The Affluent Society

by John Kenneth Galbraith

As a consequence, in the interpretation of all social life, there is a persistent and never-ending competition between what is right and what is merely acceptable. In this competition, while a strategic advantage lies with what exists, all tactical advantage is with the acceptable.

Because familiarity is such an important test of acceptability, the acceptable ideas have great stability. They are highly predictable. It will be convenient to have a name for the ideas which are esteemed at any time for their acceptability, and it should be a term that emphasizes this predictability. I shall refer to these ideas henceforth as the Conventional Wisdom.

But the economic consequences of national armies in the age of nationalism have been almost infinitely small as compared with the damage wrought by feudal, marauding or crusading armies in the centuries before.

Henry George (1839–1897) was, like Marx, the founder of a faith, and the faithful still assemble to do honor to their prophet. Like Adam Smith, he made clear his view of the social prospect in the title of his remarkable book: Progress and Poverty. An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth.

In one respect, Henry George was radically more optimistic than Ricardo. On his title page were the further words The Remedy; this phrase had no place in the Ricardian lexicon. If land were nationalized—more precisely, if a tax were imposed equal to the annual use value of real property ex its improvements, so that it would now have no net earnings and hence no capital value of its own—progress would be orderly and its fruits would be equitably shared.

There remains, however, the man whom many regard as the uniquely American economist, Thorstein Veblen (1857–1929).

Finally, in his immortal The Theory of the Leisure Class,8 Veblen dramatized, as no one before or since, the spectacle of inequality. The rich and successful were divorced from any serious economic function and denied the dignity of even a serious or indignant attack. They became, instead, a subject for detached, bemused and even contemptuous observation.

The ostentation, waste, idleness and immorality of the rich were all purposeful: they were the advertisements of success in the pecuniary culture.

The position of the Social Darwinists was different. Economic society was an arena in which men met to compete. The terms of the struggle were established by the market. Those who won were rewarded with survival and, if they survived brilliantly, with riches. Those who lost went to the lions. This competition not only selected the strong but developed their faculties and ensured their perpetuation. And in eliminating the weak, it ensured that they would not reproduce their kind. Thus the struggle was socially benign and, to a point at least, the more merciless, the more benign its effects, for the more weaklings it combed out.

The birthplace of these ideas was nineteenth-century England, and their principal source and protagonist was Herbert Spencer (1820–1903). It was Spencer and not Charles Darwin who gave the world the phrase “the survival of the fittest.” Spencer believed that acquired as well as inherited traits were genetically transmitted.

The rise of Social Darwinism in the United States coincided with the rise of the great fortunes. It was a time not only of heroic inequality but of incredible ostentation.

If Social Darwinism was to work, there all too obviously had to be some curtailment of popular government. To enforce acquiescence in misfortune, there also needed to be a constabulary whose loyalty, most likely, could only be ensured by social security and seniority.

The specter that for long haunted the economist was the monopoly seeking extortionate gains at the public expense. This dominated his thoughts. The less dramatic figure, the businessman seeking protection from the vicissitudes of the competitive economy, was much less in his mind. That is unfortunate, for the development of the modern business enterprise can be understood only as a comprehensive effort to reduce risk. It is not going too far to say that it can be understood in no other terms.

Indeed, it is possible that the ancient art of evading work has been carried in our time to its highest level of sophistication, not to say elegance. One should not suppose that it is an accomplishment of any particular class, occupation or profession. Apart from the universities where its practice has the standing of a scholarly rite, the art of genteel and elaborately concealed idleness may well reach its highest development in the upper executive reaches of the modern corporation.

When men are unemployed, society does not miss the goods they do not produce. The loss here is marginal. But the men who are without work do miss the income they no longer earn.

It still seems more satisfactory to say that we need the goods than to stress the real point, which is that social well-being and contentment require that we have enough production to provide income to the willing labor force.

The family which takes its mauve and cerise, air-conditioned, power-steered and power-braked automobile out for a tour passes through cities that are badly paved, made hideous by litter, blighted buildings, billboards and posts for wires that should long since have been put underground. They pass on into a countryside that has been rendered largely invisible by commercial art. (The goods which the latter advertise have an absolute priority in our value system. Such aesthetic considerations as a view of the countryside accordingly come second. On such matters, we are consistent.) They picnic on exquisitely packaged food from a portable icebox by a polluted stream and go on to spend the night at a park which is a menace to public health and morals. Just before dozing off on an air mattress, beneath a nylon tent, amid the stench of decaying refuse, they may reflect vaguely on the curious unevenness of their blessings. Is this, indeed, the American genius?

Moreover, if efficiency is no longer a prime criterion, tariff policy will have to be resolved on the basis of how far we should go in making trade the handmaiden of larger national policy or what part compassion should play in easing the problems of distressed industries or areas.

The Benthamite test of public policy was “what serves the greatest happiness of the greatest number,” and happiness was more or less implicitly identified with productivity. This is still the official test. In modern times, the test has not been very rigorously applied. We have somewhat sensed though we have not recognized the declining importance of goods. Yet, even in its deteriorated form, we cling to this criterion. It is so much simpler than to substitute the other tests—compassion, individual happiness and well-being, the minimization of community or other social tensions—which now become relevant.

Much more than decisions on economic policy are involved. A system of morality is at stake.

The meagerness of the payments is related to attitudes toward production. If production is all-important, then there should be no source of income that is a close substitute. People should be required to work and produce—or else. And, in fact, nothing has so haunted the discussion of social security legislation as the specter of the worker who lives amiably off his unemployment compensation check and contributes nothing to society in return. So payments have been kept at levels relevant to survival rather than to comfort.

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 to fail to proceed thence to the next tasks, would be fully as tragic.