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The Affluent Society | Introduction

The Affluent Society (1958), John Kenneth Galbraith’s most broadly influential book, stands out among works of economic analysis for its accessible writing style, which makes complex economic concepts and arguments understandable to the popular reader. Galbraith’s phrase ‘‘conventional wisdom,’’ a key concept introduced in The Affluent Society, has entered common parlance so pervasively that it is now used to describe a variety of concepts not necessarily related to economic theory.

Galbraith asserts that the conventional wisdom of economic thinking in the United States is based in nineteenth-century European economic theory and is no longer suited to the unprecedented phenomenon of mass affluence achieved by American society in the twentieth century. He criticizes the overemphasis on high rates of production as a measure of economic prosperity, suggesting that other factors may be of greater importance. He further asserts that economic theory must take into account the importance of advertising in artificially creating high rates of consumption to support high rates of production.

Galbraith’s central concerns in reassessing the American economy include: the nature of American affluence; the relationship between production, consumption, and advertising; the abiding issue of poverty and economic inequality; and changing factors in such economic concerns as employment, inflation, and consumer debt. He ultimately advocates a greater emphasis on sales tax over property tax; greater government expenditure on such public services as education and health care; and a national goal of expanding the ‘‘new class’’ of citizens able to pursue work they find inherently enjoyable.

The Affluent Society Summary

American Affluence and Conventional Wisdom
Asserting that the United States in the twentieth century is an anomaly in world history due to its unprecedented affluence, Galbraith states that economic theory up to this point is based primarily on societies characterized by poverty and is, therefore, inadequate to addressing the economic condition of the United States in the twentieth century. He introduces the concept of conventional wisdom, which refers to the generally accepted ideas within any given society. Galbraith asserts that conventional wisdom is based primarily on tradition and does not accommodate changes in society and so must be viewed with skepticism. He observes that the early economic theorists—the leading figures being Smith, Ricardo, and Malthus—of the previous centuries based their theories in a world economy characterized by poverty. Galbraith then provides an overview of major currents in economic theory since the Industrial Revolution in the mid-nineteenth century. A predominant current of twentieth-century thought—the ‘‘central tradition’’ of economic theory—was the idea that financial crises, such as the depression, are a normal occurrence of economic cycles.

Production
Galbraith traces the major currents of American economic thought in the twentieth century, particularly the influence of Social Darwinism and Marxism. Galbraith argues that the issue of inequality in the distribution of wealth has become less and less of a concern in American conventional wisdom. Focus has moved instead to the benefits of increased production at all levels of society. He points out that since the 1930s economic security, both for the business owner and the worker, has steadily increased, as has overall production. With the decrease in concern for economic inequality and the relative elimination of extremes of economic insecurity, Galbraith argues, production has become the foremost concern in economic thought. He elaborates upon the extent to which conventional wisdom in the United States regards production as the essential measure of economic vitality. However, Galbraith notes that, in fact, this concern with production is irrational and inappropriate to the realities of the economy. He stresses that the conventional wisdom is selective in evaluating various types of production so that private sector production is deemed good for the economy while social services provided by the government are considered bad for the economy.

Consumption
Galbraith further observes that with the steady increase in wages in the... » Complete The Affluent Society Summary