John Kenneth Galbraith, Louis M. Hacker, A. H. Raskin

The Affluent Society

VTR Date: June 15, 1958

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THE OPEN MIND
Sunday, June 15, 1958
NBC TELEVISION

Moderator: Richard D. Heffner
Guests: Professor John Kenneth Galbraith, Dean Louis Hacker, Mr. A. H. Raskin

Announcer: The Open Mind, free to examine, to question, to disagree. Our subject today, “The Affluent Society.” Your host on the Open Mind is Richard D. Heffner, historian, teacher and author of “A Documentary History of the United States.”

Mr. Heffner: Some time ago, a friend of mine, Eleanor Smith of the Brooklyn Public Library, bawled me out for not, on the Open Mind, making enough use of the reading matter that can go .along with the subjects that we discuss. In a sense we have made up for this on The Open Mind by, on occasion, discussing books themselves. We talked about “Compulsion” with Meyer Levin, “The Organization Man” with William H. White — and today we are going to talk about a book that has had considerable impact upon the American community and deservedly so. It’s the “Affluent Society” by John Kenneth Galbraith, published by Houghton Miflin Company.

Now I think it would be well to indicate that the subject today is not just the book but Professor Galbraith’s major theme, The Affluent Society itself. Let me introduce my guests now.

My first guest is Professor John Kenneth Galbraith, Professor of Economics at Harvard University, author of the “Affluent Society. My second guest is Professor Louis M. Hacker, distinguished economic historian, Dean of the School of General Studies at Columbia University and author of “Alexander Hamilton and the American Tradition” and our third guest is Mr. A. H. Raskin. Mr. Raskin is the Labor Editor of the New York Times.

I think, gentlemen, it might be well if I were to begin the program by – I hope you don’t mind, Professor Galbraith, by just reading the very first paragraph of chapter one of “The Affluent Society”. It goes like this:

“Wealth is not without its advantages and the case to the contrary although it has often been made has never proved widely persuasive. But beyond doubt wealth is the relentless enemy of understanding. The poor man has always a precise view of his problem and its remedy. He hasn’t enough and he needs more. The rich man can assume or imagine a much greater variety of ills and he will be correspondingly less certain of their remedy. Also, until he learns to live with his wealth, he will have a well observed tendency to put it to the wrong purposes or otherwise, to make himself foolish.”
And then you go on, the first sentence in the next paragraph, “As with individuals, so with nations.” And I think I’d ask you, Prof Galbraith, to begin the program by indicating “as with individuals so with nations” how we in the United States have exhibited this tendency to put our wealth to the wrong purposes or otherwise to make ourselves foolish.

Professor Galbraith: Yes, I’ve argued that in the book. I don’t suppose you would like me to use the whole half hour to summarize the book, would you?
But I’ve argued in the book that when nations were poor there was never any doubt of what they needed — it was more production. More food, more clothing, more housing; and this was perfectly evident and perfectly clear when economics first took its shape as a subject. And I’ve argued that as we have become more affluent and have become richer, that we have continued to preoccupy ourselves excessively with production of goods where our problem, in fact, has been not so much to increase production, although I assume that we will continue to do that, as to how we’re using our production and. I have argued in the book that our present uses of production, of our productive resources, are far from rational and we need to have another look at them.

Mr. Heffner: Dean Hacker.

Dean Hacker: And there you further contend, do you not, that a good deal of our wants, certainly as far as our social, our personal, expenditures are concerned, are directed for us. That is to say, you use a term that our wants are being synthesized and that, in effect, we are the captives of our own productive practices. I wonder if you would want to elaborate a little bit on that because to be perfectly frank, I don’t think I quite agree with you at that point.

Professor Galbraith: I think it should be known for the record that we disagreed on a great many things over the years and I suppose that it would be surprising if sweetness and light descended now on our very happy past differences.

Dean Hacker: Besides, we wouldn’t want to do that here, would we?

