Galbraith and the Theory of Social Balance (Sackrey, ch. 7)

 

Ø     An economic gadfly who argues for 1) the “countervailing power” of government (previously he believed big business could do this among themselves, e.g., one oligopolist checks the power of another oligopolist) against corporate abuse and against 2) consumerism and the credo that M.I.B.

 

 “…an unregulated capitalist economy is chaos in the making.” (133)

 

Ø     Argues for a “social balance” – (read quote on p. 134) between the public sector and the private market sphere. Concerned for example that the more Americans became chained to a consumerist lifestyle the more they worked and the more childcare was farmed out (135).

 

Ø     The “Dependence Effect” (similar to Veblen’s pecuniary emulation) is reflected in this set of causal links:

 

Higher level of production àHigher level of want creationàHigher level of want satisfaction (136)

 

Ø     Ergo, advertising dominates our daily life: a. ads everywhere (even considered placing sticker ads for bras on melons and ads for condoms on bananas – too tasteless?) b. ads aimed at children to increase “pester power” (137)

 

Ø     Sackrey argues that a “growth lobby” (Galbraith’s term) has support in mainstream economics in the assumption of M.I.B. which in turn supports political bias towards constant increases in GDP per capita. (138)

 

Ø     The Affluent Society(A.S.) ~ “How much extra welfare do we get from an additional 1% of GDP if it represents goods we did not know about last year (or last week) [and] if their production and consumption spoil the environment…” (138)  

 

Ø     The New Industrial State ~ Large oligopolies emphasize “product differentiation” (Coke vs. Pepsi) and employ a cadre of technocrats to influence government and advertisers and designers to influence us. (Proctor and Gamble and G.M. spent $2.5 billion in ads in year 2000 alone). (139)

 

Ø     The Anatomy of Power ~ corporations use “compensatory power” (buying labor, materials) and “conditioned power” (power of persuasion) and “power of the sack” to have us buy into notion of G.M. CEO C. Wilson that “What’s good for G.M. is good for America” and “develop a [product dependence] bordering on addiction.” (140)

 

Ø     In A.S. he contended that the “engines of mass communication” push for “more beer but not…more schools” making a politician calling for “a new public service…a wastrel.” (141) i.e., the public sector is inferior.

 

Ø     We actually begin to equate freedom with the right to buy a t.v. and communism with a coerced demand for schools. (e.g., John Irving’s crusade against “trailer park envy.”

 

“All private wants, where the individual can choose, are inherently superior to all public desires…(for schools, clean air etc.) (142)

 

Ø     And as a consequence we have private opulence and public squalor.

 

Ø     Galbraith’s belief in a “new class” of the educated who would fight for improved public services proved false by the anti-government consensus beginning with the Reagan years.

 

Ø     Even so, the size of government has expanded since Reagan took office, but its role has changed to increasing corporate subsidies, defense and national security while reducing regulatory burden on business, dismantling the welfare state and reducing spending on education, infrastructure etc.

             “…federal investments in education, infrastructure, and research as shares of GDP have continued to fall through the last three administrations.” (as quoted in Reich 145)

Ø     The Environment:

·        Should we privatize natural habitats?

·        Can population and living habits of humans continue as at present?

·        “Of all human food, breast milk is not the most contaminated.” (Rachel’s Env. And Hlth Wkly #699)

·        We allow “3,000 …industrial chemicals [to be distributed] without their having …been subjected to analysis by the EPA…” (149)

·        Almost all food samples tested by USDA from 1994 – 1997 were above safe levels for children. (149-150)

·        Childhood asthma epidemic attributable to higher ozone levels (150-151).

·        Fish finding technology have “made it possible to sweep the oceans like a vacuum cleaner.” As a result of this excessive harvesting, “4 billion pounds of fish ‘bycatch’ ground up and dumped in ocean. (151)

·        Global warming ~ “Eleven of the past 16 years have been the hottest of the century.”