Galbraith attempts to lay out what a good, humane society might look like, what values it might espouse, how it would treat people within and outside of its borders. He lists general principles and it is cheering that so many of them seem to have found their way into the Obama Administration’s plans. He holds as good things like stable currency, full employment, no discrimination based on race, gender or age, intelligent caretaking of planetary resources, availability of a safety net for all, including health care, reasonable regulation of markets to ensure fair dealing, reasonable regulation of food and products for safety. A nice list.
I had a few bones to pick though. The absence of any mention of sexual preference was glaring, but I imagine that were he writing this today it would be included.
I found at times that it felt as if the underpinnings might be a bit squishy. Galbraith makes many statements about extant reality that appear as revealed wisdom. And while I know that in a piece such as this, one cannot really expect a detailed undergirding to be presented for each and every good thing that he presents. Each tenet could easily justify and has justified many detailed treatments. Still, my radar perked up here and there.
He thinks a free flow of all “higher level” workers between nations is non-controversial and that the military sets its own budget level. While arguments might be made in support of those notions, they are not presented here. Personally, I have my doubts. I take some issue with a presumption that expansion of the economy is always a good thing. One thing the green movement might teach is that often it is better to find more efficient ways of doing things.
One thing Galbraith notes is that class conflict is alive and well in the USA
It is an unequal contest: the rich and the comfortable have influence and money. And they vote. The concerned and the poor have numbers, but many of the poor, alas, do not vote. There is democracy, but in no slight measure it is a democracy of the fortunate.
He claims that the social trends that occur in history are a result of inevitable forces and are not particularly reflective of liberal or conservative ability to define social agendas.
Sometimes his information is dated. In talking about the differences between the more physical working class work and non manual-labor he claims that the influx of technical skills from abroad is not viewed as a problem for American labor while the influx of low-skill labor, particularly from Mexico and Central America as it pertains to the USA is viewed as problematic. As someone who was excessed out of the computer trade while corporations were besieging Washington with demands for increases in the number of allowable imports, I beg to differ. For all his economics acumen, Galbraith makes the mistake of differentiating white collar from blue collar as a particularly meaningful separation. In fact, work is work, whether it is by the sweat of one’s manual or mental labor, and what binds both sorts is the fact that white and blue collars both report to ownership, that their labor is a commodity and that with increasing globalization, the value of that commodity, in the absence of organized legal and union protection, has been declining precipitously.
With higher levels of economic activity, the better protection of the citizen and of the business enterprise also becomes important. Before highways and automobiles there was no need for highway traffic police. As foods have increased in variety, there is increasing consciousness of their nutritional effect—of fats and of being fat. It has become necessary to specify their content, regulate additives and prevent possible contamination. At higher living standards and with greater enjoyment of life, people seek protection as to health and safety from what were once dismissed as the normal hazards of human existence…And there is the further fact that the modern economy cannot, without government intervention, ensure a satisfactory and stable overall economic performance. There can be intense and damaging speculation, painful and enduring recession or depression. The appropriate action to control them is much debated, but that it is a responsibility of the state so to do few doubt.
In the good and intelligent society policy and action are not subordinate to ideology, to doctrine. Action must be based on the ruling facts of the specific case. There is something deeply satisfying in the expression of an economic and political faith—“I am firmly committed to the free enterprise system”; “I strongly support the social role of the state”—but this, to repeat, must be seen as an escape from thought into rhetoric.
If put in sufficiently general terms, the essence of the good society can be easily stated. It is that every member, regardless of gender, race or ethnic origin, should have access to a rewarding life. Allowances there must be for undoubted differences in aspiration and qualification. Individuals differ in physical and mental facility, commitment and purpose, and from these differences come differences in achievement and in economic reward. This is accepted.
[notable by its absence is any mention of sexual preference:]
…the good society must have substantial and reliable economic growth—a substantial and reliable increase in production and employment from year to year. This reflects the needs and desires of a people who seek to enjoy greater economic well-being.
