One morning in my freshman or sophomore year, I went for a swim at the old Indoor Athletic Building. The cavernous pool was nearly empty, but in the shower afterward, I became aware of a presence to my left. I looked around. My eyes went up. And there, in the buff, craggy and dour as if he had been pondering the conventional wisdom in his study, was John Kenneth Galbraith, all six feet eight inches of him.
Galbraith always was large to me. Rare among economists, he wrote with grace and wit, which many of his colleagues never forgave him for. (They suspected that he had readers laughing at their expense, and they were right.) William F. Buckley, who was his ideological opposite but a kindred spirit, was a close friend. Even more rare among economists, Galbraith had a restless capacity to challenge the cherished assumptions of his profession, and never let the calcified dogmas get in the way of his experience and common sense.
Galbraith is known as a liberal, a prototypical one in fact. But his liberalism arose, I think, from an outlook that was conservative in the most authentic sense. He grew up on a farm in the Canadian province of Saskatchewan. It was a Scotch-Irish family; and the practice of economy was deep in his blood. Economy meant practicality and thrift, the avoidance of waste at all costs. It meant mustering the available resources to do the task at hand.
He went on to study agricultural economics, which is one of the few realms in which the market nostrums actually work, more or less. There is no Madison Avenue hype in the soybean market. The price really is a function of supply and demand, without a lot of noise in between. (The need for social mechanisms to even out the booms and busts is another matter.)
Then Galbraith went to Washington, where he helped control prices during World War II and got a crash course in how the other side of the economy – the industrial side – actually works. He became an ardent disciple of Keynes; and as a staff writer for Fortune magazine after the War he wrote an entire series on how Keynesian principles could prevent the economy from slipping back into stagnation. The federal government could put money into the hands of this new class called “consumers,” and their buying would pick up the slack from the war machine.
During the War the government had borrowed to fight the Axis Powers. So why couldn’t it borrow again to fight the market forces that had brought the economy low in the 1930s? Deficits would be temporary problem; since an economic boom would produce new revenues that eventually would eliminate them. This was the liberal vision of the era: an ?activist? government would use fiscal policy to put money into the hands of ordinary Americans and ensure prosperity for all. (Three decades later, Republican “supply-siders” would ju-jitsu it into an argument for tax cuts for rich guys.)
But then, somewhere along the way, Galbraith began to have second thoughts, or at least amended thoughts. The consumerist economy that was unfolding before him – that he himself was helping to promote – was less appealing in reality than in statistical formulation. It was wasteful, not just on its own terms, but also for what it neglected. “Economics,” as conceived in the academy, had produced something that was profoundly uneconomic; and Galbraith traced the flaw to the theory itself. The basic principles of the economic faith – the “conventional wisdom,” as he dubbed it – had become obsolete.
The new factor was the corporation, and its capacity to gin up what economists quaintly call “demand.” The texts portray demand as autonomous and innate. It is the primal economic force that moves across the market waters and summons production into being. The consumer is sovereign; the corporation is the servant. Every instance of this “demand” is as inherently valid as any other, the desire for the third television set as urgent and undeniable as the need to feed a hungry baby, because it springs from this sacred source.
The cult of demand served the market ideology at multiple levels. It provided a gloss of populist democracy: the consumer was king, the entire economic machinery was at his beck and call. It deflected the prospect of regulation – did government know better than consumers themselves? – and invested the whole with a kind of divine legitimacy. And Galbraith argued it was a crock. If it took hundreds of millions of dollars in advertising a year to conjure up this demand, did it really have the primal legitimacy economists ascribe to it? Was it really “demand,” in any sane sense of that word?
This is the question Galbraith raised in his most original and subversive book, The Affluent Society. That book has gone down as a kind of pop critique on the consumer culture. But in fact it is a learned – though delightfully readable – summation of the history of economic thought, and an argument that the received version is an anachronism. What is called “economics,” Galbraith observes, was born in an era of scarcity. Production was assumed to be both urgent and beneficial, and eternally so. The entire mental apparatus grew from this central premise.
But it is no longer valid. For most Americans, essential needs have been met. The problem now, for the most part, is not scarcity but glut; it is not whether corporations can produce sufficiently, but whether people will buy the stuff produced. Production is imperative not for the “consumer” but for the producer. It serves to keep the corporation growing, with an increasing toll to individuals and society. While the corporate economy engages an ever-growing marketing machine to sell things people don?t really need, the public realm – roads, schools, libraries, transportation facilities – falls into disrepair. There is public poverty amidst private affluence. Plus, millions of Americans still lack the means to meet their basic needs to begin with.
