Galbraith, the Materialistic State, and Advertising in Schools

Galbraith's discussion of consumer want dependency proved very shrewd and relevant. While capitalism might not necessitate materialism, the existence of both in the United States is undeniable.

Yet Galbraith does not automatically reject a materialistic state. He notes "consumer wants can have bizarre, frivolous, or even immoral orgins, and an admirable case can still be made for a society that seeks to satisfy them" (125).

Galbraith's issue arises with our system of want generation, or how modern materialism has developed. He argues that a society cannot cite the importance of production as the satisfaction of wants when production itself is creating the wants. To defend production on such grounds is to rely on circular logic. Galbraith illustrates this point with the image of "a humanitarian who was long ago persuaded of the grievous shortage of hospital facilities in the town...who continues to importune the passersby for money for more beds and refuses to notice that the town doctor is deftly knocking over pedestrians with his car to keep up the occupancy" (129).

As Melissa pointed out in her blog post, Galbraith distinguishes between physical and psychological wants. Physical wants are original with man himself, such as the want of food. Psychological wants, on the other hand, are contrived. Galbraith does not doubt the power of psychological wants, but their essentiality. If man fought "demons which instilled in him a passion sometimes for silk shirts...and sometimes for orange squash, there would be every reason to applaud the effort to find the goods, however odd, that quenched this flame. But should it be that his passion was the result of his first having cultivated the demons...he might wonder if the solution lay with more goods or fewer demons" (125). To Galbraith, physical-want demons are innate and indomitable, but psychological want-demons can be both repressed and possibly eliminated.

Recognizing the mortality of psychological wants, Galbraith investigates their lifeblood: advertising. "The even more direct link between production and wants," Galbraith says, "is provided by the institutions of modern advertising and salesmanship. These cannot be reconciled with the notion of independently determined desires, for their central function is to create desires" (127).

I tracked down data on the growth in advertising expenditures and compared these figures to consumption growth. Also, I looked at the number of patent grants per capita as a proxy for annual new product creation. I wanted to see if advertising clearly drove consumption growth, and if growth in product variety coincided with the growth in consumption.

Data Sources: Crain Communications, BEA, US Patent and Trademark Office, Census, Kantar Media

The number of new patent grants - and thus likely the number of new products too - has clearly grown over time. This would not surprise Galbraith, who claimed that "if production is to increase, the wants must be effectively contrived" (130).

The relationship between advertising, GDP, and consumption is less clear. Galbraith probably would expect advertising to be a leading indicator of consumption; after firms spend to promote new wants, consumers satisfy those wants in the next period. The quarterly data suggests that advertising expenditure does not substantially impact consumption. Since the first quarter of 2011, consumption growth has outpaced advertising expenditure growth. This could mean that 2010 advertising increases were a leading indicator of the subsequent consumption growth, but that is an unlikely story considering consumption growth hovered at around 4% between 2005 and 2007 after a sustained period of rapid advertising expenditure growth.

On a final note, I wanted to consider Galbraith's Theory of Social Balance. Specifically, I was interested in how Galbraith would react to private investment in public schools. He calls for more public sector spending and highlights the disparity between the flow of private and public goods and services. Specifically, Galbraith observes "the schools are old and overcrowded...and often severely underprovided" (187). Today, such a problem has been exacerbated by vanishing state budgets in the wake of the Great Recession and in response, many school districts have utilized private advertising to save their schools. In Northern Texas, schools are opening buses and buildings to advertisements; Colorado schools are even allowing ads on report cards.

Galbraith might laud the additional funding for public programs, but at the same time he would caution that the cure might be worse than the disease. He argues how in an imbalanced society, "schools do not compete with television and the movies. The dubious heroes of the latter, not Ms. Jones, become the idols of the young....An austere community is free from temptation...not so a rich one" (191). Propping up schools by intensifying the students' exposure to private interests only scales the problem - it does not solve what Galbraith considers to be the fundamental issue of the ratio of private and public expenditure. As he mentions, "the cause of the crisis in the supply of public services...[is] we have failed to see the importance, indeed the urgent need, of maintaining a balance between the two" (186). Schools affording schoolbooks means nothing to Galbraith if the students remain too distracted to read them.