The Affluent Society

Wealth is the relentless enemy of understanding

Nearly all, through all history, have been very poor

Few people at the beginning of the 19th century needed an adman to tell them what they wanted

We face here the greatest vested interests, those of the mind

The shortcomings of economics are not original error but uncorrected obsolescence

Negative thoughts cannot but strike an uncouth note in a world of positive thinking

The simple exigencies of poverty preclude the luxury of misunderstanding

“We are ruled by ideas and very little else,” John Maynard Keynes

The American Mood

The evolving economic society is destroying not only itself but all civilization as well. Such was the view of Thorstein Veblen (1857-1929), one of America’s greatest economists

“The law of the survival of the fittest was not made by man. We can only by interfering with it produce the survival of the unfittest.” William Graham Sumner, 1885. To this day a man who refuses a beggar and righteously observes, “I’m told it’s the worst thing you can do,” is still finding useful the inspired formula of Sumner.

The Marxian Pall

The inevitable impoverishment of the masses, the progressive enrichment of those who own the natural means of production, the inevitable conflict between wages and profits and the priority of the latter for progress. The conclusion of David Ricardo according to JKG.

The effect of the advance of the arts and the accumulation of capital on the average man, according to Marx: they “mutilate the labourer into a fragment of a man, degrade him to the level of appendage of a machine, destroy every remnant of charm in his work and turn it into hated toil…drag his wife and child beneath the Juggernaut… [bring] misery, agony of toil, slavery, ignorance, mental degradation….”

To him, as to any believer in a faith, the opponent is not merely in error but in sin.

Inequality

It is the increase in output in recent years, not the redistribution of income, which has brought the great material increase in the well-being of the average person.

The Paramount Position of Production

“Any device or regulation which interferes, or can be conceived as interfering, with [the] supply of more and better things is resisted with unreasoning horror, as the religion resist blasphemy, or the warlike pacifism.”

The unnatural triumph over nature.

Our preoccupation with production is, in fact, the culminating consequence of powerful historical and psychological forces—forces which only by an act of will we can hope to escape.

The Imperatives of Consumer Demand

Economic theory has managed to transfer the sense of urgency in meeting consumer need that once was left in a world where more production meant more food for the hungry, more clothing for the cold and more houses for the homeless to a world where increased output satisfies the craving for more elegant automobiles, more exotic food, more erotic clothing, more elaborate entertainment—indeed, for the entire modern range of sensuous, edifying and lethal desires.

The value system of economists:

1. The urgency of wants does not diminish appreciably as more of them are satisfied.
2. Wants originate in the personality of the consumer

As Adam Smith observed: “Nothing is more useful than water; but it will purchase scarce anything; scarce anything can be had in exchange for it. A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it.”

The Dependence Effect

Production only fills a void that it has created.

“Ours is a society in which one of the principal social goals is a higher standard of living…[This] has great significance for the theory of consumption…the desire to get superior goods takes on a life of its own. It provides a drive to higher expenditure which may be even stronger than that arising out of the needs which are supposed to be satisfied by that expenditure.” James Diesenberry

As a society becomes increasingly affluent, wants are increasingly created by the process by which they are satisfied.

In technical terms, it can no longer be assumed that welfare is greater at an all-round higher level of production than at a lower one. It may be the same.

It is far, far better and much safer to have a firm anchor in nonsense than to put out on the troubled seas of thought.

The Vested Interest in Output

A businessman who reads Business Week is lost to fame. One who reads Proust is marked for greatness.

No one should doubt the convenience of a simple arithmetical measure of success in a world in which so many things are subjective.

The Bill Collector Cometh

That full employment is more desirable than increased production combined with unemployment would be clear alike to the most sophisticated and the most primitive politician.

One danger in the way wants are created lies in the related process of debt creation.

Nothing in our economic policy is so deeply ingrained, and so little reckoned with by economists, as out tendency to wait and see if things do not improve by themselves.

Inflation

There is a well-known and statistically quite demonstrable tendency of people who have an increase in pay to celebrate with red meat.

The Monetary Illusion

Monetary policy became a form of economic escapism. Without it, realities would indeed be hard. Unhappily, faith or urgent need is not an assurance of practical performance.

It has long been clear that economic management, especially in the UK, would be greatly facilitated if resort could occasionally be had to witchcraft.

Monetary policy is a blunt, unreliable, discriminatory, and somewhat dangerous instrument of economic control. It survives in esteem party because so few understand it. No other course of action in economics has ever rivaled monetary policy in its capacity to survive failure.

The Theory of Social Balance

The line that divides our area of wealth from our area of poverty is roughly that which divides privately produced and marketed goods and services from publicly rendered services.

In recent years, the papers of any major city tell daily of the shortages and shortcomings in the elementary municipal and metropolitan services. The schools are old and overcrowded. The police force is inadequate. The parks and playgrounds are insufficient. Streets and empty lots are filthy, and the sanitation staff is underequipped and is in need of men. Access to the city by those who work there is uncertain and painful and becoming more so. Internal transportation is overcrowded, unhealthful, and dirty. So is the air. Parking on the streets should be prohibited, but there is no space elsewhere. These deficiencies are not in new and novel services but old established ones. Cities have long swept their streets, helped their people move around, educated them, kept order, and provided horse rails for equipages which sought to pause. That their residents should have a nontoxic supply of air suggests no revolutionary dalliance with socialism.

