CONSUMER POWER Galbraith on consumption

Our affluent society
The more we have, the more we seem to need. It’s a treadmill of consumption
that leaves us exhausted but never sated. Dexter Tiranti talks to Professor J.K.
Galbraith about what prompts us to worship in the high temple of consumption
and why this curious religion is so necessary for the economy.

It was the 26th of December. The preChristmas buying spree had punched up record sums on cash registers everywhere. Now the sales had started. I watched a TV news-clip of an interview with a passer-by clutching new purchases. Question: ’Why have you turned out to go shopping again?’ Answer: ‘Well there’s not much else to do really; apart from staying at home, eating and watching the telly.’

It was an honest and revealing answer.

But it needed a meeting with Professor J.K.Galbraith to put this consumption fetish in its context. The reception foyer of Dublin’s Belvedere Court Hotel was lush and large - a contrast to the down-at-heel streets outside. Prosperous businessmen were evacuating the hotel’s bars and restaurant, hurrying to make the kickoff of the rugby international down the road. And it was with old-fashioned courtesy that Professor Galbraith shook my hand and escorted me upstairs.

Detergent whitewash
His is a deep, studied voice. It has the ring of a Boston Brahmin although he is Canadian by birth. As we walked the corridors to his rooms, he asked about the New Internationalist. I described something of this particular issue of the magazine, concentrating on consumer power - or the lack of it - in the marketplace. Our readers, I said, would need some convincing that a ‘need-creating machinery’ (Galbraith’s term) was operating on their actions and behaviour. They can see through the banality of the detergent that washes whitest on television commercials. They can ignore billboards promoting a lager which reaches the parts... They can dismiss ‘O’Donaghue’s for second hand cars’ the radio had recommended over breakfast that morning. Could anyone be persuaded by such rubbish?

The individual serves the economic system by consuming its products, Galbraith had written. ‘On no other matter, religious, political or moral, is he so elaborately and skilfully and expensively instructed.’ The advertising industry provides unremitting arguments for the advantages of consumption. A family’s standard of living becomes an index of their achievement, the consumption of goods the prime measure of social accomplishment. But does that apply to New Internationalist readers?

His reply came in considered well-formed sentences; ‘I have long been concerned to persuade my fellow economists that wants do not necessarily origin ate with the consumer; that they can also originate with the producer and emerge deeply from within the culture. This is a phenomenon which occurs with relatively high affluence. You cannot persuade the hungry to forgo food and buy clothing. And you cannot persuade someone who is cold to forgo shelter and buy cosmetics. In the poor society "wants" have a strong physical base. But as we become more affluent, our needs are more psychologically based. Then we are more open to persuasion. Yet this is a thought which is strongly resisted. For many, nothing is more important than the notion of consumer sovereignty; and that welfare increases progressively with the output of goods.’

Erotic clothes
Such artificial consumer demand is something to which Galbraith returns again and again. He argues that, logically, demand should become less the more our basic needs are satisfied. In turn production and productivity should become more and more meaningless as the prosperity of society grows. But this just doesn’t happen. Such illogicality is called ‘the giant cover-up’ in The Affluent Society. Somehow we are persuaded to believe that video recorders, erotic clothes or eccentric loafers are just as important as food which feeds the hungry. A case cannot be made, Galbraith wrote, for a society which seeks to satisfy wants, when it whips up artificial desires to mop up its continually increasing production. It’s as pointless as the efforts of the mouse in its rotating wheel. The solution lies not in more goods but fewer demons which goad us to want more.

Does the reasoning hinge on advertising as the pivot for increased production and desires? ‘Absolutely.’ Galbraith had folded his 6’8" frame onto the settee and deliberately placed his hands onto the blue tweed of his trouser knees. ‘I don’t spend my time worrying about it. It’s an amiable form of fraud, something to be regarded with tolerant amusement I would suppose that people not guided by advertising would be subject to some equally dubious form of guidance. But there can be no doubt that it has a deeply organic role in the economy and in the creation and shaping of wants.’ A surprisingly mild answer, I thought.

Elsewhere he had written, more caustically: that modern promotion and marketing exists to create desires.

‘They are effective only with those who are so far removed from physical want that they do not already know what they want.’

I mentally flicked through my own wants and purchases over the last few months.

What had prompted me to produce my credit card? Wasn’t it less advertising than - that terrible phrase - peer group pressure? Wasn’t I gently conforming to the lifestyle and acquisitive patterns of friends, relatives and colleagues? I floated this to the dignified economist. He responded obliquely. ‘You can sell everything from cars to hair shampoo by going on TV and saying they are used by some particularly prestigious or hygienic peer group.

