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Source link: http://archive.mises.org/8509/john-kenneth-galbraith-and-the-sin-of-affluence/

John Kenneth Galbraith and the Sin of Affluence

September 12, 2008 by

This year marks the 60th anniversary of John Kenneth Galbraith’s celebrated book, The Affluent Society, which sparked much public discussion at the time of its publication about disparities between ever-increasing private wealth and what Galbraith claimed was an impoverished public sector lacking in social and physical infrastructure. Murray Rothbard critiques Galbraith’s claims in the following article, which is excerpted from his monumental treatise, Man, Economy, & State. FULL ARTICLE

{ 12 comments }

Francisco Torres September 12, 2008 at 4:52 pm

At first sight, these latter charges appear contradictory, for capitalism is at one and the same time accused of producing too many goods, and yet of not increasing its production of goods fast enough.

This is not a contradiction in the mind of the leftist charlatan, the mountebank. Take for example, the criticism thrown at our “excessive prosperity” in the form of our supposed “addiction” to oil, or Climate Change, or other irrational canard. At the same time, when the price of oil rises, “Market Failure” becomes the chosen concept.

Deacon September 13, 2008 at 7:14 am

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#######

Galbraith was a BLITHERING
IDIOT!

This scribbler can make that
charge because I possess
about a 20-point advantage
in IQ over him.

And, Francisco Torres, you
have NAILED IT by your
above evaluation.

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#######

Deacon September 13, 2008 at 7:22 am

=======
=======

P.S.

Of course, the mentally
bright reader would
have caught the humor
in my claim of a superior
IQ, as compared to a
dead man…but you get
my point.

=======
=======

michael September 13, 2008 at 11:08 am

Deacon– I’m certainly willing to believe that your IQ is twenty points higher than a dead man’s. You are too modest. I would think thirty.

Let’s put it to work. One of Mr Galbraith’s blithers was the observation that the rich are continuing to get richer, while the poor get poorer. Murray Rothbard finds a problem with that because, unlike the rest of us, he needs a definition of affluence and poverty.

Where would you draw that line? Wouldn’t it be between those of us who are gaining ground, and those losing ground?

mikey September 13, 2008 at 11:27 am

Some nice things to say about Galbraith-
Tallest of all the economists, good for reaching things off the top shelf.
His books are much cheaper than sleeping pills, and definitely not habit forming.
Being Canadian made him perfect interview fodder for talent-free hacks at the CBC, keeping them off the welfare rolls.
Never claimed to be the fifth Beatle, unlike so many other Keynesians.

N. Joseph Potts September 13, 2008 at 2:57 pm

In his book Economics Peace and Laughter (1971), Galbraith explained the role of mathematics in economics with the passage,

“The oldest problem in economic education is how to exclude the incompetent. A certain glib mastery of verbiage—the ability to speak portentously and sententiously about the relation of money supply to the price level—is easy for the unlearned and may even be aided by a mildly enfeebled intellect. The requirement that there be ability to master difficult models, including ones for which mathematical competence is required, is a highly useful screening device.”

An explanation of this kind resonates with many economists of the Austrian persuasion, puzzling over how mathematics has gained such overweening importance in economic analysis.
It was meant to keep the incompetent out of the profession. Of course, it has succeeded only in keeping the mathematically incompetent (or unwilling) out.

Bruce Koerber September 13, 2008 at 8:40 pm

Like Keynes, Galbraith was the beneficiary of the confusion that he himself created!

Since economics had strayed from a scientific basis (by trying to force a round peg into a square hole) when it fell victim to ‘physics envy,’ it had very little defense against the fallacious proclamations of these ego-driven charlatans.

A nanosecond of exposure to the subjectivist methodology of Austrian economics would have caused these false statements and half-truths to perish and disappear from any further consideration. Woe unto us that the corrupt link between the political systems and the moral relativists was already a dominant feature of western civilization.

This corruption under the diseased ‘guidance’ of the economic and political quacks spread a pernicious materialism around the world.

Francisco Torres September 14, 2008 at 2:28 pm

Michael,
Let’s put it to work. One of Mr Galbraith’s blithers was the observation that the rich are continuing to get richer, while the poor get poorer.

No, his contention is that society has moved from being poor (i.e. satisfied in its basic necessities) to being “too affluent”. Rothbard merely asks a very reasonable question: what is “affluent” exactly, where does the threshold lie between one concept and the other. You seem to be, in the same manner as Galbraith, unwilling to precisely define these concepts, for deep inside you know (as he new) it would lead immediately to fallacy. Vagueness and obfuscations become your only answers.

Deacon September 15, 2008 at 1:51 am

#######
#######

Attn: Michael

I’d throw up an essay here,
which space I’d need to go
there, but I’ve been scolded
by posters–about not doing
that.

“Affluence” means getting
through life the happiest,
by one’s own standard of
what “happy” means
- the least troubled by
what life throws at you -
and without succumbing
to cyclical mass extinctions,
one of which is unfolding
now, because of both our
1) solar system passing into,
then through, the galactic
plane, and 2) Earths’s PRE-
SESSION of the EQUI-
NOXES.

Those two event do not
happen at the same time
but by counting in the
millions of years.

Our boats are about to
get rocked as they’ve
never been rocked (Oh,
don’t worry,all of us are
going to experience only
the beginning stages–but
we’ll be rocked nonetheless).

Anybody ever wonder why
this administration is spend-
ing as if there were no to-
morrow?

Well…?

I recall the Pentagon send-
ing a delegation to the Hopi
Indians, to learn about what
may be coming (in the mid-
Nineties, I think, they
traveled to the 4-corners
Indian reservation).

