Customer Reviews

The Affluent Society

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Galbraith's book is certainly thought-provoking & worth reading. His arguments are well thought out, and his writing is wryly witty. Even if you disagree with his views, as many have, it's worth a read.

Galbraith starts the book off by reviewing how many early economic ideas were created in periods of scarcity, and that the notion of scarcity may not appropriate for today's age of mass affluence. Those with vested interests in production (i.e. large businesses) still cling to the "conventional wisdom" that increased production equals progress, even though goods are now abundant and our basic material needs have been satisfied. To stimulate further demand, corporations must resort to salesmanship and advertising. If advertising stopped, demand would fall, production would drop, and unemployment would rise; thus, business continue to focus on increasing production to ensure their own survival.

There are other threats to production. Economic cycles may result in a depression. Poorly managed firms may have to lay off workers. As a result, people -- and especially politicians --focus on economic growth to avoid these insecurities. Growth is something that both the rich and poor will vote for, since they both want to keep their jobs and acquire more goods. Growing out of a recession also seems promising. The net result is that society as a whole focuses on increasing production by private industry.

Next, Galbraith shifts his view from private industry to the public sector. He does this by introducing the idea of social balance, which asserts that as private spending increases, public spending should increase to match. For example, if factories build more cars, more money needs to be invested in public roads. Unfortunately, private goods are sold via advertising by companies that can react quickly to changes in demand. In contrast, public investment by governments reacts much more slowly, and typically lags private spending and investment, due to regulations, bureaucracy, and voter's general aversion to new taxes. The result is a world rich in private goods but poor in public ones: beautiful cars driving on poor roads, well-dressed kids in the crumbling public school, neighborhoods with beautiful homes but polluted parks.

So what to do? Galbraith's proposed solution is that we should invest in our economic infrastructure: our parks, our roads, our educational system, long-term scientific research, police, and the like. To fund this, he emphasizes sales taxes, which reduce consumption, and make those who consume a lot pay for it. To alleviate poverty and inequality, Galbraith also proposes to expand unemployment insurance so that one could choose not to work, yet still be able to get by. In his view, this would allow more people to reduce their work week, or not work at all, or to be able to focus on work they really enjoy.

Although this is certainly a liberal view & may not be feasible, his views certainly were eye-opening and thought provoking. For that reason, I recommend the book.

If you agree with Galbraith's notions on economics you may find this a seminal work. If you disagree with him you will no where find a better spar for your own ideas. (Friedman spent an entire book analyzing Galbraith) Love it or hate it The Affluent Society looms large in American economic thought of the 20th century. The book itself is dedicated primarily to re-assessing the role of production in an economy of increasing affluence. Economics long ago acquired the unhappy designation as "the dismal science." This was derived from the observation by all famous early economists that economic life for the masses was inevitably harsh. Ricardo, Smith, and Marx all agreed that while a minority might enjoy abundance the majority were doomed to struggle for their very economic survival. As early as the 1950s Galbraith made the very simple point that the economic prospects of the masses are no longer dark. The average worker could (and still does) expect reasonable wages, a constant supply of luxury goods, and free time to enjoy these things. The modern economy is no longer a battle for simple survival but rather one over what an individual's share of excess production should be. Some reviewers have commented that the specifics in The Affluent Society have become dated. Indeed automotive tail-fins are no longer the common automotive add-on they once were, but the underlying questions remain valid. In the economy of 150 years ago to claim that suffering was inevitable seemed fair, for it was the state of the masses. In the economy of the present where economic deprivation is no longer the norm, to claim some must suffer while the majority live in relative affluence suddenly appears cruel.
A social scientist who argued the changes of the last 200 years were not relevant to analysis would be laughed at in any other field. Unequivocably our economic priorities have changed during that time. The Affluent Society provides a history of that change, a look at how our failure to adapt has led to a number of social problems, and suggests how we might better organize economic priorities in the present. It is no small acheivement.

There is a glaring blind spot among Conservative economists who speak breathlessly about freedom and distribution of power yet completely ignore the threat brought on by the disparity of wealth. The growing gap was what Marx saw as the eventual destroyer of Capitalism. Conservatives, on the other hand, see the disparity not as a problem but as a solution to pure democracy where a street sweeper has the same one vote as a CEO. Extreme wealth puts the power back in the hands of the people most capable of wielding it.

Mr. Galbraith takes a look back at the evolution of economics starting with the early belief that the average worker would always earn just enough to survive and perhaps raise a family. Later Herbert Spencer expounded his Social Darwinian view of economics that has shown a resurgence in the last few decades. The original view was that social programs literally allow inferior genetic lines to procreate and dilute society. It was the collapse of the stock market in the 1930's that put Social Darwinism on the back burner. Although Marx correctly predicted the collapse, the economy recovered and the increasing disparity never created a revolution in the United States. This, however, may have been thanks to the many wealth redistribution programs created after the Great Depression. The author also points out that there is more of a physical separation between the economic strata's and ostentatious displays of wealth have become at best passé at worst vulgar.

