The Affluent Society by John Kenneth Galbraith
My rating: 3 of 5 stars
Let me plainly state that I am neither an economist nor a person who ever reads about economics. Econ 101 was one of the few classes in college that I came close to failing. None of it past the first lecture on the syllabus made any sense.
But I want to understand economics. And I do grasp that it’s one of the most important drivers of contemporary civilization. That’s why I read The Affluent Society by 20th-century progressive economics theorist John Kenneth Galbraith.
The first half of the book was a bit confusing for me. In it, Galbraith reviews economic history from the past two hundred years. Since I have so little background knowledge in this arena, I struggled to follow what he was getting at, and no doubt, a lot of what he said went over my head.
However, when he started getting into the division between the conservative and liberal ideas about the economy, mainly after World War II, I found myself on much better footing. So while there is no doubt a lot of this man’s wisdom ultimately failed to penetrate my inhospitable brain, here’s what I did get from his book. Keep in mind that things have changed a lot since 1976, when the book I read was published.
First, most people have basic needs met in an affluent society like ours. Since our economy depended on production (especially before we began sending so many manufacturing jobs to cheaper labor in foreign countries), the manufacturing of wants to fill production demands was crucial. With our government’s help, American businesses have been ingenious and wildly successful at manufacturing these artificial wants.
Second, there is a divide between personal needs and public needs. Since our private needs were primarily met by the mid-20th century, surplus monies could have been spent on shared needs, like infrastructure, schools, police protection, and healthcare. However, these areas were chronically underfunded, even then, due to campaigns to convince citizens that taking care of public concerns was ripping them off instead of helping them out. With more significant funds spent for public services for everyone, individuals lost private money through taxes that could have been spent on alternative, private pleasures like fancier cars, clothes, and entertainment.
Finally, while most of us suffer from poor funding for things like schools and highways, the poor are the big losers. Galbraith spends a great deal of time explaining that it’s not possible, and never has been, that everyone will be able to hold down a job to increase our production. The elderly, the disabled, and the mentally ill are often incapable. And he admits that every society contains a few people who refuse to work, whether from laziness or whatever reason unknown to the rest of us. But he asks, is forcing these people to work for a living helping business at all? He argues that it’s not; it’s more expensive to force people to work at jobs due to their lack of output and absenteeism. Instead, he argues that it’s better to pay a living through negative taxes (like the earned-income credit) to keep such people and their children from homelessness and starvation.
He dispassionately outlines the differences from the conservative perspective and makes a case for his liberal view. However, he also acknowledges the missteps and wrong turns common among liberal thinkers and politicians of his day.
It was an enlightening but disturbing book for me. I would recommend it to anyone like me who wants a clearer understanding of the principle drivers of the insanely gigantic and intricate economic system we are all entangled in today.
0 Comments