The Affluent Society
Encyclopedia
The Affluent Society is a 1958
book by Harvard
economist
John Kenneth Galbraith
. The book sought to clearly outline the manner in which the post-World War II
America was becoming wealthy in the private sector
but remained poor in the public sector
, lacking social and physical infrastructure, and perpetuating income disparities. The book sparked much public discussion at the time, and it is widely remembered for Galbraith's popularizing of the term "conventional wisdom
".
Many of the same ideas were later expanded and refined in Galbraith's 1967 book, The New Industrial State
.
Former U.S. Secretary of Labor Robert Reich
called it his favorite on the subject of economics. The Modern Library placed the book at #46 on its top 100 non-fiction books of the 20th century.
Galbraith writes:
Galbraith ends the book with another appeal to the importance and need for investment in educating people:
1958 in literature
The year 1958 in literature involved some significant events and new books.-Events:*August 18 - Vladimir Nabokov's controversial novel Lolita is published in United States.*First volume of The Civil War by Shelby Foote is published....
book by Harvard
Harvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...
economist
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
John Kenneth Galbraith
John Kenneth Galbraith
John Kenneth "Ken" Galbraith , OC was a Canadian-American economist. He was a Keynesian and an institutionalist, a leading proponent of 20th-century American liberalism...
. The book sought to clearly outline the manner in which the post-World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
America was becoming wealthy in the private sector
Private sector
In economics, the private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the state...
but remained poor in the public sector
Public sector
The public sector, sometimes referred to as the state sector, is a part of the state that deals with either the production, delivery and allocation of goods and services by and for the government or its citizens, whether national, regional or local/municipal.Examples of public sector activity range...
, lacking social and physical infrastructure, and perpetuating income disparities. The book sparked much public discussion at the time, and it is widely remembered for Galbraith's popularizing of the term "conventional wisdom
Conventional wisdom
Conventional wisdom is a term used to describe ideas or explanations that are generally accepted as true by the public or by experts in a field. Such ideas or explanations, though widely held, are unexamined. Unqualified societal discourse preserves the status quo. It codifies existing social...
".
Many of the same ideas were later expanded and refined in Galbraith's 1967 book, The New Industrial State
The New Industrial State
The New Industrial State is a 1967 book by John Kenneth Galbraith. In it, Galbraith asserts that within the industrial sectors of modern capitalist societies, the traditional mechanism of supply and demand is supplanted by the planning of large corporations, using techniques such as advertising...
.
Former U.S. Secretary of Labor Robert Reich
Robert Reich
Robert Bernard Reich is an American political economist, professor, author, and political commentator. He served in the administrations of Presidents Gerald Ford and Jimmy Carter and was Secretary of Labor under President Bill Clinton from 1993 to 1997....
called it his favorite on the subject of economics. The Modern Library placed the book at #46 on its top 100 non-fiction books of the 20th century.
Themes
- The "central tradition" in economics, created by Adam SmithAdam SmithAdam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...
and expanded by David RicardoDavid RicardoDavid Ricardo was an English political economist, often credited with systematising economics, and was one of the most influential of the classical economists, along with Thomas Malthus, Adam Smith, and John Stuart Mill. He was also a member of Parliament, businessman, financier and speculator,...
and Thomas Robert Malthus in the late 1700s and early 1800s, is poorly suited to the affluent post-World War II U.S. society. This is so because the "central tradition" economists wrote during a time of widespread poverty where production of basic goods was necessary. U.S. society, at the time of Galbraith's writing, was one of widespread affluence, where production was based on luxury goods and wants.
- Using production, or Gross domestic productGross domestic productGross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
as a measure of U.S. society's well-being omits important measures of social and personal well-being. GDP also neglects differences in output. For example, "An increased supply of educational services has a standing in the total not different in kind from an increased output of television receivers." Production has risen to its paramount but unwarranted status because it is held in grace by both Democrats and Republicans.
Galbraith writes:
- "On the importance of production as a test of performance, there is no difference between Republicans and Democrats, right and left, white and minimally prosperous black, Catholic and Protestant. It is common ground for the Chairman of Americans for Democratic Action, the President of the United States Chamber of Commerce and the President of the National Association of Manufactures.”
- American demand for goods and services is not organic. That is, the demands are not internally created by a consumer. These such demands - food, clothes, and shelter - have been met for the vast majority of Americans. The new demands are created by advertisers and the "machinery for consumer-demand creation" that benefit from increased consumer spending. This exuberance in private production and consumption pushes out public spending and investment. He called this the dependence effect, a process by which "wants are increasingly created by the process by which they are satisfied" .
- Galbraith believes America must transition from a private production economy to a public investment economy. He advocates three large proposals: the elimination of poverty, government investment in public schools, and the growth of the "New Class." Galbraith outlines the two types of poverty to better understand the causes and potential remedies. Case poverty is related to a specific individual and insular poverty is an island where nearly everyone is poor. To fund social programs, Galbraith believes in the expanded use of consumption taxes. The "New Class" consists of schoolteachers, professors, surgeons, and electrical engineers.
Galbraith ends the book with another appeal to the importance and need for investment in educating people:
- “Whether the problem be that of a burgeoning population and of space in which to live with peace and grace, or whether it be the depletion of the materials which nature has stocked in the earth’s crust and which have been drawn upon more heavily in this century than in all previous time together, or whether it be that of occupying minds no longer committed to the stockpiling of consumer goods, the basic demand on America will be on its resources of intelligence and education.”
See also
- Marshall SahlinsMarshall SahlinsMarshall David Sahlins is a prominent American anthropologist. He received both a Bachelors and Masters degree at the University of Michigan where he studied with Leslie White, and earned his Ph.D. at Columbia University in 1954 where his main intellectual influences included Karl Polanyi and...
articulated in 1966 the theory that hunter-gathererHunter-gathererA hunter-gatherer or forage society is one in which most or all food is obtained from wild plants and animals, in contrast to agricultural societies which rely mainly on domesticated species. Hunting and gathering was the ancestral subsistence mode of Homo, and all modern humans were...
s were the original affluent societyOriginal affluent societyThe "original affluent society" is a theory postulating that hunter-gatherers were the original affluent society. This theory was first articulated by Marshall Sahlins at a symposium entitled "Man the Hunter" held in Chicago in 1966...
.
- The Social Capital Foundation more recently resumed the concept as a facet of its analysis of the New Leviathan's strategies based on the "tripartite model of societal change" (1995).