Tuesday, October 2, 2012

The Original Affluent Society


American consumerism was a constant underlying theme in The Affluent Society.  Because of the steady increase in wages in the United States, Galbraith argues that luxury items have become the ‘new standard’, replacing the most basically demanded goods of food and shelter. He contends that mass marketing and targeted advertising have been responsible for creating both the increase in consumption and the purchase of more luxury goods. Galbraith asserts that, in this “affluent society”, contemporary economic theory does not take into account certain human desires that have created a ‘‘dependence effect” in modern consumer America. This “dependence effect” is the increasing desire for additional consumption, “manufactured” by advertising.  Gailbraith believes that the massive growth in consumption after World War II has resulted in the steady increase of consumer debt.

“American demand for goods and services is not organic. That is, the demands are not internally created by a consumer. These demands - food, clothes, and shelter - have been met for the vast majority of Americans. The new demands are created by advertisers and the "machinery for consumer-demand creation" that benefit from increased consumer spending. This exuberance in private production and consumption pushes out public spending and investment. He called this the dependence effect, a process by which "wants are increasingly created by the process by which they are satisfied."

John Kenneth Galbraith, The Affluent Society, 4th ed. (Boston: Houghton Mifflin, 1984), 254
Which society would you call the “original affluent society”? While Galbraith talks largely about modern culture and invention, I believe that the original affluent society may have originated far before many people realize. I believe that the original affluent society occurred at point Hf on the graph below. At this point, the amount of labor hours worked is maximized in the society. At this point, a worker will not sacrifice another hour worked for another hour of leisure and vice versa (for a given wage). But in a hunter-gatherer society, because everything  they had was perishable including their homes, the wage rate represented the amount that the society could consume. This society would work exactly as much as they could to provide a comfortable life for themselves, and no more to prevent surplus and waste.
 
At the most basic level, Hf represents the time where a human can provide food, water and shelter for themselves. During hunter-gatherer times, humans would not work longer than necessary to gain surplus resources because they could go bad quickly. Instead, they devoted time to leisure. Because their economies were small and undeveloped they could not buy modern consumer goods or durable goods. Mirroring this theme, Galbraith talks about many of the goods that we consider needed, in modern America, to be merely wanted. Perhaps we do not need planes, trains and automobiles to be an affluent society. If a society is self-sufficient, and food nor water nor shelter is a want, then could they be considered an affluent society?

The "original affluent society" is an expansion of Galbraith’s arguments, first argued by Marshall Sahlins at a lecture series called "Man the Hunter" that was held in Chicago in 1966. This theory postulated that hunter-gatherers were the original affluent society. At the time of the symposium new research by anthropologists, including Richard B. Lee’s work on the !Kung society in southern Africa, was challenging conventional wisdom that hunter-gatherer societies were always near the brink of starvation and continuously engaged in a struggle against nature for survival. Sahlins gathered the data from these studies and used it to support his argument that hunter-gatherers did not suffer from deprivation, but instead lived in a society in which "all the people’s wants are easily satisfied"(Sahlins, Original).

Hunter-gatherer societies were able to achieve affluence by desiring little and meeting those desires with what was available to them. Sahlins calls this "Zen road to affluence" (Sahlins, Original). He argues that hunter-gatherer and western societies have taken separate roads to affluence: hunter-gatherer societies have achieved affluence by desiring little, and modern western societies have achieved affluence by producing much. Perhaps just as Galbraith argues that the general principles of economics, written by Adam Smith and the like, do not apply to modern times of excess, the same principles of economics do not apply to hunter-gatherers.

Sahlins' argument partly relies on studies undertaken by McCarthy and McArthur in Arnhem Land, and by Richard Lee among the !Kung. Fifteen to twenty hours a week of work were required for hunter-gatherers to survive, according to these studies. When this time is adjusted to include the time spent cleaning, processing, and cooking food and water the studies estimated 44.5 hours of work per week for men and 40.1 hours of work per week hours for women. This being said, I don’t believe that America is currently at position Hf: wages continue to rise and people continue to work fewer hours. Currently the average working week in the United States is about 33 hours, whereas it once was over 60 hours around the late 19th century. ("Hours of Work in U.S. History". Economic History Association. 2010-02-01.) Regardless of where we are on the curve currently, I thought it was interesting to note what the original affluent society may have been and how their labor supply curve may have looked.

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