John Kenneth Galbraith and the Sin of Affluence

Daily Article by Murray N. Rothbard

[This year marks the 60th anniversary of John Kenneth Galbraith's celebrated book, The Affluent Society, which sparked much public discussion at the time of its publication about disparities between ever-increasing private wealth and what Galbraith claimed was an impoverished public sector lacking in social and physical infrastructure. Murray Rothbard critiques Galbraith's claims in the following article, which is excerpted from his monumental treatise, Man, Economy, & State.]

John Kenneth Galbraith (1908–2006)

In the early part of the 20th century, the main indictment of the capitalist system by its intellectual critics was the alleged pervasiveness of "monopoly." In the 1930s, mass unemployment and poverty ("one third of a nation") came to the fore. At the present time [1962], growing abundance and prosperity have greatly dimmed the poverty and unemployment theme, and the only serious "monopoly" seems to be that of labor unionism.

Let it not be thought, however, that criticism of capitalism has died. Two seemingly contradictory charges are now rife: (a) that capitalism is not "growing" fast enough, and (b) that the trouble with capitalism is that it makes us too "affluent." Excess wealth has suddenly replaced poverty as the tragic flaw of capitalism.[1]

At first sight, these latter charges appear contradictory, for capitalism is at one and the same time accused of producing too many goods, and yet of not increasing its production of goods fast enough. The contradiction seems especially glaring when the same critic presses both lines of attack, as is true of the leading critic of the sin of affluence, Professor Galbraith.[2]