[Why must there be continuous expansion? Why not, instead, improve the quality and utility of available tools and conditions of living with a stable population? Why not encourage better instead of more?:]
So long as there is opportunity, there is also social tranquility; economic stagnation and privation bring with them adverse and widespread social consequences. When people are unemployed, economically deprived and without hope, the most readily available recourse is escape from harsh reality by way of drugs or violence. [ Really? What about escape via entertainment media, computer games for example?:]
It is the poor of Africa and Central America who slaughter each other; the people of prosperous lands, on the whole, live peacefully together at home and abroad. It was economic stress in the 1920s and 1930s that helped bring fascism and eventual catastrophe to Italy and Germany. In more recent times, since the fall of Communism, it has been economic hardship and insecurity that have nurtured political conflict and social disorder in the countries of the former Soviet Union.
[And are not the mobs that are set loose organized by members of the uppers. Were not the slaughters in Africa brought about by a lust for power by members of the upper class?:]
A loss of income at the margin is less painful for the rich than for the less affluent. It also contributes to the efficient functioning of the economy. The poor and those of average income spend reliably from what they earn; the rich do not. Thus, progressive taxation has a stabilizing role in helping to ensure that what is received as income is returned to the market as demand for goods produced
Future security in life is based normally on the assumption of stable or reasonably stable prices. There are some who have the protection of indexing, income that rises along with prices; many do not. [And Galbraith should know that games are played to minimize the reality of such “keeping up” when it comes to recipients of social security and other government benefits:] This cannot, in a well-functioning economy, be absolute; some price inflation is inevitable. [Why? No reason is offered:] It must, however, be within close and predictable limits.
…in the modern economy and polity those who have political voice and influence are more damaged by inflation than by unemployment. Unemployment is suffered by those afflicted and by their families; their pain can readily be tolerated by those who do not experience it.
Unemployemt has, in fact, some socially and economically attractive effects; services are well-staffed by eager workers forced thereto by the lack of other job opportunity; employed workers, fearing unemployment, may well be more cooperative, even docile, as may their unions. And, even more significantly, for most citizens, including those with influential political voice, joblessness is not a threat.
Inflation, in contrast, spreads its net widely in the modern economy. The many who lived on fixed incomes, on pensions, on accumulated savings, fear it as they do not unemployment. Even if income return is indexed to rising living costs, a sense of insecurity is still instilled by higher prices. The increases are seen every day; the indexed adjustment comes only at intervals of as long as a year. Price stability seems far better.
Prominent among those preferring price stability over unemployment is the financial community. This includes central banks in which, in the case of the Federal Reserve system, the bankers are accorded a statutory voice. And commercial banks, investment firms and the larger financial world. All who lend money wish to have it returned with more or less equivalent purchasing power.
It is held that there is a moral entitlement: the man or woman in question has the right to receive what he or she earns or, more precisely, what he or she receives. This can be asserted with emphasis, on occasion with asperity and often with righteous indignation. It encounters opposition, however, in both history and hard fact.
Much income and wealth comes with slight or no social justification, little or no economic service on the part of the recipient. Inheritance is an obvious case. So also the endowments, accidents and perversions of the financial world. And the rewards that, from its personal empowerment, modern corporate management bestows on itself.
There are four factors that force public intervention and regulation. There is, first, the need for contemporary and long-run protection of the planet, regulatory requirements commonly described as preventing environmental destruction…Second, there is the need to protect the vulnerable among those employed in the productive apparatus from the adverse affects of the economic machine…third, there is the more than occasional propensity of the economy to produce and sell technically deficient or physically damaged goods or services. And, finally, the system incorporates within itself tendencies that are self-destructive of its effective operation. Each of these factors…produces a sharp conflict, with ideological overtones, between those who see the system as a fully indenendent force and themselves as deservedly rewarded thereby and those who advance the case for protective or corrective action.
The economic system operates effectively only within firm rules of behavior. The first is common honesty—truth must be conveyed as essential information to investors, the public at large and…to consumers. In the field of finance, however, it is especially likely that, misconduct being both remunerative and damaging, this will not occur. [ Oh yeah?:] Regulation must, accordingly, prevent false or misleading reporting as to business performance and earnings and as to investment prospects.
…environmental concerns, both those which are contemporary and those affecting future generations, especially the latter, are inherently in conflict with the motivating force of the market economy, which is immediate foreseeable return to the producing firm.