The book punches a hole in the theory that productivity declines as worker security increases. One need only look at the dramatic rise in both production and security after World War II. As Mr. Galbraith points out it's always the OTHER guy who should give up security. Corporations and corporate heads work to create a broad cushion of support for themselves while decrying additional safeguards for workers as wasteful of needed capital. Although the author generally supports growth over wealth distribution as a way to improve society he is far more pragmatic than Conservative economists. Unlike right wing ideologists, Mr. Galbraith recognizes that the market often focuses on the things society needs least. There will always be a need for balance between public and private funding in particular for large scale research projects and public goods like education that the market shows a lack of interest in. The author doesn't seemed to have the same mystical reverence for market forces that some economists exhibit. He also has little respect for the federal reserves ability to even out market fluctuations using monetary policy (conservatives) or fiscal policy (liberals). Even with his support of business growth Mr. Galbraith recognizes that growth obsession can be a dangerous thing for, among other things, creating increasingly unmanageable debt in a heavily consumption based society.

There seems to be a definite slant in economics towards the desires of the business class which includes worshipping at the altar of deregulated, free market Capitalism. John Kenneth Galbraith is a refreshingly non-ideological view of economics which actually recognizes that perhaps it's better to offer opportunities to the poor rather than kicks to the teeth to encourage growth out of poverty.

Interesting and original analysis of the major trends in economic thinking that have shaped our times; as relevant today as 40 years ago when it was written; a great work by a thinker. Contains interesting discussion of the causes of the depression and businesses cycles and also, as a treat, amusing reflections on the habits and rationalizations of the rich through the ages.

A true classic that is as relevant to explaining today's society as that in which Galbraith wrote it - and never more so than Galbraith's argument that we need a better social balance between private and public expenditure. As the gap grows between the urban rich and poor, he notes, more of the rich are able to opt out of public services such as schools, police and transport. With urbanization a dominant theme of the coming decades, it's worth being reminded of Galbraith's observations on how public expenditure on urban infrastructure is generally presented in political discourse - "at best, public services are a necessary evil; at worst, they are a malign tendency against which an alert community must exercise eternal vigilance" - which, as he points out, leads to some interesting contradictions - "Vacuum cleaners to ensure clean houses are praise-worthy and essential in our standard of living. Street cleaners to ensure clean streets are an unfortunate expense. Partly as a result, our houses are generally clean and our streets generally filthy."

Galbraith's philosophical arguments against extreme wealth inequality are both increasingly unfashionable and increasingly urgent; the trend he identifies - "few things are more evident in modern social history than the decline of interest in inequality as an economic issue" - has hardly been arrested as the world has globalized. Galbraith quotes Tawney as noting that people who think they should have unfettered enjoyment of their inherited money do not generally think that others should have unfettered enjoyment of their inherited physical strength or cunning - "Those who dread a dead-level of income or wealth... do not, it seems, dread a dead-level of law and order, and of security of life and property" - an observation that's highly applicable to inequality considered on the scale of the modern global economy.

Galbraith's pithy and wryly amused writing style has stood the test of time as well as the arguments. Perhaps my favourite example comes when Galbraith is commenting on the concern that social security makes poor people idle: the "ancient art of evading work", he says, is not the preserve of any particular class or occupation, and "the art of genteel and elaborately concealed idleness may well reach its highest development in the upper executive reaches of the modern corporation."

Forget the fact that Galbraith is more readable than any other economist ever, this is an important work, full of insights into not only the condition of the post WWII economy, but also the history of economic thought and why economists think the way they do (and avoid thinking about real issues). Most economic theory is based on the notion of scarcity, yet we live in a society of generalized affluence. The economy changed, and continues to change, yet orthodox economists are, for the most part, still thinking about the economy as if it was 1800. As relevant today as it was when it first came out. I became an economist because of this book (though not an orthodox one).

C. Clark

John Kenneth Galbraith was one of the great public intellectuals of 20th century America. He advised Presidents and politicians, wrote best-selling books, taught economics at Harvard, appeared on TV, and served as the U.S. Ambassador to India. Nevertheless, mainstream economists looked down their noses at him. They scoffed at his sweeping generalizations. They questioned his technical prowess, noting that his books had no math. Many suspected that he was a "mere sociologist" masquarading as an economist.

These critics may have been jealous of Galbraith's literary fame and towering public profile. In any event, they certainly misconstrued his significance in American intellectual life. Galbraith's great gift as a thinker was his razor-sharp eye for cant. He knew where economic ideas came from, how they supported vested interests, and where they diverged from the plain facts of everyday life -- and he conveyed these lessons to educated general readers in elegant prose. In the end, he may have been a gadfly and critic, not a model builder -- but so what? If mainsteam economists taught us how to think about markets, Galbraith taught us how to think about mainstream economics.

"The Affluent Society" is one of his masterpieces. Written in the 1950s, ideas fly from its pages, touching on everything from Ricardian economics to oligopolies and inflation. The central idea, however, is arresting. Galbraith argued that modern economics was forged in the austere world of the 19th century, when national economies struggled simply to feed and clothe their populations. Sensible at the time, the core assumptions of economics were carried over to a different century facing a different set of problems. In the 20th century, supermarkets bursted with unnecessary soaps and cereals, car models changed every year, and billions of advertising dollars were spent on campaigns to convince consumers that they needed items they never even knew they wanted.

