&gt; &quot;What Keynes missed is that free markets generate new desires. In Akerlof and Shiller’s words, markets &#x27;do not just produce what we really want; they also produce what we want according to our monkey-on-the-shoulder tastes.&quot;  In other words, producers can act jointly more effectively than consumers can in exploiting weaknesses of human psychology. This seems to be a fair statement with a lot of empirical support.<p>An alternative theory for explaining Keynes&#x27; mistake is just that people&#x27;s consumption is driven by desire for relative status, a zero-sum game, and therefore people will continue to work to consume more no matter how productive they become.  But what is the evidence that free markets <i>generate</i> these desires rather than merely fulfill them?  Yes of course marketing will have a hand in determining which goods are high-status, but I don&#x27;t know much reason to believe that people would stop consuming for status in the absence of marketing.  (To wit, there was plenty of conspicuous consumption historically by the rich before there was any sort of marketing industry.)  They would just consume a different arbitrary basket of good.