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John Kenneth Galbraith
Notes
The speaker or writer who addresses his audience with proclaimed intent of telling the hard, shocking facts invariably goes on to expound what the audience most wants to hear.
…as an economic and social concern, inequality has been declining in urgency, and this has had its reflection in the conventional wisdom.
The Great Depression was severe partly because there was so much wealth and income to lose. The hazard was greatest in the United States and Canada where the per capita wealth was greatest.
By way of summary, while production has come to have a goal of pre-eminent importance in our life, it is not a goal which we pursue either comprehensively or even very thoughtfully. We take production as the measure of our achievement, but we do not strive very deliberately to achieve. Our efforts to increase production are stylized. We stress the evils of idleness and bad resource allocation which were relevant to efforts to increase output a century ago. We do little or nothing in peacetime to increase the rate of capital formation or the rate of technological progress in background industries despite the clear indication that these are the dimensions along which large increases in output are to be expected. We would not deplore the production we lost in depression. We are protected from this loss far more by the threat of depression to economic security. Last of all, on ancient and traditional grounds, we relegate one important class of production, to a second-class citizenship.
The fact that wants can be synthesized by advertising, catalyzed by salesmanship, and shaped by the discreet manipulations of the persuaders shows that they are not very urgent. A man who is hungry need never be told of his need for food. If he is inspired by his appetite, he is immune to the influence of Messrs. Barren, Barton, Durstine and Osborn. The latter are effective only with those who are so far removed from physical want that they do not already know what they want. In this state alone, men are open to persuasion.
During periods of active monetary policy, increased finance charges have regularly been followed by large increases in consumer loans. Want creation, and the process of financing it, were still acting to exaggerate rather than to restrain the inflationary effect of consumer spending.
The income men derive from producing things of slight consequence is of great consequence to them. The production reflects the low marginal utility of the goods to society.
The first (needed action) is to bring the level of unemployment compensation much closer to the average weekly wage and to greatly extend the period of eligibility. The result, to repeat, will be some increase in malingering but this must be measured against the comparative unimportance of the goods being sacrificed.
The concern for inequality and deprivation had vitality only so long as the many suffered while a few had much. It did not survive as a decisive political issue in a time when the many had much even though others had much more.
But we barely noticed that the leisure class has been replaced by another much larger class to which work has none of the older connotations of pain, fatigue or other mental or physical discomfort.
Society has gone from historically poor to a new age of affluence.
As more of society has become affluent, inequality is less of an urgent issue. Production is the prominent measuring stick of progress.
Private production is more valued than public – though public is more valuable to our way of life.
The production cycle creates a loop whereby a company manufactures a product, advertisers create the want for the product in the consumer, the company delivers the product to satisfy the want, and their capital is employed to create more products.
Leverage has been utilized and is mounting to satisfy this growing want.
Excessive inflation results from want creation coupled with leverage.
As society becomes less poor, and production veers evermore into useless want-creation, production should become less emphasized, with leisure and social support filling the gap.
Most people today prefer to work, even if they were to be supported by a social net.
White-collar “work” is viewed as equally as admirable and tiresome as blue-collar work.