How to Restore Poverty

November 7, 1960

Senator Kennedy’s choice of John Kenneth Galbraith as his chief economic adviser provides a clear warning of what Kennedy’s economic policies, if he became President, would be like.

The professor once exercised power. He was deputy price administrator in the OPA under Roosevelt in 1942 and 1943. Leading members of the food industry protested that he was primarily responsible for pricing regulations that had “strangled” their operations and produced “utter confusion and chaos in the production and distribution of the nation’s food supplies.” Leading members of Congress joined in demanding his resignation, which they finally forced in May of 1943. The professor still believes in price controls. He still believes he knows better than the free market just what prices ought to be.

The flavor of Galbraith is best conveyed in an often- quoted paragraph from his book The Affluent Society:

“The family which takes its mauve and cerise, air- conditioned, power-steered, and power-braked automobile out for a tour passes through cities that are badly paved, made hideous by litter, blighted buildings, billboards, and posts for wires that should long since have been put underground. . . . They picnic on exquisitely packaged food from a portable icebox by a polluted stream and go to spend the night at a park which is a menace to public health and morals.”

ARE WE TOO RICH?

If we accepted this extravagant caricature as accurate, what would it prove? According to Galbraith it proves that the problem of production is not only solved but oversolved. Capitalism is so productive that production is running wild. The American people have become too rich and affluent for their own good. The people who earn the money spend too much of it on themselves (the “private sector”), whereas it should be seized from them in taxes and spent by the politicians and bureaucrats (the “public sector”).

Actually the picture that Galbraith paints of American life seems a damning indictment of his own proposals. It would mean that for the money they spend on the private sector the American consumers get marvelous products and amenities never dreamed of before in human history. But though they are forced to spend more both absolutely and proportionately on the “public sector” than ever before in history, they are wretchedly served, because political spending is inherently improvident, inefficient, and wasteful. Yet Galbraith, in the face of the statistics, blandly blames it all on insufficient funds.

CONSUMERS AS DUPES

His whole program rests on an inner contradiction. It assumes that people are individually unfit to spend the money they themselves have earned, but somehow collectively competent to choose wisely the officeholders who will seize their money in still more onerous taxes and spend it for them. People as voters are supposed to have sense and wisdom; the same people, as consumers, are boobs, gulls, suckers who can be pushed into buying whatever Madison Avenue wants them to buy. Galbraith laughs at the idea of thinking such people worthy to retain the liberty to spend their earnings as they see fit. His conclusions remind me of de Tocqueville’s remark that “the taste a man shows for absolute government bears an exact ratio to the contempt he professes for his countrymen.”

I have discussed only Galbraith’s central contradiction. There is no room to discuss his lack of originality. Or his completely inverted ideas on inflation. Or his strange assumption that “goods” and “income” are two entirely separate things instead of two names for the same thing. Or his scheme for making unemployment perpetual and universal by paying everybody seven-eighths as much for not working as for working.

One thing, however, must be conceded. According to Galbraith, the great evil today is too much unneeded production. His schemes are certainly calculated to cure this. He would reduce or destroy every incentive to production and pay extravagant bonuses for malingering and idleness. His program would halt this demoralizing affluence and restore a noble and uncorrupted poverty.