I am merely going to put this up without comment. This is my reply to a posting as part of the Macro Follies discussion thread amongst historians of economics. First is what I wrote and then below is the post I am responding to.
In reply to David Andrews let me just say this. It was not me who brought up pyramid building as a wasteful form of expenditure but Keynes. He was the one who mentioned it. He was the one who included pyramid building along with earthquakes and war as a means of generating wealth and prosperity in what he assumed everyone would agree would be the most unlikely of places. Pyramid construction may have had high utility for the Pharaoh who would spend eternity within. But for those who chiseled the stones and dragged them into place, it was all work and no economic return. A very exact metaphor, in my view, for so much of what passes for public works in the modern world.
It was the early classics who, in fact, pointed out that in an area ruled by some member of the nobility that the common people would be better off if the local baron was an absentee landlord. The ones who were around soaked up so much of the productive resources for their own form of wasteful excess that there was less left over for everyone else. Because classical economists understood a community can only consume what is produced – an apparently foreign concept amongst economists today – they encouraged value adding forms of production while it never crossed their minds that too much saving would cost jobs and lower the standard of living.
So you might wonder what had led me to such a comment. I had originally merely quoted a passage from The General Theory in which Keynes had said how an economy could enrich itself through things like war, earthquakes and the building of pyramids. To me it seemed obvious that building pyramids is not a means to prosperity. Read below:
Can you explain why you think that the pyramids are examples of ‘useless public works’? Strictly speaking they were useful, as best I understand, because they were tombs for kings. Perhaps there are better expenditures of labor power, but I suppose that many people think that they enriched the world of antiquity and continue to enrich our world even today. Of course there are issues about forced labor, but it seems to me that you prove some point Keynes made when he criticized those committed to a simplistic profit-loss formula. Have you seen them? (I have not, yet, much to my regret.) Are you saying that you think that the earth would be a better place in their absence?