The migration of the socially, culturally and economically well endowed encounters no serious objection. On the contrary it is greatly praised and, in practical fact, is subject to few legal constraints…a liberal immigration policy in the good society serves those who seek to come, and it serves no less substantively those who are already here.
An important question remains, however. Given the responsibility of the national state for its own working force, should migration be at least controlled in its favor?
The practical answer is yes. There need be no effective limitation on international or internal movements in the higher brackets of achievement—on the immigration of literary, artistic, scientific, technological, athletic and like talent, those engaged in business and, quite possibly, those primarily committed to leisure and its enjoyments.
[My concerns with this rest on the false notion that merely because one may have achieved a higher level in school, or earns a higher salary, or receives a bit more respect in the community, one becomes somehow divorced from the basic underlying dynamics of the capitalist system. We are all defined by our relation to ownership and control of our work. You can make a lot of money and still, in a meaningful way, remain working class. Take, for example, those of who are, or in my case once were, technical professionals. Corporation screaming for relaxation of immigration quotas for computer programmers has led to thousands like myself who were cast out of the market in favor of lower-waged workers from India, China and other parts of the world. This is less a way of making a society good than it is a mechanism for keeping wages low. Labor is labor is labor. Until and unless you own your own shop you remain a worker regardless of how much money you earn.
In a similar manner, my son was interested in working in the graphic arts industry in Berlin. Yet he was only allowed to remain for a few months before he had to leave. Why should we in America allow in high level skills when other nations work to close their borders to our high-skill people?:]
The private living standard…is the beneficiary of enthusiastic, often relentless advocacy; that is the function of all salesmanship, all advertising, all product and service promotion. By contrast, the public living standard—schools, parks, libraries, law enforcement, public transportation, much else—has no such support. The consequence, one that is wholly familiar, is expensive television and meager schools, clean houses and dirty streets.
But within the allocation to public purpose itself there is an especially egregious error in resource distribution. That is as between military and civilian needs, and it is the result of a serious failure in the democratic process.
In the united States the decision as to public expenditure is made through a combination of legislative and executive power. The defining and controlling factor in all public action is the money thus provided….there is one major exception to this exercise of democratic control, and that is the military power. …The American military establishment effectively and independently decides on its own budget…the claim on public funds by the military and its plenary power over their disposal are routinely accepted in the executive branch of the government. It is tacitly agreed that civilians in nominal authority do not tangle seriously with the military
P 107 – re bureaucracy
An internal dynamic leads to the relentless proliferation of managerial and other personnel. The controlling circumstances that govern personnel policy in both sectors of the modern economy are simple and wholly obvious, but they normally go uncelebrated, with the tacit consent of those involved. There is, first, the desire of anyone in a position of hierarchical responsibility to want a seemingly sufficient body of supporting staff. The workers so acquired have, in turn, their own desire and apparent need for assistance. Specialization then adds to the need; there must be personnel of suitably varied knowledge and competence. The whole process, as indicated, has a dynamic of its own.
…from numerous and suitably deferential subordinates come both the reality and enjoyment of power. Also prestige within the organization and a claim on higher pecuniary compensation an accepted measure of an individual’s worth is the number of people over whom he or she presides…To add subordinates is thus to enhance in the most visible way position, prestige, and pay.
There are, of course, efforts to limit the expansive process. To this end budgets are prepared and budget limits imposed. These, however, can be largely symbolic. Ion all great organizations a strong and even irresistible tendency is to add managerial, technical, professional, and other employees. Only as one gets to the shop floor in the industrial corporation—to, as significantly as they are called, working levels of the enterprise—is the proliferation dynamic held in check. Only at these levels—the worker on the assembly line, the elementary school staff—is there a close, continuing assessment of needed workers to product.
He notes further that bureaucracy, whether private or public, has a tendency to grow and to resist change. Power is displayed by the number of direct reports one has, whether or not that many direct reports represents optimal efficiency. It is certainly true that public institutions that already exist develop a base of backing superior to a demand for another bureaucracy and
The economic threat of globalization…can seem especially urgent. Those countries with better social and working conditions invite competition from lands with lower wages, less effective protection of the economically vulnerable and hence lower production costs. To them the transnational corporation can readily move its operations.