Professor Galbraith: It would certainly be a disappointment, at least for some people.
Well, I’m not, actually, as you know Dean Hacker, joining in the great condemnation of Madison Avenue as the source of all our troubles. I do argue – it seems to me to be a very plausible point – indeed, if it weren’t plausible I suppose I wouldn’t have argued it in the book., that as a country has more and more goods; as its wealth increases, it’s wants become much less evident to us and therefore we have the opportunity of persuading people of what they need. After all, a hundred years ago it wasn’t necessary to tell the people of England, the average individual; that he needed more food and more clothing. He knew this, and the opportunity for this type of persuasion develops and indeed, becomes a major necessary as wealth increases.

Dean Hacker: I want to press the point just a bit farther. You, yourself, say and it’s an important aspect of your argument-‘ and in this I concur that we should give greater and greater weight to social outlays and expenditures and more particularly, to education. But then you, yourself” go on to say that as a person becomes educated, his own wants are not synthesized for him but indeed, grow out of his improved taste. Now don’t you think that therefore you, yourself are expressing a paradox there. With greater education, through more public outlays, we will therefore free the taste of the individual so that he can direct his own wants without the necessity of having the guidance of outside agencies.
I think that’s an interesting point and I would way this would be a very happy consequence of education. I wouldn’t lay great stress on it. What I would stress is this: that we have in the United States and we’re talking here only about the United States, actually at the moment at least, a very elaborate machinery for synthesizing, manufacturing private wants; and with this machine, our apparatus for developing and synthesizing wants for things like education…things like roads, things like urban redevelopment, are much inferior. And, therefore, on the whole, the education completes rather badly with cosmetics, depilatories, alcohol, tobacco, cigars — of none of which I disapprove, I would say.

Mr. Heffner: Mr. Raskin, I want to start right off by saying that I really think that this is a most remarkable contribution that you have made in the book and before I start chipping away at it, which I intend to do, I really think that this, not only in terms of ideas but equally in the almost lyric way in which they are expressed, is an enormous contribution to economic thought, at which point I will now pick up my hatchet and start chopping away at the argument.
One of the things that of course concern all of us and which you take great cognizance of in the book, is the fact that we are engaged in a basic struggle in the world at the moment which concerns us and which is vital to our survival: at least as vital as the production of automobiles or chewJ.ng gum or any of the other things whJ.ch are pillars and adornments of our society. Khruschev in taking over as Premier, has said the Soviet system will prove that is can do a better job in the area where we have always rightly regarded ourselves as being predominant.
Now I wonder whether we are really at a stage – of course, even ignoring the fact that at the moment we’re 1n a recession- where affluence is our predom1nant concern although personal 1ncomec are holding up at a high level. But when you look at the statistics even before the recession, going back to the 1955 statistics in your book, you still find that you have a very considerable number of families with an income under $3,000. Close to 1/3 of all the families in the country are still in that group. The median income is $4,400 per family which, going back to prewar standards, was about the $2,000 level which we always regarded as being something less than the standard of decency, so have we really got to the point where we have to throw overboard some of our cherished ideas and decide that we need a new kind of economy?

Professor Galbraith: I’m not urging a new kind of economy. I am urging some new thoughts on the existing economy.
Mr. Raskin: Well, can they be accommodated in your judgment within a private enterprise..,.

Professor Galbraith: Let me say just a word about the recession. I don’t need to say that I wrote this book long before there was a recession, and I would say in my own defense, that I argued that the misuse of our affluence, the misuse of our riches) was increasing the risk that we would have just such a mishap as this.

Mr. Raskin: Yes, and a lot of that stands up very well in the light of the present situation.