In this new setting, Galbraith argued, Keynesian fiscal stimulus was not enough. (Keynes himself would not have disputed this, though Keynesian fiscal technicians did.) There was a need to divert a measure of resources from the corporate market, where needs were not urgent, to the public realm, where they were indisputably great. Economics had succeeded, in other words. It was time to declare victory and move on to the next task.
The Affluent Society came out in 1958, and it touched a brooding concern about the consumerist circus that this thing called “the economy” was turning into. Readers back then still remembered the austerities of the Depression and the War, and the practical Model T. They had an internal reference point that enabled them to see the glitz and waste. The book became a best seller. But most economists were outraged. Galbraith had pooped their party. He had declared an historical artifact that which they regarded – and cherished – as a science, like physics, valid for all time.
More, he had questioned the central assumption that drove their entire enterprise; and he had done so in sparkling prose that spoke directly to the general public. Plus – and this truly could not be forgiven — he hadn’t done the math. Galbraith had written descriptively, and had invoked statistics by way of illustration. (This was in the style of Adam Smith himself, but never mind.) He had not offered arcane algorithms as pseudo-scientific proof.
The effrontery still rankled decades later. In the mid-1990s I wandered into the annual meeting of the American Economics Association in San Francisco, and heard Paul Krugman take a nasty swipe at Galbraith for his lax methodology. (Within his own profession, Krugman is a kind of Cerebus of the true and only faith.) That kind of defensiveness does not lessen ones suspicions that Galbraith had indeed put his finger on the mush within the pseudo-science.
The miscalculations of Galbraith’s next book, The New Industrial State, gave his critics a convenient out. The Vietnam War derailed the domestic agenda that The Affluent Society had helped prompt. Then came Carter, and then Reagan, and questions about the corporate market were displaced by cheerleading for it. But while the insights of The Affluent Society were shoved aside, they haven’t gone away. The book is almost as fresh and cogent today as it was half a century ago when it first came out. The pathologies of the consumption culture have increased: there’s now environmental crisis, obesity, addiction, depression, spiraling debt, to add to Galbraith’s list.
The corporate market is on a frantic quest to claim every last inch of natural and social space, to feed its growth imperative. Childhood, the gene pool, water, plants – all are going into the maw. The marketing machinery has become hysterical. Ads are now in school classrooms and cell phone screens. The City of Chicago has begun to auction itself off, bit by bit, as a corporate billboard. Economists persist in calling this an “economy.” Galbraith will help you understand why it isn’t.
Galbraith did not argue for the commons per se, and I doubt the term would have appealed to him. He really was a liberal, in that he saw the antidote to the corporate economy in the formalized programs of the state. But his critique of the corporate market, and the false notion of economy it embodies, brings us right to the threshold. Once you have acknowledged that corporate production is increasingly self serving, and that increasingly it creates the very problems it purports to solve, you are open to the possibility that a different economic engine – i.e., the commons – might be necessary to do what the market can’t.
I myself owe John Kenneth Galbraith a big debt. He confirmed my instincts at a formative stage, and planted the seeds of a critique that has continued to evolve. No less important, he showed that it is possible to take on the powers that be with panache and wit; you did not have to be a humorless scold (and were not likely to win converts that way anyway.)
Galbraith also was an example in a more pedestrian way. He worked like a farmer throughout his life. Every day he sat down at his typewriter at 8:30 AM, and did not get up until 4-5 hours later. He rewrote endlessly, ten drafts for most pieces he said. Those wonderful sentences, perfectly cadenced with his elliptical wit, did not come without effort. That was a huge comfort to one (i.e., myself) who seems sentenced to get things wrong before he begins to get them right. (I wish I had time for ten drafts of this appreciation, but alas.)
About ten years ago, I had occasion to call on Galbraith at his home in Cambridge. He was in the latter half of his eighties, by then, and a bit stooped and wan. But he was still in his study each morning, turning out pieces I could only wish I could write. Our conversation turned to a topic I had not expected – the assessment he had done of the Allied bombing missions in Germany after World War II. These missions, Galbraith had found, had been counterproductive. By wiping out the civilian economy they actually had freed Hitler to focus production more single-mindedly on his war effort.
Unlike Roosevelt, who had diverted consumer production to the war, Hitler had tried to maintain that production to boost morale on the home front. Hmmm, was there a seed there of The Affluent Society – FDR’s realization that production must serve pressing national needs? Had that book in fact been a form of repentance for Galbraith’s cheerleading for the consumer economy in the Fortune series as elsewhere? Galbraith didn’t want to hear of that. He was not a man who liked to be analyzed, or found wrong. Myself, I don’t really care how he got there. When the history of the American corporate economy finally is written, The Affluent Society is going to be seen as a great turning point. The questions it raised were submerged, but they are going to rise again. If you don’t believe me then re-read the book, or read it if you never have.