Is Enough Enough?

If you feel troubled by society’s fixation on producing more and more stuff regardless of whether we need it, then The Affluent Society may offer some comfort. If you also labour in a dull job that does little for you other than pay the bills, this book offers some hope, albeit distant. And if you wonder why poverty persists and why the debt culture gripped us to choking point, and worry that we haven’t yet broken its hold, then read on.

As the veteran of many a tedious job and multiple shopping trips that left me feeling uneasy and empty rather than radiantly fulfilled as the glossy ads had promised, I was excited to discover that The Affluent Society had pinpointed where I was going wrong. Written in 1958 in an amusingly quaint style – the author uses words like ‘pornografia’ and the wonderful ‘boondoggling’ – and updated forty years later, it introduced concepts that would become part of the common discourse. The distinguished economist and philosopher Amartya Sen said of it, ‘It’s like reading Hamlet and deciding it’s full of quotations. You realize where they came from.’ Its author, J. K. Galbraith, was a great popularizer of economics whose interest lay in solutions. He grew up on a Canadian farm and was teaching economics at Harvard in his twenties; he worked on the New Deal in FDR’s administration and served as ambassador to India under JFK. His most famous book is The Great Crash (see SF, No. 21), about the 1929 collapse of the stock market. (Galbraith said that when he couldn’t find it in the La Guardia bookshop he was told by a sales assistant, ‘That’s certainly not a title you could sell in an airport.’) Often witty and always with the common good of society at its core, Galbraith’s cogent critique in The Affluent Society of how we run our economy still stands up today. Indeed his warning that ‘we do not really know the extent of the danger of [consumer credit and] . . . we would do well to keep an alarm signal flying’ foreshadowed the problems of the credit crunch. His main concept, conventional wisdom (it is often said that he coined the term but it appeared as early as 1838), describes ideas that are familiar, acceptable and stable, and have a willing audience. We like listening to familiar ideas – it serves the ego to hear ‘someone more famous share our conclusions’, and to be told what we already believe is ‘also a source of reassurance’ as it shows that we are not alone in our thoughts. Although adhering to conventional wisdom serves a purpose – ‘without it, economic and political life would be erratic and rudderless’ – clinging to it despite changed circumstances can be disastrous. The idea that governments should balance their budgets even in the face of economic collapse turned the 1930s slump into a prolonged depression. The current conventional wisdom – that economic growth (producing more stuff ) ‘continues to measure the quality and progress of our civilisation’ – is the key target of The Affluent Society. Galbraith states very clearly that by sticking to this erroneous idea we remain ‘anchored in a sea of nonsense’. He argues that humanity historically had three economic problems: production, insecurity and inequality. Production was for millennia the most important and overriding – goods were scarce: ‘poverty [therefore] was man’s normal lot and any other state was . . . unimaginable. This poverty was not the elegant torture of the spirit that comes from contemplating another man’s spacious possessions. It was the unedifying mortification of the flesh – from hunger, sickness and cold.’ What’s more, economic theory held that this state of affairs was inevitable – that humanity would forever live on the edge of starvation. As Galbraith says, ‘It is not surprising that production. . . was central to men’s thoughts.’ Insecurity was economic – the risk of losing one’s income. Recession and its terrifying cousin, depression, were recurring features of life. According to conventional wisdom, these ups and downs of the business cycle were normal and nothing could be done about them; in fact, intervening might even wreck the healing work of the recession and cause further and deeper recessions. There was supposedly nothing wrong with inequality either. Lavish parties in New York at the end of the nineteenth century, where ‘guests were given cigarettes wrapped in $100 bills which they lighted with a legitimate sense of affluence’, illustrated the chasm between the merchants, manufacturers and landlords on one side, and the working masses on the other. But theory said this was natural, the rich were merely enjoying the benefits of their competence in running land and capital efficiently, while the poor were being ‘punished for their incompetence or sloth’. Interfering with the system might mean the ‘survival of the unfittest’ – the school of thought known as Social Darwinism. And yet, something wasn’t right. Marx’s theories cast a fearful shadow: he predicted this state of affairs would be overthrown by bloody revolution. The world is different today. We have solved the production problem: due to centuries of technological advance and the build-up of capital, goods are now relatively abundant; after millennia of struggle this has caused a sustained advance in humanity’s material wellbeing: ‘Although there is much malnutrition in the world, more die in the US from too much than of too little . . . For many women and some men, clothing has ceased to be related to protection from exposure and has become like plumage, almost exclusively erotic.’ In short, we live in an affluent society. Inequality has also faded as an issue, if not completely evaporated. The increase in production was a rising tide that lifted all boats, so the servile class has greatly diminished. Now that the conspicuously wealthy do not have so many waiting on them, the anger Marx predicted towards them has failed to materialize, probably because they are now so remote from us. We don’t really care about Bill Gates’s $50 billion; we only care about our neighbour’s flashy car or £30,000 kitchen. However, the problem of inequality, although diminished, has subdivided: a large section of society still lives in absolute poverty, and the gap between top and bottom has markedly widened in recent decades. So we have solved one problem, greatly reduced the second and remain with the third. Yet we are still preoccupied with the one we have solved – production – even though we should take it for granted as we do the sun or water. Why is this? One reason is simply that growth translates into employment. In the absence of growth, we have recession and people lose their jobs. So growth solves the insecurity problem. But it does so in a corrosive way: we don’t seem to much care what we produce, just that we are producing more. This is as close to the world of ‘boondoggling’ – essentially digging holes in the ground and then filling them up again – as you can get. No wonder office workers who don’t enjoy their work but keep doing it because it pays the bills feel deadened and uninspired. Another reason is that vested interests fight tooth and nail to preserve the status quo and promote growth, using the smokescreen that it is the best way to address inequality (although it has done nothing for it for decades) and keep the economy moving. Finally, there is the one that arguably brought us to the brink of economic Armageddon in September 2008: the theory of consumer wants. This holds that people’s wants are unlimited, that once basic needs for food, clothing and shelter are satisfied, new, equally pressing desires rush in to fill their place, say for cars, iPods and expensive foreign holidays, and once those have been satisfied new ones materialize. These desires are insatiable and just as pressing as the need to be fed, and society must fulfil them. We also give consumers the ability to feed these desires by providing the necessary credit. And so begins the cycle of consumer need fulfilled by debt (a process in train since the 1950s, with the growth in consumer credit consistently outstripping that of income). What’s more, we cheer ourselves on in this endeavour – the more stuff we produce the more excited we get. Galbraith argues that the theory conveniently ignores the influence of advertising. We don’t have to be informed that we are hungry or cold he says, but we do have to be told that we need the latest gadget or running shoe – few new products appear without an accompanying ad campaign. The argument that the needs are urgent cannot stand if we ourselves have created the void we seek to fill. We are like ‘the onlooker who applauds the efforts of the squirrel to keep abreast of the wheel that is propelled by his own efforts’. This leaves us stuck on growth although it does nothing for the urgent problem that remains – poverty. Moreover, our fixation is eccentric – we focus on private goods but begrudge public spending, which leads to ‘private opulence and public squalor’. Meanwhile, we solve the insecurity problem through make-work jobs and debt. In sum, we ignore the poor, while working in jobs we don’t enjoy to make things we don’t want which we buy with money we don’t have. Galbraith’s proposed solutions have been taken up in various degrees around the world. To solve the insecurity problem he suggests a minimum income, far in excess of the subsistence pay provided by unemployment benefit. To solve poverty he recommends over-investment in the poorest communities where high-quality public services are most needed ‘to compensate for the very low investment which families are able to make in their own offspring . . . Poverty is self-perpetuating because the poorest communities are poorest in the services which would eliminate it.’ To solve the public/private spending imbalance he recommends expanding the sales tax – a sort of pay-as-you-go system. If you drive a car (private good) you are using the road (public good), so taxing your consumption of one will pay for provision of the other. For those in unsatisfying jobs he has no solutions alas. But he does identify a new class of people – those for whom work itself, not the pay, is the reward (e.g. teachers, nurses, academics) – and suggests that expanding this class is the most urgent problem we have. Galbraith’s solution of a minimum income regardless of whether one is working or not seems hopelessly impractical in this recession: you can picture the headlines – ‘Scroungers’ and ‘Who’s going to pay?’ His focus on advertising neglects admissions by those in the industry that they themselves don’t actually know how much effect on sales their campaigns have. Moreover, our desire to emulate our neighbour will always be strong, irrespective of advertising; and many products are launched successfully by word of mouth. But his broad thrust still holds true – we have enough yet act as if we don’t, and conventional wisdom and vested interests prevent us from changing. There are a few signs that the cycle is breaking down – the preoccupation with work/life balance is a new phenomenon, the concept of Gross National Happiness is gaining currency, and new research emerges regularly that shows that the more equal a society, the happier it is. However, these are drops in the ocean. There is no evidence yet that people en masse have developed an aversion to the cycle of consumerism, advertising and debt, despite the scary autumn weeks of 2008 when the credit crunch threatened to destroy it. There is every possibility we will spend further decades working to pay off our debts and paying lip service to the problem of poverty, rather than eliminating it and focusing on what Keynes called ‘man’s real, his permanent problem . . . how to use his freedom from pressing economic cares, how to occupy [his] leisure . . . to live wisely and agreeably and well’.

Extract from Slightly Foxed Issue 25 © Hugh Farmar 2010