Professor Galbraith: A more rational, wise use of our resources would mean a more stable use. But let me address myself to the much more interesting question, much more important question, I think, of can we legitimately talk about affluence? Well, we have certainly, remaining in the United States, a very substantial number of very poor people of this there can be no question. Somewhere around 8 to 10% of our families, of our households and unattached individuals have annual incomes from all sources of less than $1,000.
This is real poverty. I think maybe we can agree on that. But I would argue that our past hope, which has been that increasing production will automatically correct this situation has indeed> paradoxically, been one of the reasons why this residual poverty has survived. It has been lost sight of in the increasing affluence and indeed, also connecting it requires a kind of direct action, direct investment in people, a kind of determined concern that has been absent so long as we assumed that it would be taken care of by increasing production.

Mr. Heffner: May I ask this question, then, Professor Galbraith? The assumption has usually been made that as we increase our productivity, the wealth of the nation seeps down, even to the lowest possible level. Are you saying that this is just not true?

Professor Galbraith: I’m saying that as far as the worse part of this problem is concerned, it is not true. For example, the very poor farmers in the rural slums, the Southern Appalachian areas, one very unfortunate area, some of the racial minority groups, the victims of real misfortune, the people who, for one reason or another, are unable to catch hold in an industrial civilization. These people have not been much helped by increasing production and. the number of these people the percentage of these people tends to be fairly constant. Always declines, but very, very slowly.

Dean Hacker: But it is a small group.

Professor Galbraith: An old libertarian like you, Dean Hacker, places great emphasis on the integrity and sanctity of the individual and it’s like saying when the baby got lost off the boat that it was a very small baby.

Dean Hacker: I think you yourself have indicated that a part of this poverty is really as a result of choice; that people want to live in some of these depressed areas, because of habit or perhaps because of other circumstances beyond their control, and that certainly perhaps is characteristic of those persons you cite in the Appalachian area. They just want to live in that kind of community.

Professor Galbraith: To circumstances beyond their control, it’s not precisely a matter of free choices is it?

Dean Hacker: I quite agree; but there is a good deal of free choice there. I know many persons who by choice live for example, on the East side of New York. They like the habits, they like the old associations…

Professor Galbraith: Oh, yes, quite. If they’re born on the East side of New York they have a chance to be President…

Mr. Heffner: May I ask this question? Are you concerned, Prof. Galbraith, that this group that has not benefited in “The Affluent Society?” Is your purpose to bring affluence to them or is your purpose to be directed otherwise?

Professor Galbraith: No, I argue that this group will continue until we change our attitudes and begin to make better’ use of our resources. The primary problem of this poverty is a gross underinvestment in people. The remedy in large measure is a much larger investment in health and education; in assistance in relocation; assistance in resource reorganization, if I may use a technical term, and in also a great many other types of humane activity which we are now neglecting on the assumption that this remedies itself by increased production. I am chiefly concerned with this problem.

Mr. Raskin: Could I raise just one question in precisely that connection; one of your remedies, and an interesting one, is that there ought to be, particularly for purposes of raising state and local revenue much greater reliance on sales taxes.

Professor Galbraith: A great widenj.ng of the revenue base, yes.

Mr. Raskin: This means insofar as Federal taxes are concerned, primarily a broadening across the board of income taxes, but at the state and local level which is the source, the root, of expanded investment in education a sales tax. Now wouldn’t that tend to widen the inequities because your sales taxes and your purchases would come in much greater volume in the rich states – New York and others – and in these mountain states – in the other states that had been chronically afflicted with a lot of poverty, wouldn’t they just stay in that same low rut?

Professor Galbraith: This would be so if it were done in this way. I think one clear necessity of this situation is much greater outside revenue and indeed, in this particular case much greater use of Federal aid because one of the problems of the poor state is that even with the best tax system, and they don’t have it, tax revenues are small and the shortages in schools, and health facilities, etc., tend to be self-perpetuated. So that as you state the matter, I would agree.
I would certainly say; however, that this is something that calls for large scale outside investment and I would expect that this would bring Dean Hacker in with a rush.

Dean Hacker: Now one of the significant parts of your analysis is what you call a necessity for creating social balance; in other words, diverting a sizeable proportion of our outlays on direct personal needs and amplifying the social expenditures, that is to say…

Professor Galbraith: Many more institutions like the College of General Studies.

