Keynes Got There First: The Paradox of the Great Depression

I pulled this quote of John Maynard Keynes from Paul Krugman, who posted lecture slides from his course on the Great Recession. It encapsulates the great paradox of the modern economy: how can we have all of the physical and human capital that we have ready to serve us and yet it lies idle? This thought struck me when first studying the Great Depression: how come if we still had all of our stuff (don't accuse me of having been too articulate) we were so poor? What happened? It's not like a physical catastrophe occurred that wiped out all of our stuff.  Alas, Keynes got there first. No surprise, I guess. Anyway, think on this: 

This is a nightmare, which will pass away with

the morning. For the resources of nature and

men's devices are just as fertile and productive

as they were. The rate of our progress towards

solving the material problems of life is not less

rapid. We are as capable as before of affording

for everyone a high standard of life—high, I

mean, compared with, say, twenty years ago—

and will soon learn to afford a standard higher

still. We were not previously deceived. But to-

day we have involved ourselves in a colossal

muddle, having blundered in the control of a

delicate machine, the working of which we do

not understand. The result is that our

possibilities of wealth may run to waste for a

time—perhaps for a long time.

Keynes, "The Great Slump of 1930"