Galbraith argued that, with the problem of scarcity more or less solved, society was free to loosen the connection between income and labor, and to spend more money on public goods such as schools, hospitals, and clean air. He rejected as anachronistic the objection that such measures would reduce economic efficiency by mandating higher taxes or rewarding idleness: what was the value of having an efficient economic system if the goods it produced answered no urgent human needs? Galbraith thought that society should focus on the development of human capacities and the building of decent communities and workplaces, and not fret unduly over allocative efficiency.

Galbraith was wrong about many things, but he was always thought-provoking and mind-expanding. The continuing force of "The Affluent Society" will be clear to anyone who reflects on the crazy popularity of SUVs or tallies up the money we lavish on pets -- in a day and age when American cats get better medical care than most African children, it's safe to say that the supply side problem has finally been solved (at least for us and our pets). The book should be read by all serious students of economics or 20th century American society, and it belongs on any bookshelf of social criticism next to the works of Thorstein Veblen and C. Wright Mills.

In this book, Galbraith speaks of broad strokes while we can only hope for small change. He talks about a government that modifies the very engine of production - the intake and the RPM, in order to best serve the people. This reads like brazen statements, in a world where we can't even get a modestly sensible health care system through the Corporate censors.

This book ignores the politics and machinations that limit progress, and argues the core - the philosophical base - of liberal economic policy, something you don't find enough of. It also happens to make a strong case, to be sure.

The crux of the book, and the primary application of the term Galbraith (arguably) coined - 'Conventional Wisdom' (to mean: accepted knowledge that is not true and holds back real progress) - is the fallacy of how production is measured, and the error of using the measure of production as a measure of society itself.

Limits to productivity, Galbraith argues, was the limiting factor to man's advance according to 19th century economists -- Malthusian Theory for example. Now, we have mastered productivity, and rather then scale or broaden the gains, we choose to manufacture new wants to the detriment of our society.

Galbraith writes with an elegance you rarely find. His writing can touch on every emotion and every point is arrived at with precise reasoning.

This is the type of book where you can get a wealth of knowledge prima facie, but get even more once you analyze the possibilities. It's a book that will make you think and may well affect how you think.

This should be standard reading for anyone interested in economics and how the world operates. The arguments Galbraith presents here are as salient today as they were when he penned this 50 years ago.

"We are here in one of the contexts where circumstance has marched far beyond conventional wisdom. We have seen how general are the efforts to join the New Class and how rapid is its expansion. We are not here establishing a new economic and social goal but identifying one that as already widely if but tacitly accepted." --- JKG

'The Affluent Society' by John Kenneth Galbraith is a study of how modern nations have mostly eliminated absolute poverty and why the conventional wisdom is preventing human progress. It is only by defeating conventional wisdom that greater human happiness may be obtained.

Galbraith begins with a lucid examination of the history of economic theory. How the original economists, Smith/Ricardo/Malthus, were quite dismal about the plight of the masses. Ricardo's Iron Law of Wages states that any gain in wages will result in greater competition for land. Malthus believed that any increase in the food supply would be eliminated by an increase in population. In both cases the laborer was forced to accept their fate and know that nothing could be done. Even Marx, who's economic theory was based off of Ricardo, believed that laborers were helpless as long as a capitalist system remained. The classical understanding of economics was government intervention inherently hurt the people it intended to help.

Then came Keynes! With the great advancements in wealth due to capitalism and Keynesian economics it was finally possible to extend economic security to the masses. Nevertheless, conventional wisdom has resisted. People focus on production, specifically within the private realm, even though it is no longer the most pressing need. The country needs to focus on full employment. There needs to be a social balance between private and public production.

Galbraith ends the books with a proclamation: We need to invest in human capital above all else. Anything that obstructs this and can be dealt with by the government should be dealt with by the government. We should greatly increase spending on education. We should eliminate rural and urban pockets of poverty (Slums/Appalachia). We should do everything reasonable to eliminate perpetual poverty.

What this will mean in the long run is the creation of a 'New Class'. This New Class, today's white collar middle class, will not perform meaningless toil. They will find meaning in their work and a higher level of happiness. All the while the proletariat and peasant classes will slowly, but surely, be eliminated. No Marxist revolution is conceivable if everyone in society is comfortable.

Sidenote: Most of what Galbraith discusses in the middle of the text is exceptionally outdated. His thoughts on inflation turned out to be justified but also rather pessimistic. Paul Volker showed that monetary policy does have the political will power to stop inflation. His fear that American consumers may eventually grow tired of frivolous goods also proved to be pessimistic. Changing American values have continually kept pace with expanding production. (Although his view on consumer debt turned out to be strikingly clairvoyant).

Finally, Galbraith's writing style is... different. On a technical level his writing is as good as any other economist. He perfectly blends theory with accessibility. It would be easy to argue that Paul Krugman's writing style is largely an imitation of Galbraith. But his humor is another story. He constantly tells exceptionally dry, hokey jokes throughout his work. Only the wonkish will enjoy them.