Since Galbraith has appeared in two recent posts, a timely salvo came to me from Christopher Nowlin:
I happen to think that Galbraith’s 1958 classic, The Affluent Society, speaks more loudly to today’s social, economic, political and environmental troubles in North America than it did to post WWII America’s. I even gave a public talk to this effect in April of this year for the Necessary Voices Society in Vancouver, entitled The Importance of Culture to Climate Change. (You can find it on the web, if you’re interested).
Below is Christopher’s review:
written by Christopher Nowlin (2008),
author of To See the Sky (2008)
and Judging Obscenity (2003)
Review of John Kenneth Galbraith’s The Affluent Society (Riverside Press, 1958)
This year is the 50th anniversary of John Kenneth Galbraith’s bestselling The Affluent Society, and the dismal state of the planet’s health provides a perfect reason for reflecting on what this book had to say in 1958 about the “conventional wisdom” of economists and the “genius” of the American way of life. Galbraith was born and raised in rural Ontario, but became an American citizen shortly after obtaining his doctorate from the University of California at Berkeley. He spent a significant part of his professional life teaching economics at Harvard, editing Fortune magazine, and advising Presidents Franklin Roosevelt, John F. Kennedy and Lyndon B. Johnson on a variety of policy issues. He passed away only two years ago, at the age of 97, after having published numerous books, including The Culture of Contentment (1992), wherein he took aim at the tendency of America’s “contended majority” to prefer “short-run” inaction to “protective long-run action” in the face of impending socio-economic and ecological danger, including “global warming”.
The Affluent Society is especially relevant today, perhaps more so than it was for Americans living in the material abundance of the 1950s. Galbraith did not define specifically what he meant by an “affluent society”, but he did observe that, at the time, more died in America “of too much food than of too little”, and that fact seems sufficiently indicative of a society that is generally well-to-do. Galbraith was not unaware that established socio-economic institutions and customs in America had left a “self-perpetuating margin of poverty at the very base of the income pyramid”, and some of his observations and analyses in The Affluent Society showed his concern about this seemingly intractable problem.
One would be hard-pressed to contend that, as a general rule, the American standard of living has dipped over 50 years – if the subprime crisis has dented established patterns of production and consumption, the government’s predictable response has been to restore these patterns as quickly as possible through encouragement of more spending – so it is worth understanding what bothered Galbraith so much about the affluence of his society in the 1950s.
In short, Galbraith believed that American economic policy was preoccupied with the importance of producing material goods at the expense of attending to the public sphere – to health, education, sanitation, transportation, etc. Serious problems arise from such an orientation, pollution being just one, as he observes in the following passage:
The city of Los Angeles, in modern times, is a near-classic study in the problem of social balance. Magnificently efficient factories and oil refineries, a lavish supply of automobiles, a vast consumption of handsomely packaged products, coupled with the absence of a municipal trash collection service…made the air nearly unbreathable for an appreciable part of each year. Air pollution could be controlled only by a complex and highly developed set of public services – by better knowledge stemming from more research, better policing, a municipal trash collection services, and possibly the assertion of the priority of clean air over the production of goods. These were long in coming. The agony of a city without usable air was the result.
For Galbraith, increased production of material goods has been of central importance – the “bedrock” or “anchor” – to the conventional economist’s way of thinking, and the importance attributed to increased production has been buttressed, in his view,
by a highly dubious but widely accepted psychology of want; by an equally dubious but equally accepted interpretation of national interest; and by powerful vested interest. So all embracing, indeed, is our sense of the importance of production as a goal that the first reaction to any questioning of this attitude will be, “What else is there?”
As Galbraith saw it, profit-oriented American corporations and entrepreneurs have to sell the goods and services they manufacture and invent, and they do so by creating consumer desire (“want”) for these goods and services through advertising. Once consumer desire is created, a “dependence effect” kicks in. Non-essential, frivolous goods and services, gadgets or luxuries become regarded by consumers as essential – as the bare necessities of life. The Model T, the television, the cellphone, and the Blackberry could readily be grouped into this lot of consumer “goods”. Some of these products become socially institutionalized, and when their popularity inspires the erosion of publicly provided goods and services (such as public telephones), one can say that they become essential in fact. Galbraith took pains to argue that one sinister by-product of the dependence effect was a society chock-full of highly indebted individuals and families, precisely the societies of Canada and the U.S.A. today. As he succinctly portrayed the dynamics of mass debt creation:
It would be surprising indeed if a society that is prepared to spend thousands of millions to persuade people of their wants [through advertising] were to fail to take the further step of financing these wants, and were it not then to go on to persuade people of the ease and desirability of incurring debt to make these wants effective. This has happened.
