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One of the towering figures (literally too!) of 20th century public intellectuals was John Kenneth Galbraith. In 1958 he made a huge splash with his book The Affluent Society which was a criticism of resource depletion, inequality and consumerism, among other ideas. It is actually quite an enjoyable read, I do recommend it.

One of the major themes in the book is the now famous idea that there really is no such thing as autonomous subjective value in consumers. He offered the idea that much of what we as consumers end up purchasing is determined and shaped by the desires and whims of the producers in the market. This is quite the opposite of Say’s Law. He said that advertisers were, “the machinery for consumer-demand creation.”  In a few pages that portend the work of Robert Frank (my old Cornell economics professor) he laments this not only for materialistic reasons but also because such focus and promotion of private consumption must therefore crowd out public spending and investment, and will ultimately lead to societal decay.

I will not here analyse that particular thesis, it has been the topic of this site for years. However I wanted to lay this theory side by side with another pet idea of the modern day intellectual heirs of Galbraith. I have listened on several occasions to people who think that enlightened businessmen ought to run their companies for the social good. If these businesses do not do it, then politicians should make them do it. For example, consumers of American housing services tend to under-purchase energy efficient appliances (or so it seems) and therefore the CEO of Kenmore ought to simply start making more Energy-Efficient appliances and then use his power to shape the preferences of consumers so that they buy these sorts of products.

Let’s remain agnostic about whether that’s a good idea or not – but can you really hold both of those positions? On the one hand capitalism is awful because it brainwashes consumers into purchasing the things that people only think they want but do not really want. On the other hand, we think it is perfectly legitimate for companies to brainwash customers to purchase ethically appropriate products? That seems an awkward pairing, no? And if Mr. Galbraith’s thesis was so right, why haven’t a massively large number of ethical production companies arisen to shape the demands of people? Is it really the case that business only has an interest in shaping the demands of consumers to purchase ethically inappropriate things? They only like to make money on ugly, socially destructive stuff? What model of the world could possibly derive such an observation?

2 Responses to “The Affluent Society Meets the Paternalist”

  1. Speedmaster says:

    I remember reading The Affluent Society and I think The New Industrial State in college.

  2. Trapper_John says:

    This logic is rampant in pillorying fast food places. People only eat that crap because they are brainwashed into eating it. But if it has that much power, why doesn’t McDonald’s push broccoli and soy burgers? In addition to being healthy, those items are likely cheaper to produce/higher profit margin than beef/chicken/etc.

    It all stems from the “we know better than you do” aspect of progressivism. Raving at a cocktail party about some new froo-froo restaurant (which likely serves food worse for you than McDonald’s, if you consider fat content of something like foie gras) is perfectly acceptable, but putting a toy in a happy meal is evil predation.

    The not-so-subtle double standard revolves around who they see as fit to make choices for themselves. The cocktail party guests are deemed smart enough, but fast food customers are, ipso facto, not. After all, if McDonald’s customers were smart, they would attend my cocktail parties and dine at Che Angioplasty instead. Hearing the facts and having different preferences than mine is impossible!

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