On "The Affluent Society" by John Kenneth Galbraith ****

I'm glad someone recommended that I read F. C. Hayek's Road to Serfdom, because this book, as it turns out, is in large part a response to that work, as well as an exploration of what one is to do when a society reaches a state where production outstrips the need for people to be constantly producing--that is, where there is a surplus of necessary goods.

Galbraith notes that he has some skepticism about the worship of free market instead of socialism proffered in books like Hayek's. Those truisms, he says, are not a given. Planned economies can do great things too, like launch Sputnik. Furthermore the challenge of modern society is not poverty as was the case throughout human history for most people. Why do some stay poor amid abundance for most in the moder world? How do we resolve? These are the questions Galbraith sets out to explore. It’s not just about the free market—free market simply offer you a difference in terms of who you serve: the blind free market instead of a government bureaucrat.

Conventional wisdom is what most speak; it is based on what we are comfortable with based on experience, but it is not based in current events. Sometimes situations have changed and conventional wisdom is outdated and wrong. Revolutions in thought occur at some point and become new wisdom. Examples: The liberal policies of the American revolution broke the national planning of colonizers. The welfare state broke the free market. Keynesianism broke the balanced budget. Are we on the cusp of another revolution? (Or at least, were we in the 1950s to the 1970s, when Galbraith was writing this?)

A main problem with the free market is a lack of equality; another is the lack of security in the business cycle. The hard working person is just as likely to fail by luck as succeed.

Galbraith then provides a short history of American economic thought, with special emphasis on a non-American with the strongest influence during the gilded age: Herbert Spencer and social Darwinism, out of which our special faith in the free markets perhaps derives and continues. With Spencer, the rich are the fit, the poor are the weak and are slated to drop off. It's no big deal if the weak drop off; in fact, it is poor form to help them because you’re allowing the less fit to survive.

The counter to Spencer is Marx who is just as much a pessimist and optimist but in other ways. Society will always produce too much, which drives down wages of the poor and kills jobs. When produce runs out and the poor go back to work, wages rise, which brings about higher production costs, which kills jobs and thus kills the continued productivity. And so on. The cycle repeats itself, getting worse and worse until revolution results. Even if disagreeing with Marx, he has had a great influence on economic theory.

There are three basic economic problems: productivity, inequality, and insecurity. These were what economists dwelt on till twentieth century and what Galbraith spends the rest of the book analyzing.

Galbraith notes that there’s been a loss of interest in inequality since about 1950. Why is that so, even though it is still exists? Because of increases in productivity. In rich societies, everyone is getting a bigger amount, even if their shares aren’t equal. In poor societies landowners took all the surplus or growth; in addition, in the 1970s showing off wealth became gauche, so rich became less known. (That certainly doesn't seem the case in the 1980s or 2000s, but maybe it was a bit the case in the 1990s.) Likewise the rich are less powerful than they once were, as they are rarely any longer both entrepreneurs and owners (again, this seems less true now in our tech billionaire age); rather, faceless stockholders own the wealth. (Galbraith provides numbers for the share of wealth owned by the few at the time; they are small compared with today, even though they were egregious even then.)

As for security, that has been resolved for commoners by social programs like unemployment and social security. For the rich, corporations have diversified and grown huge such that they can sustain losses in one area to gain in another and are too big to fail. Poor communities have little heavy desire for security, as they are simply struggling to stay alive, but as society grows affluent, the desire for insurance and the like is a result of what might be lost. The idea that security might make us less productive is a false one, as productivity has increased more with unemployment insurance and social security than without. (Galbraith fails to take into account many economies where people are less inclined to work, if they can't find the job they want, when unemployment is generous.)

Productivity is the obsession of the modern economist. Yet we define it narrowly. We take public service as being unproductive while producing private goods is productive. Actually, though, unemployment and government work helps stabilize the economy by providing production in downturns and thus keeping the private sector busier than it would otherwise be.