Certainly it has, and the current American subprime crisis is but the tip of the iceberg.
Galbraith believed that the conventional economic wisdom exaggerates the importance of production to economic security in an affluent society. He wrote,
So compulsive, indeed, is the pressure to maintain output as a requisite of economic security that the economy is impelled to a level of performance which, as things now stand, it can sustain only with difficulty and at some cost and danger.
Now that was written 50 years ago, at a time when Galbraith could not likely have foreseen the dramatic changes in levels of industrial output and economic performance that have occurred not only in North America but in China and India, and there can be no question that, “as things now stand”, all of these economies can be sustained “only with difficulty and at some cost and danger.” The London-based journalist, Daniel Ben-Ami, wrote in his 50th anniversary review of The Affluent Society that many of the themes of the book anticipated “growth scepticism”, which Ben-Ami describes elsewhere as “sets of ideas which question the benefits of economic growth.”1 For Ben-Ami, such ideas themselves have become “the conventional wisdom” and it is time to launch a “counter-attack” against them.2 Indeed, Ben-Ami is an ardent opponent of growth skepticism. He believes, for example, that economic growth has enabled human beings to “become better able to control disease, curb the impact of the seasons and minimize the impact of natural disasters”, and has improved the environment “for millions of people”.3
I, for one, see the current state of global affairs much differently than Ben-Ami, and cannot help but wonder if he simply chooses to ignore the very real, historical correlations of supply and demand that have led to the most obvious ecological perils facing humankind today. Galbraith has not missed the mark. Political leaders in North America, Asia and elsewhere remain preoccupied with economic growth as the precondition for general societal well-being or “economic security”, to use Galbraith’s expression, and the destructive ecological consequences of this attitude are obvious throughout the world. But let us consider just one troubling spot of many, simply because it is drawing so much public attention of late, and rightfully so.
The tar sands mines in northern Alberta currently constitute the world’s largest industrial area. In 2006 Prime Minister Stephen Harper announced that “an ocean of oil-soaked sand lies under the muskeg of northern Alberta – my home province”, and he described the scale of oil sands development as “an enterprise of epic proportions, akin to the building of the pyramids or China’s Great Wall. Only bigger.”4 These observations were made with enthusiasm, even relish, and there is no question that the current Alberta and Canadian governments have a pro-development and pro-growth attitude in relation to the tar sands. It is also obvious, however, that the problem of “social balance”, as Galbraith understood that expression, is starkly real in the surrounding communities of Fort McMurray and Fort Chipewyan. As private and public oil companies around the world clamour to get a piece of the tar sands action so that their purses can expand and their associated domestic economies can grow, the health and welfare of the surrounding communities and wildlife is rapidly deteriorating, and the Athabasca River is sorely depleted. Josh Harkinson’s recent “Tar Wars”5 draws attention to the inflation and attendant homeless that has hit Fort McMurray, the remarkably high rate of cocaine-use among tar sands workers and Fort McMurray residents, the rise in prostitution, the decline in medical services, the increasing amounts of mercury, arsenic, and polycyclic aromatic hydrocarbons in the Athabasca River, the mutated and deformed fish being caught in Athabasca Lake, the deteriorated quality of duck, muskrat and moose meat being eaten, and “the tide of serious illnesses [that] has passed through Fort Chip’s tiny health clinic.”
Readers may decide for themselves whether the economic prosperity brought to the people living and working in the tar sands region, which has been created not only by a fear of peak-oil but by greed and a belief in economic growth and production at almost any cost, is worth all the social and environmental destruction that has accompanied it. But the overwhelming damage cannot be denied, and for this reason alone the concerns that Galbraith voiced in The Affluent Society and the suggestions he offered for improving the quality of life for all, remain so relevant today.
- Mike McCracken: Winner of the 2012 Galbraith Prize in Economics (March 8th, 2012)
- Call for Nominations: 2012 Galbraith Prize in Economics (December 12th, 2011)
- On Economics, We-Think, and the Twitterverse (April 22nd, 2011)
- Can cooperatives humanize our economy? (April 13th, 2011)
- A hip hop version of the Keynes vs Hayek debate (October 12th, 2010)