Dean Hacker: Right, except that that is privately supported by the individuals who prepare to utilize their income for the purpose of paying their own tuition, but I pursue the thought. This means, obviously, a larger and larger direction on the part of the state of our whole economy, and in fact, our outlay. I want to raise two points:
The first is, in effect, doesn’t the ultimate end of such a proposal mean complete state direction of our economy and our expenditures and the second point is, to what extent can we really rely upon such a public authority to make those accumulations, to affect those savings, that make possible economic and social advantages.

Professor Galbraith: Oh, absolutely not, Louis. I don’t believe this for a moment and I really don’t think you do, either. You’re not really saying that bad schools, poorly financed are libertarian, and good schools well financed are totalitarian.

Mr. Hacker: No, but I’m…

Professor Galbraith: We should. have enough revenue for these types of services so that they’re all well done, that they’re as well produced as our automobiles, that they’re as well produced as our refrigerators, that our streets are as clean as our houses. You don’t think for a moment that there’s anything totalitarian about that.

Mr. Hacker: I do think that when you do expand public authority, and. here I am a complete Jeffersonian, that any energetic state is likely to become oppressive and that I am, as a civil libertarian, as well as a libertarian generally, deeply concerned over the problem of the expansion of public authority because I must say here; flatly, that the record of public authority as far as civil liberties, more particularly academic freedom, very close concern of mine; has not been good in America.

Professor Galbraith: I would remind you, however, my old Jeffersonian friend, that Jefferson himself, was the founder of the University of Virginia and took greater pride in the use of state resources for that institution than in any other thing except the Statute of Religious Freedoms.

Dean Hacker: And the Declaration of Independence.

Professor Galbraith: And the Declaration of Independence. And therefore, if we’re citing Jefferson, I have him at least as much on my side as you have him on yours. Do you really think the State of New York has authoritarian intentions as far as you’re concerned?

Mr. Hacker: I don’t know how good its record as far as academic freedom is concerned in the higher universities really is.

Mr. Raskin: Professor Galbraith, may I ask this question? Now I don’t think I’m going off our field. You suggest a shift in emphasis and if, as a lay person I might take what Dean Hacker asked and put it this way. How do you achieve the shift? How do you impose the shift away front the kind of production and the kind of concerns that you say are outdated now and shift them into other directions if you don’t do this through governmental controls and this is where I would have the same concern as Dean Hacker does.

Professor Galbraith: I not only admit the necessity for enlarged public services, but indeed, I affirm it and I must say I regard nothing as more damaging than the notion that government in a democracy is the enemy of the people. And I think that nothing is really more damaging than the notion that poor ill financed services are somehow better than good well financed services. That’s what I argue for.

Mr. Raskin: One of the things that does emerge and I think perhaps that it’s understandable that it would in this kind of book is that there is no effort to indicate what proportion of our total resources are to go into the governmental, the public side, and what should be left as the concern of private economy.

Professor Galbraith: Let me remind you, Mr. Raskin that if I had indicated these proportions, I’d be defending myself against Dean Hacker’s charge that I was a planner. What I’m indicating here, really in the main, is the change in attitude. Somethi.ng which causes us to look with wider eyes at the whole spectrum of our use of human activities.

Dean Hacker: Well; you do focus attention on something we all feel and namely that even what we call private corporations really have become public. It is a little hard to define what a private enterprise economy is anymore. Except that corporations do concern themselves with profits and what is going to take the place – I won’t say wholly – of the profit motive which does lead to accumulation and savings and therefore we assume to a sufficient capital investment.

Professor Galbraith: This is to some extent, another book, Louis.

Mr. Hacker: It’s one that you tend to discount, the incentive motive – the financial incentive as primary spur of our economy.

