In 1931, John Maynard Keynes published a short essay titled “The Economic Possibilities of Our Grandchildren,” in which he considered the feasibility of solving what he called “economic problems.” Keynes believed that the problem of scarcity should have been solved in the early 2000s. Decades of capitalist progress will enable society to produce the resources it needs to ensure a good standard of living for everyone. At this point, the problem is finding ways to spend hard-earned leisure time.

More than 90 years later, it’s fair to say that Keynes wasn’t wrong in his abundance predictions: The scale of production possibilities available to us in 2022 is far greater than he could have imagined in 1931. But “economic problems” haven’t gone away. In fact, there is an intense academic debate about how to define our major problems and how to deal with them. Is finding ways to create more growth still the key to a good society? Or is our main economic problem finding solutions to inequality and environmental degradation?

Recent contributions to this debate come from Jonathan Haskell, professor of economics at Imperial College Business School, and Steen Westlake, chief executive of the Royal Statistical Society. They are firmly in the “more growth” camp. their books, restart the future, Show that capitalism can be revitalized by promoting “further investment” in what they call “intangible capital.” This paper builds on their last collective effort, capitalism without capital, published in 2017. In that book, Haskel and Westlake outlined how the capitalist system shifted from investing in tangible capital such as machines and factories to investing in intangible capital such as software. Importantly, this capital behaves differently than a physical asset: the more it makes up the economy, the more it can change the dynamics of capitalism itself.

Haskell and Westlake argued in their most recent speech that the pace of these changes in capitalism has not matched the development of the institutions that govern the economy. For example, while high-quality innovation now comes from a unique combination of different types of existing capital, government R&D spending is still based on generating more entirely new research. The result of these “institutional lags” is sub-par investment in intangible assets and slow economic growth. Haskell and Westlake’s proposed solution is a series of institutional fixes that will drive new, intangible-rich economic prosperity.

The book is most powerful when it deftly explores policies that contribute to active investment. Here, as economists, the authors can play at home—discovering the best ways to squeeze the juice out of invisible oranges. In a series of policy discussions on cities, finance, competition and R&D funding, they outline how intangible assets can be used to generate growth, and what can be done to manage the ill effects of economic transition – such as growing disparities between towns and cities .

Even more controversial is their argument that activating the growth engine of intangible capital will provide a solution to our current political and economic woes. The idea relies on a theory of social change in which political and economic stability is essentially unlocked through growth. This growth, in turn, depends on finding the right institutional “code” to unlock the kind of market exchange that leads to prosperous, happy citizens and thriving societies.

It would be interesting to speculate how Keynes would view this argument. No doubt he was impressed by Haskel and Westlake’s vision of a prosperous society, harnessing the power of “invisible” investment to create giant leaps in productivity and output. One wonders, and he may also wonder whether further growth remains the main “economic problem” in a relatively historically rich era. This is especially true at a time when the direction of capitalist growth is increasingly inextricably linked to some of the overlapping, existential environmental crises we face.

Haskel and Westlake’s insights on how current institutions inhibit an economy dominated by intangibles are valuable. Their recommendations, if adopted, are likely to unlock further growth. But that alone won’t create a better future: “economic problems” are far more complex now than that.

reboot the future: How to fix the invisible economy Jonathan Haskel and Stian Westlake, Princeton University Press, £22, 320 pages