Why?

Got food? Got water?
Got shelter? Are you
well armed?

Oh! and Well!, which
means:

Oh, what the hell!
and
Well, who gives a damn!

#######
#######

michael September 15, 2008 at 9:07 am

FT– You seem to be at pains to score some points here. But your aim is wide. For instance you say “Rothbard merely asks a very reasonable question: what is “affluent” exactly, where does the threshold lie between one concept and the other. You seem to be, in the same manner as Galbraith, unwilling to precisely define these concepts, for deep inside you know …” etc. However your zinger is blunted by the fact that I did define the concepts. Affluent is when you’re gaining ground. And poor is when you’re losing ground. That’s very plain in my comment… and has the virtue of being easily and precisely locatable in the metrics.

You also say that “his [Galbraith's] contention is that society has moved from being poor (i.e. satisfied in its basic necessities) to being “too affluent”. But if we look at Galbraith’s actual book, we find the central concept phrased a bit differently. Check this out, from the flyleaf:

“In this important book a literate and versatile economist closely scrutinizes current ideas and attitudes in economics. He shows that they were worked out for a world far different from our own. This was a world of bleak poverty and one in which, except for a favored few, any other condition was unimaginable. Professor Galbraith shows how imperfectly and reluctantly the ideas appropriate to this world have been modified for application to a very different world– The Affluent Society– in which we live.

“The consequences are great. We are committed by obsolescent thought to a tense and humorless pursuit of goods and to a fantastic and dangerous effort to manufacture wants as rapidly as we make goods. We are impelled to invest too much in things and not enough in people. We threaten the stability and integrity of our society– what the author calls the social balance– by producing too much of some things and not enough of others. We are less happy than we might be and we jeopardize our safety.”

The thesis is that we concentrate too much on the gaining of individual wealth, and the purchase of those things that allegedly will make us happier once we own them, and not enough on creating a broadly prosperous society, one without the injustices of inequity and need that end up endangering the security of our world.

The book is well worth reading. If you want to critique it, it would be best to start by actually reading it.

Francisco Torres September 15, 2008 at 6:44 pm

Michael,
. Affluent is when you’re gaining ground. And poor is when you’re losing ground. That’s very plain in my comment… and has the virtue of being easily and precisely locatable in the metrics.

Losing or gaining ground against what? Compared to what? Measured by what? Money? Goods? The problem is that Galbraith is NOT talking about gaining ground or losing ground but of affluence as a moral issue.

But if we look at Galbraith’s actual book, we find the central concept phrased a bit differently. Check this out, from the flyleaf:

“In this important book a literate and versatile economist closely scrutinizes current ideas and attitudes in economics. He shows that they were worked out for a world far different from our own. This was a world of bleak poverty and one in which, except for a favored few, any other condition was unimaginable. Professor Galbraith shows how imperfectly and reluctantly the ideas appropriate to this world have been modified for application to a very different world– The Affluent Society– in which we live.

Michael, maybe you missed the point entirely – the flyleaf’s text actually reaffirms Rothbard’s criticism, by stating that Galbraith indicates we have passed from a state of poverty to one of affluence, and insinuating the later is somewhat just as bad, if not worse, than the former.

Continuing with the text:
“The consequences are great. We are committed by obsolescent thought to a tense and humorless pursuit of goods and to a fantastic and dangerous effort to manufacture wants as rapidly as we make goods. We are impelled to invest too much in things and not enough in people.”

Again, we come to the gist of Galbraith’s critique of the modern capitalist society – that somehow suppliers can “manufacture” wants in order to fulfill them. As Rothbard shows, this argument is nonsense considering the reduction to the absurd he provides: that suppliers would not have to worry about bankruptcy ever, as long as they keep “manufacturing” wants. Galbraith simply shows an irrational contempt for advertising, without understanding its workings.

Continuing with the text:
“We threaten the stability and integrity of our society– what the author calls the social balance– by producing too much of some things and not enough of others. We are less happy than we might be and we jeopardize our safety.”

This point merely indicates the pedantry behind Galbraith’s thinking, that he can state that there are goods that are produced too much and those that are not. It is nothing more than his opinion, but he argues from this point (begging the question in the process). The market already decides, flawlessly, though consumer choice, which products are to be produced more and which to be produced less or not at all.

Now, on to your comment:
The thesis is that we concentrate too much on the gaining of individual wealth, and the purchase of those things that allegedly will make us happier once we own them, and not enough on creating a broadly prosperous society, one without the injustices of inequity and need that end up endangering the security of our world.

In the first place, “We” are doing nothing – each person concentrates on his or her well being, as they should, since they own their bodies and minds. We are neither ants nor the Borg to say “we” do one thing or another – each person is different. Second, it has been that focus on individual prosperity which has lead to people’s prosperity. What you are talking about is focusing on the same, tired, tried (and failed) distribution of wealth scheme, that in the end rewards failure, sloth and dependence, while punishing drive, entrepreneurship and innovation, as a solution to a supposed “injustice” or “inequity” – without establishing objective parameters, obviously.

The book is well worth reading. If you want to critique it, it would be best to start by actually reading it.

I tried reading it after a recommendation from a friend and found it… unreadable. Whenever a book makes me angry for obvious logical mistakes, I simply stop reading.

Ed September 18, 2008 at 10:39 am

The person who makes $1000 values the next $1000. The person who makes $10 million values the next $10 million (true enough they have little interest in the next $1000, but so what). The things purchased move from basic food items to social power and control and prestige.

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