Satisfaction is never gained by an increase of goods. So there is no end to production. Yet it is rare goods, not easily obtained goods, that people want. This seems contradictory. Simply producing doesn’t mean you’ll sell the product produced. You have to have demand. That demand for product is based on seeing what others have and on advertising. Compare something you truly need versus something wanted. You know when you are hungry without someone telling you. The fact that someone has to inform you of a product through ads or comparison shows you don’t have to have it—it’s not a true need.

Production has become the system through which the economy grows. This came out of the depression when the solution was to get people back to work through producing stuff via government input. But the government never stopped pushing production and so we have way more stuff now than we used to.

Production is not that important really except insofar as it is necessary for security, that is, to keep people employed. Most people would choose to have low productivity and consistent jobs than high productivity and fewer jobs (this is Schumaker's argument too, in Small Is Beautiful). Contributing to this concern is the amount of debt people take on, which outpaces increased wages. It’s trouble waiting to happen.

How do we bring inflation under control to keep prices stable? When we raise prices, inevitably labor prices must rise. That means prices rise. It’s a loop. The key is more production so that prices need not rise to account for higher labor costs.

We attempt to spur or confine production through available cash—that is, by monetary policy or fiscal policy. Neither is fully effective and both affect sectors of society differently. Adjusting interest rates (monetary policy) has little effect except on smaller businesses, which are less able to invest in the future when rates are high. Big businesses have enough market share to inflate prices and consumers will generally just take out longer loans to deal with higher interest. Fiscal policy (adjusting tax rates) tends to interfere with stable employment, which then contradicts the goal of stabilizing prices. It seems there’s little solution. Galbraith seems to argue for price controls to a small degree here, even though he says that we’re historically averse to them. (Price controls lead to shortages, however, so I am not sure they are a real solution.)

Galbraith next turns to what he calls balance—social and investment. Social balance involves the public versus private economy. Our tendency is to see the public economy as a drain on the private, but the two go hand in hand, with the public usually lagging. If the private economy builds more cars, the public economy will require more roads for example or more traffic cops. We should not see the public economy as a drain on productivity; it enables continued productivity. Also of note in this regard is inflation, which Galbraith says eats into public expenditures as taxes do not rise as quickly (this seems a dubious claim to me) and taxes themselves (or rather the manner in which taxes address inequality, as the public sector tends to provide more for the poor but require more of the rich, which the haves do not like).

Investment balance has to do with how society tends to invest most in that which produces most and makes the most, which in turn becomes self fulfilling. A successful industry will develop faster than a more mundane one, leading to an imbalance in sectors. But what Galbraith really focuses on is education. Education enables industries to advance, as modern innovation rarely derives from uneducated people. But education is typically a public expenditure and thus not seen as directly productive. One could put education fully in the private sphere, but that would actually decrease freedom. This is a major point of contention with Hayek’s claim that the private sector ensures freedom rather than the public. If private industry funded all education, then people would have little choice in profession; industry would determine what can be studied and by whom.

This gets us to the crux of Galbraith’s argument, which is that in an affluent society, production should no longer be the main or only goal. After all, much production is unnecessary other than to encourage consumption: without ads few would know they lack a certain leisure good. Do we really want to force people to move or whatever to enable production of things we don’t actually have to have? But how, without such production, are we to have jobs—that is, the means to make money to live off?

The real concern in the economy is not production but employment and the income that comes with it. To break the dependence on production, Galbraith suggests unemployment compensation be closer to real wages. He claims this will lower production but not affect people's willingness to work. (I would suggest, based on European economies and the old communist regimes, that he is wrong. People tend to become pickier about jobs or not work to advance their positions if forced into jobs they dislike.) Or since some cannot work, a minimum living allowance (as some have recently proposed and experimented with), a likely better solution. To control inflation he suggests price and wage controls but only on corporations and unions, which control larger sections of the economy. This seems dubious also but possibly useful, insofar as indeed a large market share of a given thing does give one more ability to set prices and wages compared with a small employer or laborer.