Professor Galbraith: I don’t dismiss the profit motive entirely, but I would certainly argue that in the modern corporation a great many other factors, prestige, a certain kind of institutional stability, that these all operate. I don’t suppose that you would want to insist the New York Times is run strictly and exclusively to maximize the profits of the owners which are…

Mr. Raskin: As a matter of fact I think it’s a great institution of public enlightenment and that turns out to be a very profitable way to run a newspaper.

Professor Galbraith: So that we are concerned here already and have for a lone; time, been concerned, with a mixture of motivation.

Mr. Raskin: Right. The question is, when we keep it mixed, if we go as heavily into the public field as you would like to…

Professor Galbraith: I must say that I don’t really think that this changes the thing. I have already argued in the book that paradoxically, we have handicapped the private sector of our economy or what we still call the private sector by underinvestment in people. That we haven’t kept the investment in human beings, the investment in scientific and technical talent, abreast of our mechanics for investing in capital and that indeed, one of the paradoxical results of better social balance will be a more reliable growth of private outputs.

Mr. Heffner: Well, since we have but two minutes left, I’d like the opportunity to ask you, Professor Galbraith, whether your notion of an affluent society is at all changed by the fact that since you’ve written the book we’ve gone into a recession.

Professor Galbraith: On the contrary; Mr. Moderator. I wrote this book out of the fear that in the kind of misuse of the resources, not misuse of resources; but the less than rational use of resources we are making, we were heightening the risk of economic instability and recession. This was one of the things which was very much on my mind. Now I didn’t hope for a recession, and please believe me, in order to validate my fears. These fears, as you know, are well distributed through my book.
Mr. Raskin: One of the things, as a matter of fact, that does come very clearly from the book is the notion, which regrettably has proved true, that even though we have rather clear ideas on what ought to be done through governmental action to deal with this kind of a dip in the economy that we just won’t do them. We find helpful signs here and there and we keep postponing decisions and finally the opportunity slips away and of course, ultimately; we pick up. But I really doubt that people are going to tolerate this kind of up and down for a long period such as we’ve come to take for granted.

Mr. Heffner: Yes, but there seems to be an assumption on Prof. Galbraith’s part that we were going to be doing certain things within the context of a recession that I don’t think are being done.

Professor Galbraith: Well, the book indicates that we’ll be slow to do them, we’ll debate them and ultimately we may not do them.

Mr. Heffner: Well what about the course of this recession – it’s a very practical question and as a practical person I’m curious about it.

Professor Galbraith: Oh, you want me now to turn from an historian into a prophet? You know that the only prophecies that are ever remembered are those that are wrong. Sooner or later the recession will come to an end, but when, I don’t know.

Mr. Heffner: Dean Hacker?

Dean Hacker: I don’t want to say anything about that, but I’m just worried about this whole discussion of the affluent society entirely in terms of our own needs and problems as a nation. What about our responsibilities to the dark side of the moon?

Professor Galbraith: I’m very glad you raised this question, Louis) because I do think this is an important part and I must tell you the other thing that was very much on my mind was why, though so rich, we are able to break loose such a small part of our resources for what you call the dark side of the moon. That is a figure of speech rather that literally the dark side of the moon.

Mr. Heffner: I think that’s probably as good a note as any to end on and it gives us material for the next program. Thank you so much for joining me today in this discussion of your book and. of The Affluent Society Professor Galbraith, Dean Louis Hacker, Mr. Raskin of the New York Times. We’ll be back in two weeks with another subject which, as a matter of fact, is going to be concerned with this ‘dark side of the moon’ and our investment as a nation in research into our own health and our provisions for a good and long life in an “Affluent Society.” See you then.

Announcer: WRCA has just presented the Open Mind. Your host on the Open Mind is Richard. D. Heffner. Mr. Heffner’s guests today were Professor John Kenneth Galbraith, Professor Louis Hacker and Mr. A, H. Raskin.
If you have any comments or questions on today’s program or if you have any suggestions for future programs, please send them to The Open Mind in care or this station.