The Affluent Society is a book I’ve seen quoted many times, and so it’s been on my reading list for a little while. I happened to find a secondhand copy recently, a first edition 1958 copy no less, and so I read it last week.
Galbraith’s central idea is that the production, or growth model of the economy is fatally flawed. It is based, he believed, on a good idea that was no longer relevant. For lifting the US out of poverty and meeting people’s needs, it had worked well. Now that people were affluent and their urgent needs were all met, it was foolishness. People aren’t happy, they work too hard, there is still great inequality, and there is a growing rather than shrinking income gap between rich and poor. “In recent times” he writes, “no problem has been more puzzling to thoughtful people than why, in a troubled world, we make such poor use of our affluence.” If he could say that in 1958, how much more so now.
If everyone’s primary needs for food and shelter and so on are already met, but your economy relies on ever-increasing sales, then it doesn’t matter what you sell as long as people keep buying. In order to keep buying, new wants must be constantly created. Not only that, consumer demand “comes to depend more and more on the ability and willingness of consumers to incur debt.” Until a credit scare of course, but we won’t get into that.
Not only does spending have to recklessly continue, it has to be private spending. Galbraith points out the flaw in the system that taxes are considered very bad in a liberal economy, and thus government spending is kept low so that taxes are at a minimum. This means that affluent people have polluted cities, poor infrastructure, overcrowded roads and trains, and lousy schools, because these things require public spending, and public spending is bad. Thus, in the logic of the economy, new TVs and cars are more important than schools and roads.
The growth model served it’s purpose, but the focus needs to be turned back towards equality, and towards wellbeing. This is something people are saying again as we reach unsustainable levels of debt and environmental overshoot. The Affluent Society remains highly relevant today, and I will summarise in Galbraith’s own words:
“To furnish a barren room is one thing. To continue to crowd in furniture until the foundation buckles is quite another. To have failed to solve the problem of producing goods would have been to continue man in his oldest and most grievous misfortune. But to fail to see that we have solved it and fail to proceed hence to the next task would be fully as tragic.”