Inadequate social balance between expenditures on private versus public items is best addressed by taxes, says Galbraith, but not those less flexible with inflation like property tax. Rather income tax is preferred, but most of that at this point is taken up by military expenditures. So to compensate we should have more sales tax. The poor are more affected by it; however, if that tax is used primarily for the public and especially the poor then taking away from consumption in the private sector to allow more consumption in public sector makes sense. We could use that tax for schools and the like, eventually leading to greater production anyway. Such taxes are also key to helping address poverty, because there is not more production but instead a better use of resources. (I’m not sure I buy this argument, as consumption taxes tend to be regressive; so one would essentially be taking money from the poor and handing it back to them in the form of government services—in other words, the government thus would be telling the poor how to spend, as it would do the spending for them.)

Galbraith closes with a discussion of how greater productivity has led to fewer hours and more leisure time, but a better way to address better productivity is also to make work more pleasant. As such there’s a new class, not a leisure class, but a new class: a group of workers who labor not primarily for money but for love of the work they do. Education is key to allowing this and should be the goal to bring most people into this class.

In a world where production is ample and there is no need to spend all our days just scrounging to survive, new ways of measuring economic value are needed that don’t simply count what has been produced, ways that actually somehow take into account our humanity. On this basic point, I guess, I would agree with Galbraith, but many of his policy solutions seem dubious. No matter, he offers much to think about in a mostly lucid way.

On “The United States and Britain in Prophecy” by Herbert W. Armstrong ****

I have not read this book since I was a teenager, and I was expecting to be somewhat underwhelmed, as I was with Armstrong's book on the millennium, but this one turned out to have a lot more heft than I anticipated. I remember, at the time I first read it, feeling like the author did an incredible job with the biblical material but that it wasn't too detailed when it came to the historical basis for the theory; that was my impression this time as well. But the book this time left me with a desire to go read up more on the subject historically to see the degree to which the biblical interpretation is accurate—and that's a good thing.

Having grown up being taught the these two countries forge the heart of ancient Israelite migrants, I find that my worldview, even today, to a large degree still falls back on that, even if I've had a few doubts through the years. I would say “it seems to be true,” but it's not a salvation issue. If the understanding is wrong, then in the end, it doesn't take away from the most important truths of scripture. (After all, I've heard other claims, that, for example, Japan is ancient Israel. I haven't looked into such with any seriousness, but I didn't grow up with such a theory either, so it's not where my mind first goes.) Rereading this book, however, made me see, as I noted, that there's a lot more reason to believe such might be the case biblically than perhaps I've recently thought much about.

The issue is, of course, that most modern scholars disagree with the historical thesis and that there are some good reasons for that. The number one reason is that the theory seemed to have found its greatest popularity during the height of British colonialism—that is, it was a way to justify certain racist views. It was, in other words, propaganda for Manifest Destiny and the like. So it is fair to be skeptical. At the same time, it is perhaps unfair to dismiss such ideas out of hand just because of their misuse. What one really has to do is go look at what really happened, insofar as that is possible. Most contemporary scholars are wary to do that in part because of the associated tropes. And so much of the history I've read through the years that ties the lost tribes of Israel to modern nations has been quite sketchy, based on similarities of names and the like—a possible coordinating fact but hardly strong proof around which to base an entire thesis–rather than really tracing the movements of peoples. More reading on the subject would go far in helping me see how such conclusions can be reached. But few serious scholars give the theory much time.

The last chapter of the book, alas, made me uneasy. It's the chapter where the author really lets readers know the troubles that are coming for these nations and pushes readers to join the church the author is associated with in order to escape. I suppose I can't argue with a sincere call to repentance, assuming that's what's going on, and as I see my country literally falling apart now, I can't help but think the author was right in that regard. But the chapter reminded me of many of the nightmares from my childhood, and the appeal to fear and to join one particular group is not something I am completely comfortable with now; it suggests to me these days a kind of insincerity. Repent, yes, but if it's just to save one's own skin and the key is joining one particular organization, something seems a bit off. I don't think a bunch of people just looking to save themselves is what God is after. I'm reminded of what someone said to me shortly after 9/11, namely that they were thinking of returning to church because they were scared of what was going to happen to them. I suppose fear can be a motivating factor for getting one back to doing the right thing, but if that's the whole motive and remains the motive, it's hardly a life of joy and such a choice is not likely to stick. And indeed, that person did not.

