive and mind-numbing tasks. It doesn’t matter that hundreds of times more goods are produced – factory workers’ working days remain long because the goal of capitalist production is profit, not the satisfaction of people’s needs.

If a business doesn’t innovate and exploit its workers as effectively as its rivals, it will be left behind. Perhaps not enough people need or want its products, or there are not enough people who can afford them. Its inability to gain market share, or to sell at a price that guarantees a profit, will make it go bust.

Goods that millions of people would find useful, or even desperately need, remain unsold and therefore unused. For example, in early 2008 the head of the UN World Food Program reported, “There is food on shelves but people are priced out of the market. There is vulnerability in urban areas we have not seen before.”

This process results in the whole system regularly descending into chaos. A chain reaction ensues in which companies go broke, unemployment rises and living standards of workers fall. In the UK, that fall has been 6 percent in the past five years.

These crises cannot be avoided by better government policies; in the anarchy of the market there is no way to plan where labour will be employed based on considerations of human need. So there is no peaceful upward march to increasing general prosperity.

This year, while one in five people endure extreme poverty, Forbes magazine could report that the world’s 1,426 billionaires have increased their “net worth” to $5.4 trillion. This reality makes a mockery of Keynes’ expectation that they would abandon the idea that accumulating wealth is “of high social importance” and that “the love of money as a possession … will be recognised … [as] semi-criminal”.

Keynes desired a world for his grandchildren without “civil dissensions”, in which humans could relax a great deal. But it was Marx before him, and with greater insight, who saw that eventual social peace could come only through a great revolutionary disturbance.

A world such as Keynes hinted at in his essay can come about only when all the resources of society are used to satisfy human need. For that, a great struggle over their control will be necessary. Only when, as Marx wrote, “the knell of capitalist private property sounds [and] the expropriators are expropriated”, will our grandchildren have the chance of the sort of life Keynes envisaged.