This year marks the 60th anniversary of the publication of JK Galbraith’s The Affluent Society, which I read for the first time a few months ago.
It’s a fascinating book, that in some ways might be even more timely today than it was in 1958.
Here I want to mention just three points that seem particularly germane to a non-economist:
(1) Galbraith’s account of the beginnings of classical economic theory, which focuses on the work of Adam Smith, David Ricardo, and Thomas Malthus, drives home how these men were creating an academic discipline at almost the exact historical moment that the nature of what they were studying was about to undergo a radical change.
From classical antiquity until around 1700, no society featured any significant long-term economic growth. The industrial revolution arrived in the United Kingdom almost before anywhere else, yet as this chart shows, per capita GDP at the beginning of the 18th century was barely higher than it had been in the Middle Ages.
Today Malthus is remembered as someone whose most famous principle — the so-called Malthusian trap — seems absurdly pessimistic. Yet at the time that he and the other founders of what was then called political economy were formulating their theories, the idea that genuine long-term economic progress was so difficult as to be nearly impossible was more than justified by all existing historical evidence.
All of which is to say that what Galbraith calls the age of affluence remains a brand-new phenomenon in terms of historical — let alone evolutionary– time spans.
(2) This development — sustained long-term economic growth — has now transformed all of the developed world (and increasingly much of the developing world) into a place where poverty is a purely political rather than economic problem.
Let’s look at this in 60-year increments. In the 60 years prior to the publication of The Affluent Society, per capita GDP in the USA had tripled. But it had also tripled in the 60 years before that. And it has tripled in the 60 years since the book appeared. (This means that per capita GDP in the US is now about nine times what it was in 1900 and 27 times what it was in 1840).
Developed nations have now achieved a level of overall affluence that would have been inconceivable even in the 19th century, let alone in the thousands of years of human history prior to then (note that there’s still someone alive today who was alive in the 19th century).
If millions of Americans are either sleeping on the streets, or on the edge of finding themselves there, or going hungry every day, or doing without even the most basic medical care, this has nothing whatsoever to do with economic scarcity, and everything to do with what is a purely political failure.
(3) Galbraith emphasizes that the classical economic tradition focused initially on three questions: growth, distribution, and security. As the affluent society came into being, the discipline of economics, at least in the United States, came to be in his view unduly obsessed with growth, at the expense of questions about equitable distribution and economic security. If this was true in 1958, consider how much truer it is today, in our vastly wealthier society.
Galbraith was in many ways a prophet, and his prophecies are all the more relevant in the midst of our new gilded age.