On “Theory of the Leisure Class” by Thorstein Veblen ***

I took a step back fifty years or so to add this text to my economics list, given that it shows up on so many lists of classic econ works. Veblen wrote at the height of the Gilded Age—and also at a time when evolutionary theory was making its way into social theory as well. The influence of evolutionary thought is all over this work, and in a way I think it rather harms much of Veblen's theory, which seems very focused on materialism, even though there are aspects of the theory that potentially enlightening.

The gist of the argument is that power and prestige is assigned within communities by the ability one has to live a leisurely life. This leisure is largely shown through one's ability to consume time and money conspicuously—indeed, wastefully. Only the lower classes, the less powerful, have to use their time and money to meet their basic needs. So far so good, but I have difficulty with who Veblen puts into this leisure class category, which is essentially anything having to do with government work or religion. In his view, it seems that unless you're actually making things or growing things, you are conspicuously consuming in terms of the work that you are doing. There is no value to helping to keep society on a moral keel. I guess in Veblen's view, such would take care of itself.

Chapter 1 begins with primitive humanity. Primitive society is more peaceful because people have no time to fight (right here, already, Veblen throws me—people fight over resources all the time; it's not like the poor are immune from such). As one moves toward barbarism, which is a step up from primitive life, one introduces social classes. The higher leisure class is made up of warriors, priests, government, and sport, and it is based around the idea of doing exploits, which give you esteem and power. Intellectual work also places one into this leisure class.

In chapter 2, Veblen notes how the importance of exploits is replaced by an importance in property ownership, as a society advances. Slaves and women are the first property, along with land and eventually goods. The more you own, the more respect you have. Interestingly, Veblen notes, this is why no amount of property is ever enough. I find this latter idea to make some sense. Even contemporary studies show that people tend to be satisfied with less as long as they have more than others around them. Since there is always someone with more somewhere, even the very rich compete to acquire more and stay on top.

The leisure class, that is, the upper class, chiefly engages in nonproductive activity, which can include studies of the occult, dead languages, and grammar, and upholding good manners. As one advances in class, conspicuous consumption is abedded by moving not only one's self into the nonproductivity but also one's spouse and even one's servants (becoming butlers, and so on).

Also as society advances, leisure time is replaced by consumption of goods, especially goods with less use and more expense (think, in modern parlance, brand-name goods). Even lower classes can get in on this action in an attempt to prove a higher status.

In chapter 5, Veblen discusses how hard people will work to remain in a higher class. It is harder, psychologically, to move down classes than up. Because everyone is trying to be like the higher classes, eventually upper-class standards move down into the lower—thus, manners and the like get transferred downward. Veblen especially criticizes scholars, who although usually poor like the lower classes, put on airs to attempt to fit in with the upper class.

Conspicuous consumption goes to the heart of such attempts. One will buy stuff to make one's self seem sophisticated—often stuff that is actually less useful than another option. Thus, handmade stuff is preferred to machine made. We like special editions of books rather than books that are just as good (in terms of info inside and quality of the production) but less expensive.

In chapter 7, Veblen looks at dress in light of this and at the way fashions change just so that we'll seem up to date and sophisticated.

In chapter 8, Veblen returns to evolution, arguing that the leisure class is actually more conservative. Because it does not depend on the society at large, it can be aloof to changes going on and thus doesn't evolve with society. (This seems somewhat counter to the chapters previously, as consumption would suggest actually sticking with trends. I think Veblen is more focused on political and environmental trends here, however. But one has to wonder where the political trends come from? Do they not derive from laborers/producers, who supposedly don't have time to think or to do anything but work?)