So the consumer is not king, or queen for that matter, but manipulated and managed. Yet many of our consumer organisations appear to be founded on the assumption of consumer sovereignty. Perhaps their efforts simply strengthened the myth of the free marketplace which Galbraith had so effectively dismissed. Wasn’t the painstaking comparative testing of various expensive consumer durables simply bolstering the ‘want-creating machinery’ - this time with the impartial air of a ‘best buy’ slapped on the product?

Galbraith took a more detached view, in his usual languid manner:’ Such preoccupation with best buys gives a seriousness to the consumer society to’ which I do not especially add my voice. I don’t object to it. In the US I read Consumer Reports with interest and amusement. I don’t consider this one of the great motivating concerns of modern man. Indeed I am not deeply concerned as to the relative merits of one automobile or another. In fact I would go so far as to say that any person who can afford to worry about the difference between a Buick and an Oldsmobile can afford to be a little cheated by both.’ And consumer movements in the poor world? ‘I take them very seriously

Obviously the cost of food and shelter, medical care and clothing becomes increasingly important as you move down the income scale. The very reason why informed consumption is less important in the upper income brackets of rich countries is why it is so desperately important among the poor of Africa and Asia. I would like to see more of the consumer movement’s energies going to support the sensible long-term development of the new countries.

The thesis of Galbraith - that consumer demand is geared to ever-expanding industrial production - is part of a wider critique of growth for growth’s sake. There are good reasons why politicians are happy to accept the growth criteria as a measurement of national success. Increasing national income means avoiding unpopular decisions over higher taxation on wealth and redistribution of income.

When Galbraith was writing his major works on consumption - The Affluent Society and New Industrial State - in the 1950s and 1960s, more production meant more factories, more factories meant more work. Governments were agreed this was the way to win elections. The door was firmly shut on the spectre of another Great Depression. Unemployment had to be contained and growth was the answer.

Though it’s not really cricket to bowl at this thesis of growth and jobs with 25 years’ worth of hindsight. I couldn’t resist the temptation. Because today there appears to be a qualitative change in government outlook. Spearheaded by Mrs Thatcher, European adminstrations with Canada following suit, appear quite prepared to risk unpopularity from unprecedented dole lines. Inflation must be hammered by monetarism and to hell with growth and the jobless.

But Galbraith in the Belvedere Court that afternoon insisted that unemployment was still perceived as the greatest problem of modern economies. ‘In 1981 and 1982 we saw the worst recession in the US since 1929 and the Depression. There was a severe slump in output. But nobody mentioned the goods we were missing. No-one worried about an inadequate supply of automobiles, infra-red grills or electric toothbrushes. Public concern was with unemployment and people’s loss of income. So one couldn’t have a better illustration of the overwhelming concern in the modern economy not to produce goods, but to produce income and jobs.’

Scars of the New Right
Hmmm. The scars of the New Right were running too deep for me to be fully persuaded. I put it to the Professor that, while Britain had a stagnant growth rate, no-one was too distressed. When the rhetoric was set aside, Mrs Thatcher’s administration was willing to pay over three billion pounds sterling ($3,500 million) and accept a reduction in the country’s growth rate from 2.9 per cent to 1.9 per cent this last year to break the miners’ strike. For behind breaking the strike was the determination to break any further resistance to redundancies and unemployment.

‘That’s true,’ came the reply, ’Ronald Reagan’s strongest step on coming to the presidency was to crush the air-traffic controllers’ strike. We have learnt that indirectly the effect of monetarism is to break trade unions. Monetary policy creates enough unemployment and enough pressure on employing corporations for them to tough it out and demand wage givebacks rather than concede increases.’ ‘Givebacks?’ I queried. ‘Wage reductions. They were general in the auto, steel, chemical and aviation industries. All the unions were forced to surrender some part of their recent wage gains. Mrs Thatcher has accomplished much the same. There is a certain logic. Both administrations believe in reducing trades union power. What isn’t so clearly understood is how breaking strikes serves the national economy as a whole.’

By this time the roars of the rugby crowd were drifting through the window from Dublin’s Lansdowne Road ground. A discreet knock at the door and the next interviewer appeared. He was directed to a seat and quietly shuffled his papers. A conclusion was called for. How about something personal? Once Galbraith had talked of his soul as a shallow, pallid thing - rather like a used tissue. But his work had shown a consistent concern for the underprivileged and exploited. Did he have a spiritual motivation?

‘I was always taught to have a certain compassion for others.’ Silence. A long one. Could I tempt him to say more.

‘No. That’s enough. Print it.’