Private opulence and public squalor.

It is scarcely sensible that e should satisfy our wants in private goods with reckless abundance, while in the case of public goods, one the evidence of the eye, we practice extreme self-denial.

Advertising operates exclusively, and emulation mainly, on behalf of privately produced goods and services.

To suggest that we canvass our public wants to see where happiness can be improved by more and better services has a sharply radical tone. Even public services that prevent disorder must be defended. By contrast, the man who devises a nostrum for a nonexistent need and then successfully promotes both remains one of nature’s noblemen.

The Investment Balance

The high return to scientific and technical training does not cause the funds to move from material capital to such investment. There is no likely flow from the building of refineries to the education of the scientists.

Houses; automobiles; the uncomplicated forms of alcohol, food and sexual enjoyment; sports; and movies require little prior preparation of the subject for the highest entertainment. A mass appeal is thus successful, and hence it is on these things that we find concentrated the main weight of modern want creation. By contrast, more esoteric desires—music and fine arts, literary and scientific interests, and to some extent even travel—can normally be synthesized, if at all, only on the basis of a good deal of prior education.

Education…by widening tastes and also including more independent and critical attitudes, it undermines the want-creating power which is indispensable to the modern economy.

The Transition

The main task of this essay…has been with the thralldom of a myth—the myth that the production of goods, by its overpowering importance and its ineluctable difficulty, is the central problem of our lives.

Emancipation of the mind is a no less worthy enterprise than emancipation of the body.

Men must see a purpose in their efforts. This purpose can be nonsensical and, as we have seen, if its elaborately nonsensical, that is all to the good. Men can labour to make sense out of single steps toward the goal without ever pausing to reflect that the goal itself is ludicrous.

One could indeed argue that human happiness would be as effectively advanced by inefficiency in want creation as by efficiency in production.

It is so much simpler [to value production] than to substitute the other tests—compassion, individual happiness and well-being, the minimization of community or other social tensions.

The Divorce of Production from Security

The income men derive from producing things of slight consequence is of great consequence for them

The first needed action is to bring the level of unemployment compensation much closer to the average weekly wage and to extend greatly the period of eligibility.

The next step is to produce alternative sources of income, unrelated to production, to those whom the modern economy employs only with exceptional difficulty or unwisdom.

The Redress of Balance

The line between public and private activity, as we view it at any given moment, is the product of many forces: tradition, ideological preference, social urgency and political convenience all play some part. But to a far greater degree than is commonly supposed, functions accrue to the state because, as a purely technical matter, there is no alternative to public management.

The community is affluent in privately produced goods. It is poor in public services. The obvious solution is to tax the former to provide the latter—by making private goods more expensive, public goods are made more abundant.

The Position of Poverty

[To keep poverty from being self-perpetuating] requires that investment in children from families presently afflicted be as little as below normal as possible. If the children of poor families have first-rate schools and school attendance is properly enforced; if the children, though badly fed at home, are well nourished at school; if the community has sound health services, and the physical well-being of children is vigilantly watches; if there is opportunity for advanced education for those who qualify regardless of means; and if, especially in the case of urban communities, housing is ample and housing standards are enforced, the streets are clean, the laws are kept and recreation is adequate—then there is a chance that the children of the very poor will come to maturity without inhibiting disadvantage.

 The survival of it [poverty] is remarkable. We ignore it because we share with all societies at all times the capacity for not seeing what we do not wish to see.

Labour, Leisure, and the New Class

The case for more leisure is not stronger on purely prima facie grounds than the case for making labour-time itself more agreeable.

Another of the obvious possibilities with increasing affluence is for fewer people to work

The greatest prospect that we face—indeed, what must now be counted one of the central economic goals of our society—is to eliminate toil as a required economic institution.

Onee of the oldest and most effective obfuscations in the field of social science…is the effort to assert that all work—physical, mental, artistic, or managerial—is essentially the same.

Membership of the new class has important rewards. Exemption from manual toil; escape from boredom and confining and severe routine; the chance to spend one’s life in clean and physically comfortable surroundings; and some opportunity to for applying thoughts to the day’s work are regarded as unimportant only by those who take them completely for granted.

On Security and Survival

The pursuit of happiness is admirable as a social goal. But the notion of happiness lacks philosophical exactitude; there is agreement on neither its substance nor its source. We know that it is “a profound instinctive union with the stream of life” [Bertrand Russell] but we do not know wat is united.

To furnish a barren room is one thing. To continue to crowd in furniture until the foundation buckles is quite another. To have failed to solve the problem of producing gods 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.

Afterword

Two major effects of affluence  I want to emphaise.

1. The danger that with affluence we will settle into comfortable disregard for those excluded from its benefits.
2. The resources for the production of weapons of ever increasing danger, ever greater capacity for devastation.

Let us protect our affluence from those who, in the name of defending it, would leave the planet only with its ashes.

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