This argument sets up chapter 9, where Veblen notes that there are basically two kinds of people: peaceful primitives and barbaric predatory. The leisure class is largely the latter. It is selfish and indvidualistic, while the primitive is community oriented. I'm getting a kind of communist anarchist vibe from this argument, which again I think just misunderstand human nature.

Chapter 10 discusses sports as a leisure activity that shows off exploits while doing nothing of actualy consequence.

Chapter 11 focuses on gambling, which Veblen sees as more conspicuous consumption. The issue I have here, however, is that this is not an activity confined to the upper class. Indeed, the poor often have more reason to gamble, which again goes against his argument. Veblen then notes that those involved in sports and gambling also tend to be more religious, which again I take issue with. He halfway had me through the first seven chapters of the book, but as his argument continues on, the more absurd it seems.

Chapter 12 discusses religion as conspicuous consumption, as it renders no material product. Instead, it uses up resources for valueless items: church buildings, special clothes, and so on. In the mechanical age, the middle classes fall away (especially men), as it is a waste of time. The poor stick to it because they lack resources to change in response to modern circumstances. Meanwhile, the richest take on religion as a means of showing off their wealth—religion becomes bound up in spectacle (as in ancient Rome, I suppose: I sponsor some grand thing and put my name on it). But again, these ideas seem contradictory. If the higher classes are what everyone is aiming for, why would the middle class give up religion while the upper class continues in it? Wouldn't everyone be aspiring to be like the rich, as Veblen earlier argued?

In chapter 13, Veblen discusses the counterforces to the leisure class. As some grow tired of conspicuous consumption, they aim for a more substantive life, one that involves actually producing things. Women especially grow tired of being simply a conduit through which men show off their wealth.

Finally, chapter 14 ends the book with a discussion of how higher education is a form of conspicuous consumption, as it produces nothing but knowledge for knowledge sake. Veblen is especially critical of humanities. Science, based in the practical arts, has invaded this realm, bringing the laborng class into the colleges. Science advances society and moves away from the social order established among the leisure class, while humanities is inherently selfish because it produces nothing of value.

On "Wealth in Ancient Ephesus" by Gary G. Hoag *****

I found this scholarly volume immensely interesting. Hoag does a close reading for select passages from the first letter to Timothy alongside a review of Xenophon of Ephesus's Ephesiaca. By doing so, he provides a new way of interpreting many of the passages in the biblical letter. Some readings seem more convincing than others, but no matter, one comes away feeling as if one knows Timothy much better in its context.

Xenophon's work has historically been placed a century or two after Timothy, but as Hoag notes, more recent scholars now see it as being written at about the same time, which allows for the parallel reading. Hoag examples specifically attitudes toward wealth in Timothy and how those attitudes compare with those of the Ephesians and others who would have read Xenophon's tale.

The tale involves a young couple who meet at a festival for Artemis. Because they don't properly respect the goddess, the goddess banishes them to some hard times before they are allowed to return, more humbly, to Ephesus as the loving couple that they are.

In the most convincing of his arguments, Hoag examines how the work links up ideas about femininity in comparison to what the author of Timothy writes about women. Some odd statements are made in Timothy, but they fit very well when one reads them in light of the mythology surrounding Artemis. There seem to be very good reasons that the author of Timothy discusses childbirth and the creation, beyond just these being biblical stories.

Hoag's arguments regarding false teachers, benefactors, and wealth are a bit less convincing, but they are still intriguing ways to read the letter. I say they're less convincing not because they aren't good arguments but because the standard reading of the letter--that the author is dealing with some kind of proto-gnostic set of teachers--still makes sense. In other words, although Hoag makes a strong case that the enemies of the writer could be wealthy Ephesian worshipers of Artemis, he doesn't quite convince me that the other possibility doesn't make sense. So really, he simply adds to the way that one could read such passages. But this is by no means a bad thing.